It’s not about cap and trade. A non-partisan report says California’s renewable energy mandate is the star of the state’s greenhouse gas goals, just as some propose to stop it.
California’s ambitious renewable energy targets helped drive a substantial drop in greenhouse gas pollution that propelled the state past its 2020 climate change goals early, according to a non-partisan analysis released this week. Yet one California lawmaker confirmed Tuesday he wants to put a stop to the mandate, for now.
Most of the carbon pollution that California scrubbed from its economy over the past ten years disappeared from the state’s electricity sector. That’s largely because of a shift toward renewable electricity sources like wind and solar and a departure from coal. The question is to what extent the state’s climate efforts are driving that shift.
The report, published this week, comes from the Legislative Analyst’s Office, which assesses state policy and advises California’s Legislature. Ross Brown, primary analyst on the report, dug through academic studies and government data to lead an investigation into just how effective state policies are at greening the grid.
It’s important to find out: California cut greenhouse gases to 1990 levels four years ahead of its 2020 goal. But the state has to dramatically pick up the pace to cut emissions another 40 percent by a fast-approaching deadline in 2030. Knowing what’s working, and how well, will be key — particularly as California continues to position itself as a climate leader for the rest of the world.
“Understanding why emissions fell — as well as what we don’t know — is critically important to the task of informing California’s pursuit of future climate targets,” Danny Cullenward, policy director at the climate change think-tank Near Zero, said in an email to CalMatters. He called this week’s report “the gold standard.”
Chief among the report’s conclusions is this: California’s requirement that a large portion of the state’s electricity must come from renewable sources likely played a substantial role in cutting emissions from the electricity sector. Rooftop solar incentives probably cut greenhouse gas emissions to a lesser extent, and are pricier. Importantly, the researchers reported major gaps in what we know about the effectiveness of the state’s climate efforts.
The gaps include emissions reductions from a 2006 law that barred electricity providers from signing new long-term contracts with coal plants; while coal power now makes up about three percent of California’s electricity supply — a 60 percent drop since 2009 — no long-term studies have sussed out how much of that is because of California’s law.
Also mysterious are the greenhouse gas cuts from cap and trade, California’s cornerstone climate policy that requires the state’s major greenhouse gas polluters to cut their emissions or acquire permits to continue polluting.
While the costs of cap and trade — about $17 per permit — are clear, it is “more difficult to estimate” how much electricity emissions have been cut, the report said. For now, according to the report, cap-and-trade’s effects are “thought to have been relatively modest compared to other policies.”
The report leaves Assemblymember Cristina Garcia, a Democrat from Bell Gardens and chair of the Joint Legislative Committee on Climate Change Policies, questioning the policy’s goals. “Is the goal of cap and trade to reduce the cost, or is the goal of cap and trade to reduce emissions, or is the goal to do both?” Garcia said.
Garcia noted a consumer cost benefit of cap and trade that was highlighted in the report: the state gives utilities some permits to pollute for free, which the utilities must use to benefit their ratepayers — often in the form of a bill rebate. But, she added, it’s important to look at costs beyond electricity bills, such as the health costs of failing to curb pollution.
The impact of California’s solar incentives was clearer. Overall, installing rooftop solar panels helped cut annual greenhouse gas pollution by about 6 million metric tons of carbon dioxide in 2018 from 2009 levels — equivalent to taking about 1.3 million cars off the road.
The legislative analyst’s report credits, in part, a state program that provided billions of dollars in incentives to install rooftop solar for the drop in greenhouse gases, even as it concedes some rebates went to Californians who would have installed solar anyway.
The report’s winner, however, was California’s Renewables Portfolio Standard. The Legislature made the mandate tougher over time — setting a statewide renewable electricity target that’s increased from 20 percent by 2010 to 60 percent by 2030. After that, other carbon-free electricity sources including existing large-scale hydropower can count toward an even more ambitious goal of 100 percent carbon-free electricity by 2045.
In general, electricity providers already are meeting the 2020 goal, the report said. And the standard is working to slash climate-warming pollution, too. The analyst’s office estimates the shift toward large-scale renewable electricity sources slashed annual greenhouse gas emissions in 2018 by 24 million metric tons compared to 2009. That’s roughly equivalent to taking 5.2 million cars off the road.
The report suggests California cannot take all the credit for improving emissions. The boom of renewable electricity generation outside California suggests federal tax credits and drops in the cost of renewables like wind power likely contributed. Drops in natural gas prices also likely drove a shift away from coal.
“It’s clear that the policies in the power sector are working,” said Michael Wara, director of the Climate and Energy Policy Program at Stanford University. Still, while emissions from electricity have dropped, emissions are ticking up in other parts of the economy — like transportation. “It’s also clear that we can’t achieve our overall climate goals just by doing more of the same in the power sector,” he said. “And so that’s a big warning sign for policy-makers over the next decade.”
Rather than expanding the electricity sector’s emissions cuts, Republican lawmakers — Assemblymember James Gallagher from Yuba City and Senator Jim Nielsen from Tehama — want to instead pause California’s renewable energy mandate for an as-yet unspecified time. The deadly 2018 Camp Fire burned through the districts of both legislators, and they say California needs to free up utility funds to harden the electrical infrastructure that sparked the blaze.
Gallagher points out that greenhouse gas emissions from wildfires have outstripped the state’s carbon dioxide cuts across the economy. The California Air Resources Board has contended, however, that it’s a mistake to compare the two sources: wildfire emissions are part of the natural carbon cycle — whereas without humans, fossil fuels would otherwise stay in the ground.
Gallagher sees the Renewables Portfolio Standard’s success as a sign that it’s time to scale back. “I agree we need to reduce greenhouse emissions,” Gallagher said. “But let’s do it in a smart way, and let’s not do it where we’re blowing smoke out the back end.”
The lawmakers announced their proposal in October — citing a California Public Utilities Commission Report that calculated $2.4 billion in PG&E expenditures for renewable power in 2018. That number, however, is misleading. It represents PG&E’s total expenses for renewable power, not how much more it paid for renewables mandated by the Standard.
That number is much smaller, according to what the analyst’s office calls an “imperfect” estimate based on data from the California Public Utilities Commission. Complying with the Renewables Portfolio Standard costs the three major investor-owned utilities — PG&E, Southern California Edison, and San Diego Gas & Electric — an extra $1.1 billion per year, total, compared to buying natural gas, the report said. That’s roughly 5 percent of total costs.
Costs could drop in the future, as well; today’s prices include contracts signed when renewables were more expensive than they are now. That means providing electricity from renewable sources is likely to get cheaper for utilities.
Ethan Elkind, director of the climate program at UC Berkeley’s Center for Law, Energy, and the Environment, thinks stopping the renewable energy mandate conflates two unrelated issues: how PG&E has decided to spend its money, with the cost of complying with California’s renewable energy mandate. “It’s this false choice,” said Elkind, who called Gallagher and Nielsen’s proposal “a really bad idea.”
Plus, the proposal to pause the renewable energy mandate for an unspecified period of time doesn’t take into account the pollution benefits of phasing out fossil fuels, Elkind said. “Nobody wants to live next to a natural gas power plant.”
Assemblywoman Garcia agreed — arguing against sacrificing a policy that’s working. “I think both issues need to be addressed,” she said. “We need to have that discussion about hardening the grid, but finding other ways to do it.”