NewEnergyNews: TODAY’S STUDY: The Real Numbers On California’s Emissions Cutting Success


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    Tuesday, September 11, 2018

    TODAY’S STUDY: The Real Numbers On California’s Emissions Cutting Success

    2018 California Green Innovation Index 10th Edition

    August 2018 (Next 10)

    A Decade Of Data

    When California passed AB 32 in 2006, many were skeptical that the state could reach its ambitious climate goals without sacrificing economic growth. Next 10 launched the California Green Innovation Index to track the economic and environmental impact of this and subsequent policies aimed at accelerating the state’s transition to a clean energy economy.

    Ten years later not only did California reach its goal of reducing emissions to 1990 levels by 2020 four years early, but did so while achieving one of the largest economic expansions in state history.2 Total emissions fell even as population in the state grew by 8.5 percent. In May 2018, just a few months before the California Air Resources Board announced California had beaten its own deadline for emissions reduction, the state surpassed the United Kingdom and became the world’s fifth-largest economy.3

    As Governor Jerry Brown convenes national and subnational leaders from across the world at the Global Climate Action Summit this September, the tenth edition of the Index provides important food for thought around global action. The data reveal a virtuous cycle of policy, investment, technology innovation, emissions reduction and economic growth. But while California is a world leader when it comes to emissions reductions and economic growth, the state represents a fraction of the world’s total emissions and population. Global collaboration is critical to continued progress worldwide, and California has much to be leveraged by other governments.

    California has much to learn, too, from other states and nations. Looking to the next ten years, the state must make progress decarbonizing transportation the same way it has the energy sector in the face of critical challenges. Population continues to increase while housing supply has not kept pace with demand, and Californians are traveling longer distances between home and work. At the same time, the federal government has announced its intention to rollback California’s vehicle emissions standards. Partners – at home and abroad – are more critical than ever to California, and the world’s, success.


    Well before the passage of AB 32, California was at the forefront of innovative policy to address serious environmental issues. Smog was defined in and by Los Angeles’ severe air quality issues in the 1950s. California responded with ongoing innovative policies that reduced toxic emissions from vehicles and stationary sources (see Policy Timeline section). The federal government followed the state’s lead, passing clean air legislation and acknowledging California’s first mover authority. In fact, the U.S. developed more stringent tailpipe emissions regulations modeled after those in California beginning with model year (MY) 2012 vehicles as well.

    California’s Global Warming Solutions Act of 2006 (AB 32) was no less innovative. Tasked with implementation, the California Air Resources Board oversees ongoing development of a mix of standards and incentives, along with strong emissions targets, designed to reduce emissions efficiently while still growing the economy.


    Over the past ten years, the Index has tracked implementation of these policies alongside economic indicators. One essential finding: Policy creates market certainty and helps drive investment and technology advancement.

    Significantly, California beats all but China and the U.S. as a whole, when it comes to clean technology investment. In 2017, California attracted the third largest inflow of global clean technology venture capital funding ($1.42 billion). In California, investment in the Agriculture & Food segment increased 1,243.7 percent, investment in Transportation increased 798.1 percent, and investment in Recycling & Waste increased by 527.6 percent between 2007 and 2017. All told, the state pulled in over $22 billion in clean technology venture capital funding in the ten years from 2007 to 2017. During this same period, global clean technology venture capital funding increased 121.2 percent, topping out in 2017 at $7.78 billion. California’s share of this total has ranged from 46 percent to 18 percent.

    Investment spurs technology innovation. In 2017, California captured more clean technology patents globally (more than 5%) than China (4%). The U.S. (not including California) had the most patents globally, with 24 percent, followed by South Korea, which produced 6 percent of global patents. California’s share of global patents increased from 4.2 percent in 2007 to 5.4 percent in 2017.

    Globally, the most patents were in Renewable Energy (17,931), followed by Green Materials (12,997) and Energy Storage (11,177) in 2017. The number of California clean technology patents increased 342 percent between 2007 and 2017. This number is compelling, because California was already producing a high number of clean tech patents in 2007. The global number of clean technology patents increased 243.8 percent during the ten-year period from 2007 to 2017 from 21,008 to 77,376.


    Innovation in policy and technology is delivering results for both the environment and the economy. Between 2006 and 2016, California had greater emissions reductions (-11.1%) than the U.S. as a whole (-10.2%) while also achieving greater economic output (15.9% growth compared to 11.6%). The European Union (EU-28) achieved a greater decrease (16.9%) than California from 2006 to 2016, but its real economic output was almost half (8.8 percent) that of California’s.

    On a per capita basis, California’s output increased by 6.8 percent over the ten years compared to a 3.2 percent increase in the U.S. as a whole. EU-28’s real output per capita increased 5.6 percent during the time period. California reduced emissions by 18 percent per capita compared to 17 percent in the U.S. and 19.6 percent in the EU.

    When looking at the global level, California was still the 18th-largest polluter in terms of carbon dioxide emissions from fossil fuel activities among the top 50 global polluters in 2015 (the latest year for which globally comparative data are available). Global emissions rose by 4.2 billion MTCO2e, or 15 percent, over the same period to 32.7 billion MTCO2e, led by China’s 3.13 billion MTCO2e (74%) share of the increase followed by India’s 704 MMTCO2e (17%) and Iran’s 204 MMTCO2e (5%), making California’s reduction over the ten years equivalent to 0.08 percent of the total 2015 global emissions.


    Over the last decade of data, California’s economy not only grew more than the U.S. economy as a whole – the state also experienced more job and wage growth. California increased employment 7.8 percent in 2016 compared to 2006, while the U.S. increased employment 6.0 percent. As of June 2018, California had the 7th-highest nonfarm employment percent increase among the fifty states since the previous employment peak.4

    Employment gains were also coupled with higher wages for California workers compared to their U.S. counterparts in 19 out of 20 major industries. Agriculture is the only industry where the average annual wage was lower in California than in the U.S. – by a modest 3.0 percent. However, as the comparative wage data is annualized over a full year, this wage difference may be due to the fact that many farm workers in California work less than full time or year-round.5


    California has remained competitive in rankings of energy productivity (measured by GDP relative to energy consumption) and energy consumption. In 2015, California ranked seventh among the top 50 polluters in terms of energy productivity and 37th in terms of lowest energy consumption per capita, beating out the U.S. as a whole which ranked 20th in energy productivity and 43rd in energy consumption per capita. Since 2005, many of the world’s leading economies have seen an increase in energy productivity, with California and the EU-28 countries enjoying the largest gains and Brazil falling behind.

    California’s electricity consumption decreased by 2.3 percent between 2006 and 2016, while per capita consumption decreased by 10.6 percent. As a result of decreased consumption and increased efficiency, electricity bills in the state also went down. The largest reduction was in the industrial sector (-47.2%), followed by residential (-5.4%), and commercial (-2.1%).

    California also increased its energy productivity 23.4 percent between 2005 and 2015. China had the largest improvement in energy productivity in this time period, experiencing a 48.7 percent gain, followed by the UK (+36%) and India (+35.9%).


    California currently has a more diverse renewable energy mix than many of its peers, including much more geothermal energy compared to the other top ten regions. In 2015, California’s renewable energy mix was 31.3 percent from solar, 25 percent from geothermal, 25.4 percent from wind, and 13.3 percent from biomass and waste. In comparison, China’s renewable energy mix was 63 percent from wind, 21.6 percent from biomass and waste, and 15.3 percent from solar. California’s renewable energy generation increased 130 percent between 2006 to 2016, reaching roughly 73,961 gigawatt hours (GWh).

    In this same period, China increased its renewable electricity generation a whopping 6,279 percent, while India increased its generation by 777 percent. The United States increased its generation by 238 percent, while the EU-28 saw an increase of 281 percent. Globally, renewable energy generation increased 339 percent between 2005 and 2015.

    While also having a greater renewable energy mix, California has also brought a lot more renewable capacity online over the last ten years. The cumulative capacity of interconnected solar projects in California increased 1,254 percent between 2007 and 2017, while the state’s cumulative wind capacity increased by 127.8 percent during the same period.

    All states and nations experienced a huge boom in solar energy generation between 2005 and 2015. California experienced an increase of 2,571 percent. From 2006 to 2016, the increase was even larger, at 3,727 percent.

    Solar generation increased 61,049 percent in China, 29,584 percent in India, over 4,424 percent in the U.S., and 7,235 percent in EU-28. Globally, solar generation increased 6,327 percent in those ten years.

    Wind power experienced smaller but significant increases between 2005 and 2015, jumping 701 percent globally. This includes a 9,060 percent jump in China, 970 percent increase in the U.S., 442 percent in California, and 325 percent in EU-28.

    In 2015, California ranked seventh in share of electricity from renewable sources, overtaken by Belgium, which moved from the seventh to the sixth spot in the rankings. However, in 2005, California’s share of electricity from renewable resources was 12.2 percent and has increased to 18.4 percent in 2015.


    Over the last decade, California has also increased the number of electric vehicles (EVs) on the road, with 8 percent of the global total by the end of 2017 – the same as the rest of the U.S. combined. China has recently implemented policies to spur electric vehicle sales in the country and is on pace to hit one million in annual sales in 2018.6 In order to achieve the country’s goal of two million electric vehicle sales by 2020, China has ramped up incentives and placed restrictions on traditional internal combustion engine (ICE) vehicles. As a result of these policies and their large population, China accounted for 49 percent of total EV sales in 2017 – the most in the world, and nearly twice that of the next top EV adopter (Europe).

    In addition to EVs, increased public transit ridership also helps to reduce transportation-related emissions. Unfortunately, the public transit ridership in California has actually decreased between 2006 and 2016 in all of five of the major metropolitan areas aside from one. Ridership decreased in Los Angeles-Long Beach-Anaheim (-19.1%), SacramentoRoseville-Arden-Arcade (-25.5%), San Diego-Carlsbad (-1.1%), and San Jose-Sunnyvale-Santa Clara (-13.9%). San-Francisco-Oakland-Hayward increased by 4.8 percent.


    As state, national and international leaders converge on San Francisco for the Global Climate Action Summit, there are important lessons from California’s experience to share. The tenth edition of the California Green Innovation Index, provides an overview of what the state has achieved while identifying opportunities for improvement.

    While California is a world leader when it comes to cutting emissions while growing the economy, it cannot go it alone. The state’s annual GHG emissions from energy consumption represent only 1.1 percent of the global total – even if the state were to reduce its emissions to zero, 98.9 percent of global emissions from energy consumption would still be released.7 Global collaboration is critical to continued progress toward climate change mitigation worldwide.

    California is not alone in its commitment to advance clean energy technologies, investment, and policies, and there are opportunities to learn from other global leaders. While the state has enjoyed great progress and success in incentivizing investment and innovation paired with ambitious climate goals over the last decade, many leading global economies have also seen rapid progress in these areas – some even eclipsing the Golden State in key areas like electric vehicle adoption (China).

    The Index looks beyond just California’s or the United States’ borders to track progress across key environmental and economic indicators. Identifying progress internationally is critical to understanding where global trends on climate action may be heading and how collaboration may advance emissions reductions and spur greater clean energy innovation.

    As this Index chronicles, California has much work ahead if it is to continue to hit its ambitious climate change goals – achieving steep reductions in emissions in the transportation sector chief among them. Emissions from surface transportation increased 2.1 percent in 2016 over 2015, but the emissions are 8.8 percent lower than in 2006. Transportation currently makes up 40.5 percent of the state’s emissions, the largest sector, and it has been ticking up over recent years as vehicle miles traveled increase despite improvements in fuel economy due to California’s stringent emissions regulations.

    But as this 10th edition of the California Green Innovation Index also makes clear: Subnational, national and international coordination have the potential to spark a virtuous cycle globally, with innovative policy spurring investment and technological advancements to reduce emissions and grow economies. California is a good example of how the combination of these factors can produce real emissions reductions without sacrificing economic growth and prosperity


    On May 19, 2015, Governor Brown signed the Under2 MOU, a first-of-its-kind agreement, alongside leaders from 11 other states, regions and provinces around the world. Under the international agreement, signatories commit to reducing greenhouse gas emissions by 80 to 95 percent compared to 1990 levels, or limiting to 2 annual metric tons per capita, by 2050. The Under2 Coalition is driven by a group of state and regional governments committed to keeping global temperature rises to under 2 degrees Celsius. The Under2 Coalition focuses on three key work streams:

    • Deep decarbonization pathway planning: supporting governments to develop robust medium and long-term (2050) emissions reduction plans in line with the goals of the Paris Climate Agreement.

    • Scaling innovative policy solutions: spreading best climate policies and developing new policies to ensure full decarbonization.

    • Mainstreaming transparency: supporting governments so they have the expertise and systems in place to assess their emissions accurately, track progress and ensure policies remain fit for delivering against climate targets.

    So far, many Under2 Coalition members are on track to deliver emissions-reduction goals ahead of their 2020 target dates.8 Carinthia (Austria), Catalonia (Spain), Connecticut (U.S.), Lombardy (Italy), Madeira (Portugal), Provence-Alpes-Côte d’Azur (France), and Wallonia (Belgium) have already met their 2020 reduction goals ahead of time. In addition, Blekinge (Sweden), Hesse (Germany), Lower Austria (Austria), and Scotland (U.K.) are very close to meeting their 2020 goals. As of July 2018, there were a total of 206 jurisdictions, representing 43 countries and six continents that had signed or endorsed the Under2 MOU. The Under2 Coalition represents more than 1.3 billion people and $30 trillion in GDP – equivalent to 17 percent of the global population and 40 percent of the global economy.


    July 10, 2018: California, the Under2 Coalition and global partners launched the Zero Emission Vehicle (ZEV) Challenge to help leverage purchasing and policy influence to accelerate ZEV adoption.9

    June 14, 2018: Governor Brown welcomed Portugal as the 20th national endorser of the Under2 Coalition.10

    May 19, 2018: The Under2 Coalition celebrated its threeyear anniversary.11 November 14, 2017: The Under2 Coalition surpassed over 200 jurisdictions during the United Nations climate change conference, COP23, in Bonn.12

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