Author Archives: Erica Morehouse

For Landmark Climate Change Law to Work, California Must Stay the Course

rp_erica-morehouse-287x377-228x300.jpgFor months, EDF has been reporting on the exciting conversations happening at the California Air Resources Board (CARB) and the Governor's office on the impressive progress California is making towards meeting its AB 32 climate protection goals and on what comes next for the state beyond 2020.

Yesterday, I had the privilege of continuing the dialogue as I testified in support of the AB 32 Scoping Plan Update before the California Assembly’s Natural Resources Committee. While some have recently debated the benefits of AB 32 and its cornerstone cap and trade program, most Californians recognize the benefits that the landmark law has delivered since its adoption in 2006, as well as the progress it promises with continued support from state leaders.

As the rest of the nation (and the world) eyes California, it is imperative that we remain focused on sustaining and strengthening the world’s most comprehensive climate change program,  and ensuring we remain on the path to reaching our 2020 and future greenhouse gas emission reduction goals. Read More »

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California and Quebec: A Partnership Par Excellence

rp_erica-morehouse-287x377-228x300.jpgOn Tuesday, the Canadian province of Quebec held its second cap-and-trade allowance auction.

Today, the results are in – and they’re encouraging.

99% of the current vintage year allowances and 84% of the future vintage year allowances offered for sale in this auction were purchased at the floor price of $11.39 CAD.  This is a significant increase from Quebec’s first action, which saw the sale of only 34% and 27% of current and future allowances, respectively.

These results reflect growing interest and demand in this burgeoning carbon market after it officially linked with California’s program at the beginning of 2014.

However, the results of Quebec’s auction are a bit different from the results we saw in California's sixth auction last month. Most notably, California’s auction saw higher demand for allowances, driving the settlement prices for both current and future allowances above those seen in Quebec’s auction.

So, why do these differences exist?  And what do the Quebec auctions actually tell us?  Read More »

Posted in Cap-and-trade auction, General, Linkage | Comments closed

First Scoping Plan Update Lays Groundwork for a Low-Carbon Future

Erica Morehouse photoThe Proposed First Update to the AB 32 Scoping Plan (Proposed Update), released today by the California Air Resources Board (CARB), is a more focused and ambitious version of the document first released last fall that is part of a larger California climate strategy. Importantly, the Proposed Update continues to build a framework for significant post-2020 carbon pollution reductions needed for the state.

California is on the cutting edge of climate action but is not alone on the international stage when it comes to planning for the future. On January 22nd, the European Commission released a climate and energy plan proposing the EU reduce emissions 40% below 1990 levels by 2030.  Last November, Mexico announced plans for a carbon tax that will include offsets.  And last summer, President Obama released a Climate Action Plan that builds on much of California's success especially in the areas of reducing emissions from cars and trucks and controlling emissions from new and existing power plants.

CARB’s Proposed First Scoping Plan Update:

Recommends smart 2030 targets

This Proposed Update recognizes that not only do we need to dramatically reduce carbon pollution in the first half of the 21st century, but with commitment and planning it is an attainable goal. Achieving an 80% reduction from 1990 levels by 2050 will mean California must slash emissions across the board and CARB is recommending that every sector explored – transportation, energy, waste, water, agriculture, and natural and working lands – should have a sector-specific target.  It's appropriate that California first focused on big emitting sectors like energy and transportation, but sectors like agriculture and working lands which are harder to regulate can't be ignored as we consider long-term reduction goals. These sector targets will serve as guides for cutting pollution, driving innovation, and spurring investment in California.

Positions California as an international leader and collaborator

The Proposed Update recognizes that in order to remain at the forefront of international leadership, California must continue to lead by planning for reductions after 2020 and by continuing collaborations with other states, provinces, and countries that are taking action on climate change.

The Proposed Update identifies international sectoral offsets, such as Reducing Emissions from Deforestation and Degradation (REDD), as a potential key opportunity for California to help curb deforestation, the cause of roughly 15% of the world’s greenhouse gas emissions, while efficiently meeting the state’s domestic emission reduction targets.  The state’s engagement on REDD, along with the ongoing collaborations with China, Mexico, and other U.S. states, is a building block of meaningful global climate leadership

Provides economic opportunity

The Proposed Update articulates how economic opportunity goes hand in hand with innovative environmental solutions. California has enjoyed a strong economic recovery during the first year of cap and trade, but the state isn’t turning a blind eye to the challenges that lie ahead. California needs significant innovation before we can reach our target of 80% reductions below 1990 levels by 2050. CARB’s plan will encourage new economic opportunities and ways to cost-effectively reduce carbon pollution such as: carbon capture and sequestration, expanding the electrification of our personal car fleet, and developing reliable electricity storage. We can expect to see growth in low-carbon sectors, new clean energy jobs, and auction proceeds investments that will further strengthen local communities and businesses.

Prioritizes emission reductions in uncapped sectors 

This plan brings needed attention to emission reductions in sectors not regulated by cap and trade such as agriculture, working lands, water, and waste, and recommends setting sector-specific targets. CARB identifies pragmatic policies for these uncapped sectors such as incentivizing the efficient use of fertilizers and reuse of organic materials. CARB should continue to promote these opportunities, and recognize that pragmatic working and natural lands policies will also provide co-benefits such as more efficient water use.

As the saying goes, “A goal without a plan is just a wish.” CARB’s Proposed Update not only lays the groundwork for a low-carbon and clean-energy future, but points us towards strategic, and quantifiable, short and long-term goals – potential opportunities that will spark a much-needed conversation about what is possible as we approach 2030 and beyond.

Posted in Cap and trade, Global Warming Solutions Act: AB 32, Jobs, Offsets | Comments closed

A “Virtuous Cycle” of Low-Carbon Investments Especially for California's Most Disadvantaged Communities

Erica Morehouse photoCalifornians will see a “virtuous cycle” of low-carbon investments begin as cap-and-trade auction proceeds finally head out the door starting this summer.  This is the news from the Brown administration this week detailing how they propose to start investing dollars from 2014 carbon auctions while beginning to repay the $500 million borrowed last year.

We are especially excited to see that California's most disadvantaged communities — the ones that have suffered environmental burdens for years and will be hit hardest by climate change in the future — will see more than the mandated 25% of auction proceeds invested for their benefit.  Consistent with an investment plan released last year, there will be three major categories: sustainable communities and low-carbon transportation, energy efficiency and clean energy, and natural resources and waste diversion.   Clean transportation and sustainable communities will receive the largest chunk ($350 million) of the proposed $850 million investment.  This means we will see investments in solutions such as clean trucks and buses, electric vehicle rebates, zero-emission freight demonstration projects, and enhanced connectivity and modernization for public transit in disadvantaged communities.

Investments like these will create big wins for California’s most at-risk communities.

Consider this: Diesel trucks and buses are the single-largest source of toxic diesel pollution in the state, causing cancer, heart attacks, breathing emergencies, lost days at work, and even premature death.  Similarly, alternative personal vehicles like those with electric batteries can provide benefits to communities.  A recent study by ICF and an earlier study from UC Berkeley both showed significant benefits from investments in clean transportation and other low-carbon investments which include job creation, increased gross state product, and increases in personal incomes, not to mention indirect health care savings.

Why do we call this a “virtuous cycle” of investment?

The economic benefits are not simply the direct benefits you may think of first, such as job growth in areas like manufacturing and selling clean trucks, buses, and vehicles.  Research also shows that when you save $1 on energy costs — which would more than likely go to an international oil conglomerate — the benefit to the economy is $16.

How does this work?  Instead of sending those dollars overseas, you're most likely spending them in your community, on local products and services.

Today, Governor Brown committed to the first of many critical cap-and-trade investments in disadvantaged communities and cleaner options for Californians. With this new virtuous cycle of investment, we expect these and subsequent investments to pay dividends to the health of our citizens, our environment, and our economy for years to come.

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The Winning Trilogy to California's Climate Approach: Research, Reduce and Adapt

Erica Morehouse photoNirvana, Lord of the Rings movies and a tasty BLT. Great things seem to come in threes – and California’s vigilant efforts to combat climate change are no exception.

With this week’s release of a major climate adaptation plan draft from California's Natural Resources Agency, the state continues to take bold steps to address climate change and cut pollution using a “research, reduce and adapt” approach.

The winning trilogy:

Conduct Thorough Research

As EDF knows, good policy is grounded in science. National and international reports warn us of the dire consequences of climate change, and on the local level, research shows California is particularly vulnerable to its impacts.  The first step in addressing any problem is gathering the facts, which is why reports from the Climate Action Team (CAT) dive into California specific climate impacts and science on mitigation and adaptation.

Another component of climate research is looking at the hard numbers. How much carbon pollution are large facilities in California emitting? This data is released annually by the Air Resources Board and the US EPA. As recent numbers show, emissions at most of these facilities have been decreasing since 2008, but the state still has a lot work to do to reduce its overall emissions, especially after the closing of San Onofre Nuclear Generating Station.

Reduce Greenhouse Gas Emissions

Once policy makers are armed with the science and hard data, they must take action. The CAT’s first report led to the passage of AB 32, California's Global Warming Solutions Act, which aims to reduce the state’s greenhouse gas emissions to 1990 levels by 2020. The 2008 Scoping Plan gave a broad overview of how California will use different policies to meet this target, and last month EDF and other stakeholders submitted comments to the 5 year update draft of the Scoping Plan.

This update noted that California is on track to meet its 2020 target, and that the state should focus on setting a new reduction target for 2030 that will set us on the path to reduce greenhouse gas emissions 80% below 1990 levels by 2050. A second draft of this updated Scoping Plan is expected in late January.

Adapt to a Changing Climate

While reducing emissions to avoid catastrophic effects is absolutely critical, climate change is now a reality and some costly and damaging impacts are unavoidable.  That’s why in 2009 California became the first state to develop a comprehensive plan for adapting and living with expected climate impacts including drought, wildfires, rising sea levels and water shortage.

The draft 5-year update of the adaptation plan, released this week, looks at the ways we will need to adapt to things like changing water patterns, more hot days and increased demand on our electricity system.  In addition, the Natural Resources Agency noted the need to better understand impacts on wildlife and habitats, and assess the adequacy of our emergency response systems.

While the science keeps evolving, the need for adaptation to increased impacts keeps growing. And until the global trajectory of carbon pollution reverses, we must continue to push for innovative emission reducing policies.

This trilogy of interlocking strategies — research, reduction and adaptation — provides California with a solid foundation to continue its groundbreaking leadership on climate change.

Posted in Climate, Global Warming Solutions Act: AB 32 | 1 Response, comments now closed

Long-Term Emission Reduction Goal Starts with Post-2020 Policies

Independent experts and leaders in California agree that the state is on track to meet its goal of reducing greenhouse gas pollution to 1990 levels by 2020.  That was one finding from a report released by the Lawrence Berkeley National Laboratories (LBNL) today.  In this goal, California is somewhat like the weekend warrior, harboring dreams of running a marathon but focused on the immediate milestone just ahead – running a 5K next weekend.

Make no mistake, the Golden State has a bigger target on the horizon — reducing GHG pollution 80% below 1990 levels by 2050 – a marathon-like challenge that can seem daunting, especially to a state still in 5K mode, working to meet its more immediate 2020 goal.

Like any long-term training though, our would-be marathoner might first need to target their work outs toward running a half marathon.  Similarly, the California Air Resources Board and the Governor's Office of Planning and research have recently recommended that rather than focus on 2050, California should set a mid-term target for reducing pollution by 2030.

The LBNL report also demonstrates the wisdom of this approach.  The research looks at three policy scenarios and explores what reductions each would achieve: 1) policies California has already committed to i.e. those used to reach the 2020 target, 2) a suite of policies that reflects current proposals to strengthen existing policies and 3) strengthened scenario two policies plus likely technology upgrades like more electric vehicles and higher efficiency in cars and trucks.  The research found under the second and third scenarios, which are both considered realistic, emissions would decline by 32% or 50%, respectively, below 1990 levels by 2030. 2050 was not the focus of the study but the report did conclude that more would be needed beyond scenario three to meet the 2050 target.

The fact that reaching our 2050 target will be challenging shouldn't come as a surprise, just like it wouldn't be a surprise to find out that a new training regimen might be needed to run a marathon.  A 2011 study, by some of the same researchers, showed that California needs significant innovation before we can reach our 2050 target.  This effort to decarbonize our state may include technologies such as cost-effective carbon capture and sequestration, almost completely electrifying our personal car fleet, and developing reliable electricity storage.  It might seem like a lot now, but just think about all of the innovations we didn't have 30 years ago (the internet comes to mind) and more importantly, what critics said about the initial 2020 goals.

Like training for any long race, new research will help us focus on the magnitude of the challenges ahead.  This push will lead California and others to focus on policies that create and encourage innovations like the Low Carbon Fuel Standard and other clean energy policies.  This task also shows the importance of setting concrete intermediate goals showing where we want to be in 15 years.  And as we approach 2030, we can anticipate that innovation and an unwavering commitment to reducing greenhouse gas pollution will bring our 2050 targets into reach and get us past the finish line.

Posted in Clean Energy, Climate, Global Warming Solutions Act: AB 32 | Comments closed

Scoping Plan 2.0: Taking Action Today for a Clean Energy Future

Today, the California Air Resources Board (CARB) released its draft 2013 Scoping Plan, the blueprint outlining how the State will address climate change over the next five years, reach its goal of reducing greenhouse gas emissions to 1990 levels by 2020, and create a path for even deeper reductions beyond 2020.

The draft is full of smart and common sense ideas, but here are a few specific things to note about it:

It’s Ambitious

In this draft, CARB expressed the importance of setting a mid-term 2030 target to guide California's effort to achieve the deep reductions needed to avert disastrous climate change.

Let’s be clear, efforts to set a 2030 target are significant for California.  It will provide a crucial market signal for businesses that the state’s clean energy efforts are here for the long-term.

California is already on track for reaching its 2020 climate change target, but is not resting on its laurels.

"California needs a 2030 target that is consistent with the level of reduction needed in the developed world to stabilize warming at 2°C and aligns with targets under consideration elsewhere," ARB said.

Driven by a history of leadership, and a 2005 Executive Order signed by Governor Schwarzenegger for the state to reduce emissions 80% by 2050, CARB recognizes that there is much more that California can do to combat climate change. In their Scoping Plan comments, even the oil companies acknowledged “the AB 32 mandate does not vanish in 2020.”

It Doubles the Benefits

In this 2013 Scoping Plan draft CARB was directed by Governor Brown to prioritize areas to invest the state’s nearly $400 million in auction proceeds from cap and trade. In addition to placing a cap on carbon, these investments will help promote clean energy, reduce carbon pollution and foster innovation – and shows that environmental policy is also good economic policy. As ARB noted, "Programs such as sustainable community development and forests can provide near-term benefits while also laying the foundation for future, more ambitious projects.

It’s comprehensive

Reducing climate change pollution requires a collaborative approach across many sectors including water, energy, waste and natural resources – all of which are reflected in this draft. With this holistic approach, CARB can find cross-cutting ideas to move the state forward and advance the goals of AB 32. In EDF’s Scoping Plan comments we submitted recommendations in nine areas  and hope the State continues to take advantage of these interdependent opportunities.

Emissions in California fell every year from 2008- 2011, and sectors such as refineries and cement manufacturers are already taking advantage of energy saving opportunities. EDF commends CARB on using the 2013 Scoping Plan as a way to continue this trend, plan and invest in the future, and think big when it comes to addressing the most pressing environmental issues in California.

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Cap and Trade Needs Auctions like the Ocean Needs Whales

Source: National Geographic

Arguing that California’s cap-and-trade program doesn’t need to auction carbon allowances is like arguing that the ocean doesn’t need whales or that America doesn’t need bald eagles.  This is essentially what the California Chamber of Commerce and the Pacific Legal Foundation are arguing in a series of lawsuits against the Air Resources Board.  On Tuesday EDF and the Natural Resources Defense Council filed a brief with the Sacramento Superior Court pointing out just how ridiculous this argument is.

Like whales and bald eagles, auctions are quickly becoming a popular part of the cap-and-trade program because of the many environmental, health, and economic benefits that can come from investing auction proceeds to reduce GHGs.  But just as whales don’t exist because people think they are cute, auctions are not part of the cap-and-trade program because the public thinks they’re cool (although they are and people do).  If whales suddenly went extinct there may be a few (fishy) beneficiaries but the whole ocean ecosystem would be thrown off kilter. Like the whale, the auction is an integral part of a cohesive, functioning system for reducing climate change pollution.

Source: Flickr

Half of Plaintiffs argument is that AB 32 did not give ARB the authority to hold auctions under a cap-and-trade program when it gave them the authority to design a program to reduce GHG pollution to 1990 levels by 2020.  They argue that ARB doesn’t need to auction allowances in order meet this target.  But what they ignore is that ARB is supposed to meet this target while protecting low-income communities, maximizing total benefits to California, encouraging early pollution reductions, promoting equity, and encouraging cost-effective reductions. Auctions help California achieve all of these goals.

The other half of Plaintiffs argument is that the auction of carbon allowances is an illegal tax on businesses.  Interestingly they argue this not by comparing the auction to a tax and showing overwhelming similarities but instead by setting up a straw man that they can more easily shoot down.  To continue the whale analogy, it’s as if a scientist discovered a whale for the very first time.  The scientist really, really wants the whale to be a fish.  But instead of looking at whether whales have scales and are cold blooded, the scientist just says “well, it’s not a seal so it must be a fish”.  In our brief we take a more direct approach and lay out at least five reasons why auctions are different than taxes.  Just for starters, have you ever heard of a tax that people volunteer to pay?  Because as many as 12% of the participants in each auction have been buyers who have absolutely no obligation to turn over allowances under the cap-and-trade program.

Speaking of whales and bald eagles, some of the Plaintiffs in this case are no stranger to trying to drive them extinct.  The Pacific Legal Foundation which is representing some of the plaintiffs was a longtime proponent of DDT which nearly wiped out America’s bald eagles.

Posted in Cap and trade, Climate, Global Warming Solutions Act: AB 32, Litigation | Comments closed

California: A National Leader in an International Trend

California made history by implementing the US’ first economy-wide cap-and-trade program, holding its first auction in November 2012. Building on that success, the Golden State recently approved linkage between California’s and Quebec’s carbon markets, with the two jurisdictions planning to hold their first joint auction in January 2014.

A new online resource from EDF and the International Emissions Trading Association, a trade association that represents businesses involved in carbon trading and climate finance, demonstrates these milestones are part of a much bigger international trend of carbon markets. California is not “going it alone,” but rather leading the country’s efforts in the global momentum to address climate change through market mechanisms.

The World's Carbon Markets: A case study guide to emissions trading provides 18 case studies of carbon markets in operation or development around the world. In addition to California, these include the European Union, whose trading system has provided lessons for California, other US states, the Regional Greenhouse Gas Initiative (RGGI), and another system in Canada, Alberta’s Specified Gas Emitters Regulation.

Currently 10 percent of the world’s population — and one third of its GDP — comes from jurisdictions implementing a cap on carbon. With the world recently passing 400 ppm of CO2, these 18 systems are more than just a footnote; they represent real progress made to address greenhouse gas emissions and mitigate climate change.

Posted in Climate, General, Global Warming Solutions Act: AB 32 | Comments closed

California’s Cap-and-Trade Auction Investment Plan: Top 10 Reasons it’s a Winning Formula for California

California’s clean economy is dominated by industries like clean transportation, energy generation, and energy efficiency. So it comes as no surprise these areas were targeted for cap-and-trade auction proceeds investments in the draft investment plan released by the California Air Resources Board (CARB) last week and discussed at today’s CARB hearing.

 

 

 

 

 

 

 

 

 

 

 

 

Specifically, the plan lays out three major categories for investing auction proceeds: 1) Sustainable Communities and Clean Transportation 2) Energy Efficiency and Clean Energy, and 3) Natural Resources and Waste Diversion. Transportation and energy represent the two largest sources of GHG emissions in California, while natural resources and waste represents a huge untapped potential for reductions that will also create multiple benefits.

What are the facts though?  Why are we so sure that these are the right investments that will create a winning formula for California?

1.         It has worked before. A similar investment strategy in New England turned $912 million of proceeds from selling carbon allowances to the electricity sector into $1.6 billion in benefits which included reduced electricity bills and job creation.

2.         It targets our disadvantaged communities. There is clear data indicating  these communities are the most vulnerable to severe pollution and environmental harm and existing law requires at least 25% of auction proceeds benefit these communities. This investment plan lays out ways to exceed that target so that they can expect to disproportionately benefit from California’s plan.

EDF’s Invest to Grow Report showed that

3.         Investing in the state’s clean economy is investing in job growth. In California, it has added jobs up to 178% faster than traditional economic sectors over the past 15 years, meaning that we can expect investing auction proceeds in the clean economy will continue to spur job growth for years to come.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4.         California’s clean economy has proven more resilient during economic downturns than traditional economic sectors. While overall state unemployment fell seven percent during the recent recession, clean economy sectors remained stable. This means investing in the clean economy is a safe strategy for long term prosperity.   For example, the following graph shows that during economic downturns in 2002 and 2010, the green economic sectors either grew or remained stable while the rest of the economic retracted.

 

 

 

 

 

 

 

 

 

 

 

 

Investing in clean transportation makes sense because it …

5.         Will improve our health. California suffers from some of the dirtiest air in the nation. Forty percent of California’s GHG pollution comes from the transportation sector (cars, trucks, trains, etc.). Traffic pollution from cars also costs California nearly $15 billion in health damages annually. A recent report by the American Lung Association in California confirmed that in 2012, California was home to 11 of the nation’s 25 most polluted cities – so these investments are needed both now and in the future.

6.         Will create jobs. Every $1 billion invested in public transportation creates approximately 24,000 jobs in California – where the state unemployment rate is still about the national average.

Investing in clean energy and energy efficiency makes sense because it …

7.         Has already proven to be a game-changer for California. Energy efficiency projects have saved Californians over $66 billion in the last 35 years. and lowered energy use 25% below 2008 standards.

8.         Benefits recipients from cities and counties to businesses. An EDF’s Climate Corp program demonstrated that cities in North Carolina could save between $534,000 and $2,192,000 over a five year period.  Department of Energy assessments found that on average industry could reduce its electricity bills by 17% with energy efficiency projects that would pay for themselves in 1-2 years.  

Investing in natural resources makes sense because it …

 

 

 

 

 

 

 

 

 

 

 

9.         Helps farmers and the planet. Fertilizers commonly used in agriculture have a heavy GHG impact so reducing their use can generate big GHG savings; it can also save farmers money while reducing the release of harmful air and water pollutants.

10.      Protects open space and agricultural land. Together they can reduce vehicle miles traveled by preventing urban sprawl.  Estimates show that protecting 25 square miles of agricultural land would save an amount of energy that is sufficient to power 48,000 homes and would create health saving of $38.7 million by reducing air pollution.

Posted in Auction revenue, Clean Energy, Climate, Global Warming Solutions Act: AB 32 | Comments closed