Yesterday, millions of votes were tallied across the country and meticulously recorded to determine who would make up the nation’s next group of elected leaders. At noon yesterday, in the midst of this election activity, the California Air Resources Board (CARB) released a report of its own careful counting; not of votes, but of 2013 greenhouse gas emissions, collected under California’s Mandatory Greenhouse Gas Reporting program. Under this program, California’s largest polluters across all sectors are required to report their emissions and have them checked by a CARB-accredited verifier.
Covered emissions decrease
Today's report revealed that emissions currently covered by the state’s cap-and-trade program decreased by almost 4% to 145 million metric tons (MMT) of CO2E. This is 11% under California’s stringent cap of 162.8 MMT for 2013, indicating that the state is on track to reduce emissions back to 1990 levels by 2020. Complementary policies established under AB 32, such as the Renewable Portfolio Standard and the Low Carbon Fuel Standard, are almost certainly playing a significant role in keeping emissions down. Because these other measures drive reductions in emissions within the cap, the cap-and-trade program essentially functions as an insurance policy, guaranteeing the state meets or even beats its reduction targets.
California’s economy flourishes while companies comply with cap-and-trade
Total reported emissions, including those not covered under the cap-and-trade program, increased from 2012 to 2013 by a very slim tenth of a percentage point. Over this same period, California data shows that the state gross domestic product (GDP), a commonly used measure of the health of the economy, increased by over 2%. So, while the state’s economy grew, emissions did not grow proportionally with it, showing that it is possible to break the link between economic output from emissions output. Job growth in California throughout 2013 was also impressive, beating the national average.
In addition to reporting emissions every year, regulated polluters must also surrender some emissions allowances each year. Yesterday, covered businesses did this for the first time, turning in enough allowances to account for 30% of their 2013 emissions. ARB confirmed that they saw 100% compliance with this surrender requirement, showing that businesses are ready and able to incorporate cap-and-trade obligations into their regular business practices.
Sights set on post-2020
As significant progress is being made towards the state’s 2020 goals, focus is beginning to turn to California’s ambitious long-term target: to reduce emissions down to 80% below 1990 levels by 2050. To achieve this, CARB, the Governor's office, and some members of the legislature are calling for a midterm target to keep the state on a path to deep reductions. Next year, we will take another important step towards this goal when transportation sector emissions, representing 38% of state GHG pollution, are regulated under the cap-and-trade program.
Today's results show that, as we prepare for these critical next steps, California has a strong foundation to build on with its cap-and-trade program. For more in-depth analysis of the emissions data released today, look out for EDF’s second annual report on California’s cap-and-trade program in January 2015.