Author Archives: Derek Walker

New study: America’s biggest carbon market delivers for economy and climate

Source: Flickr/Chris Goldberg

Would you believe there's a state that cut pollution and cleaned up its air, while creating jobs and sustaining economic growth?

And where economic incentives, rather than costly regulations, are stimulating innovation and investment?

California passed the earliest, most comprehensive law to set a cap on carbon pollution, along with numerous other complementary policies to help the state transition to a low-carbon, clean-energy economy.

The results are now coming in and the present – and future – looks bright.

Two years after it was fully implemented, California's cap-and-trade program is thriving, a new report [PDF] from Environmental Defense Fund shows.

The program is now ramping up as the state economy is growing, paving the way for California to pass even stronger climate policies. Perhaps most important, it's laying the groundwork for other states and nations to move forward with similar steps.

The four top findings from our report:

1. California’s cap is driving down greenhouse gas pollution while allowing the economy to grow. 

The state has been able to grow its economy significantly while keeping greenhouse gas pollution from rising, too.

Emissions capped under the program decreased by almost 4 percent during the first year of the program. What’s more, California’s ambitious climate change and clean energy policies have created a thriving economy that is growing faster than the overall national economy and attracting considerable amounts of investment.

Since 2006, California has received more clean-tech venture capital investment than all other states combined and leads the rest of the nation in clean-tech patent registration.

2. California has built a robust carbon market that is getting progressively stronger.

Companies can purchase allowances through quarterly auctions or on the secondary market. The results of nine successful auctions to date reflect a healthy level of interest for carbon allowances and confidence among companies in the long-term health of the program.

In addition, California successfully linked its program with Quebec’s over the past year, proving that motivated governments can work effectively together and do more in partnership than they can alone.

This outcome may inspire similar linkages around the world.

3. Companies are taking the program seriously.

Every single company regulated by California’s carbon cap acquired enough allowances to meet their first compliance deadline.

This proves, in a strong way, that companies are incorporating the price on carbon into their business models and actively planning how they will comply with the regulation.

4. Success begets confidence and commitment in climate policies.

During the 2013-2014 California legislative session, several bills designed to strengthen the cap-and-trade program passed, while measures that would have harmed or derailed the program all failed to move forward.

Gov. Jerry Brown and other state government leaders have called for more ambitious goals to be set beyond the current 2020 goal.

California’s success creates momentum for national and global climate action, offering lessons and insights to other states and nations all over the world that are weighing similar actions to help avert the worst effects of climate change.

In fact, cities, states, and regions are at the front lines of developing effective solutions chart the path for climate progress on a much bigger scale.

Cap-and-trade is not the only answer to climate change.

But the results from California’s program show that with a long-term vision and strong leadership – along with effective collaboration between government, businesses and communities, stakeholders –  it’s one of the strongest answers we’ve got.

This post originally appeared on EDF Voices.

Posted in Greenhouse Gas Emissions, Policy| Comments are closed

Lima climate talks showcase another path to global climate action: through states, provinces and cities

Kevin de Leon Peru COP
California state Senate President Kevin de León arrives at the conference center for the UN climate talks in Lima, Peru. Image used with permission from Senator de León.

The chattering classes of the climate policy world are abuzz with their customary post-mortems following the latest breathless two-week session of the United Nations Framework on Climate Change 20th Conference of Parties (also known simply as COP 20), held in Lima, Peru.

Consensus is forming around a “slightly better than nothing” assessment of the Lima Call for Climate Action, which was adopted in the wee hours of Sunday amidst the usual skirmishes over money, monitoring, and mandates.

Lima clarified some of the expected content of the national pledges (“Intended Nationally Determined Contributions,” INDCs in COP shorthand) to be presented by all countries next year.

Notwithstanding the softness engendered by the word “intended,” at least we aren’t firmly stuck in the “old world order” where only developed countries are taking on mitigation actions.

Subnational cooperation and pathways to climate progress outside UN process

While nations squabbled about intentions, another story was playing out on the sidelines of the COP, showcasing real, groundbreaking and consequential progress at the subnational level – within states, provinces, and cities.

After spending the vast majority of my time in Lima with innovative and dynamic subnational leaders, I came away with an unbridled sense of optimism and renewed hope that there are pathways to climate progress, even if many of them go around rather than through the formal UN process.

California, laboratory of climate change solutions

California delegation to COP 20
California's delegation to the Lima climate negotiations. Image used with permission from Senator de León.

California has long been a laboratory of climate change solutions and will be expanding its cap-and-trade program to cover transportation fuels in two short weeks.

Meetings with the California contingent are always a sought-after ticket at the COPs, and California delegates are always eager to learn from and trade ideas with their counterparts around the world.

California’s low-carbon leadership was amplified in Lima by Senate President Kevin de León, who regaled delegates with his always charismatic case for the connection between climate action, jobs, and economic growth, pointing to California’s cap-and-trade system as an example of how California can "lead the world and show other nations the way to de-carbonize their economies."

A very encouraging trend is the evolution of subnational cooperation from platitudes to concrete plans.

Partnership between California and China

I moderated a panel highlighting the collaboration between California and China, a partnership that involves a substantive, two-way exchange of ideas and expertise on issues such as emissions trading, clean vehicles, sustainable infrastructure, and technology deployment.

In less than two years, cities and provinces in China have developed pilot cap-and-trade programs that are paving the way for a future national emissions trading system in China. California has a lot to learn from the Chinese experience, and Chinese leaders studied the design of California’s system as the pilots were being developed.

Cooperation among North American states and provinces

Subnational partnerships in North America are taking off, in part because of the lack of action at the national level, particularly in the U.S. and Canada.

California and Quebec recently completed a successful joint allowance auction, the final step in fully linking the two jurisdictions’ cap-and-trade systems.

In Lima, the top environmental officials from California, British Columbia, Ontario, and Quebec issued a joint statement resolving to “work together towards mid-term greenhouse gas reduction goals,” a key step towards locking in long-term action and unleashing innovation in low-carbon technologies.

California Governor Jerry Brown announced his support for a 2030 GHG target at the UN Climate Summit in September, and legislation has been introduced in California that would establish a 2050 mandate and require interim targets in 2030 and 2040.

Commitments from subnational governments

While countries are submitting their INDCs, subnational governments are also putting their commitments to paper.

An important initiative called The Compact of States and Regions, launched at the UN Climate Summit by The Climate Group, will aggregate and evaluate the commitments being taken by subnational governments around the world.

States, provinces, and cities are not waiting for the UN or their national governments to act.

Meanwhile, Governor Brown’s indefatigable policy czar Ken Alex is spearheading a “subnational INDC process,” wherein subnational leaders around the world will be invited to sign an agreement, to be unveiled over the next year, committing to reducing their emissions at least 80% below 1990 levels by 2050, or to cutting their per capita emissions to below two tons.

Thankfully, states, provinces, and cities are not waiting for the UN or their national governments to act. There is a lot to be optimistic about, and subnational and subnational governments are showing leadership and forging ahead in what could be seen as a friendly competition to develop and implement the boldest and most successful climate change initiatives.

These leaders are restless, motivated, and they realize that the future of people and the planet are at stake. As my friend Glen Murray, Ontario’s Minister of the Environment, said time and again in Lima: “We’re going to do this.”

This post originally appeared on our EDF Talks Global Climate Blog.

Posted in Greenhouse Gas Emissions, International, News, Policy| Read 1 Response

Carbon markets reward 10 pioneering states. Who's next?

Source: Flickr/Nick Humphries

A handful of states are already proving that economic growth and environmental protection can go hand in hand – and they’re using market forces, price signals and economic incentives to meet their goals.

These results are particularly salient as states consider how to comply with the U.S. Environmental Protection Agency’s plan to limit dangerous pollution from power plants.

So let's take a closer look at what's happening on our two coasts.

California: 4% cut in emissions, 2% growth

California’s landmark cap-and-trade program is closing out its second year with some strong results. Between 2012 and 2013, greenhouse gas emissions from the 350+ facilities covered by the program dropped by 4 percent, putting California solidly on track to meet its goal to cut emissions to 1990 levels by 2020.

During the same period, the state’s gross domestic product jumped 2 percent.

What’s more, the climate change and clean energy policies ushered in by California’s Global Warming Solutions Act of 2006 helped slash carbon pollution from in-state and imported electricity by 16 percent between 2005 and 2012.

All this while attracting more clean-tech venture capital to California than to all other states combined.

Northeast: GDP rises as emissions and power prices drop

Those who would rather turn east for inspiration can look to the nine-state Regional Greenhouse Gas Initiative, a cap-and-trade system stretching from Maryland to Maine.

Since the RGGI program launched in 2009, participating states have cut their greenhouse gas emissions 2.7 times more than non-RGGI states, while growing their gross domestic product 2.5 times more than non-RGGI states.

The states have experienced these dramatic win-win benefitswhile also seeing retail electricity prices across the region decline by an average of 8 percent.

With 70 percent of Americans supporting EPA’s Clean Power Plan – and given that everyone warms up to the notion of a sound economy – can these carbon markets be replicated elsewhere?

States choose their own path

EPA’s rules aim to cut power plant pollution by 30 percent by 2030, giving states individual reduction targets along withgreat flexibility to meet that national goal.

Hitting the sweet spot of supporting economic growth and environmental protection will be a primary objective, and the options are virtually endless. Energy efficiency, renewable energy, power plant efficiency and cap-and-trade are all good bets.

Expanded markets offer new options

Not surprisingly, EPA mentioned RGGI numerous times in its proposed power plant standards as an efficient way to cut carbon pollution. Since then, experts have suggested that regional markets, or even a single national market in which all 50 states participate, may be a way to make the plan affordable.

States still have some time to ponder their options.

EPA is expected to finalize the rule in summer 2015, and states have another year after that to submit plans to EPA detailing how they intend to meet their targets. Those entering into multistate agreements have three years.

The good news is that they wouldn’t be starting from scratch. The experiences of California and the RGGI states can provide useful, real-world insights as states plot their path toward a clean energy future.

This post originally appeared on our EDF Voices blog

Posted in Clean Air Act, Clean Power Plan, Economics, Energy, Greenhouse Gas Emissions, Policy| Comments are closed

EPA Hands Over the Keys with Clean Power Plan, California Already on Cruise Control

EPA’s Clean Power Plan, proposed today, is a roadmap for cutting dangerous pollution from power plants, and as with any map, there are many roads to follow. For this journey, states are in the driver’s seat and can steer themselves in the direction most beneficial to their people and to the state’s economy, as long as they show EPA they are staying on the map and ultimately reaching the final destination.

As usual, California got off to a head start, explored the territory, blazed a lot of new trails, and left a number of clues on how states can transition to a lower carbon future, and California’s successes are one proven, potential model for other states to follow. The state’s legacy of clean energy and energy efficiency progress is a big reason the White House and EPA could roll out the most significant national climate change action in U.S. history.

Way back in the mid-1970s, when Governor Jerry Brown did his first tour of duty, California pioneered what remains one of the most effective tools for cutting pollution and saving money:  energy efficiency. The state’s efficiency standards, largely aimed at buildings and appliances, have saved Californians $74 billion and avoided the construction of more than 30 power plants. All those energy savings have translated into California residential electricity bills that are 25% lower than the national average.  What’s more, California produces twice as much economic output per kilowatt hour of electricity usage as the national average.

While energy efficiency has done yeoman’s work pulling costs down, reducing the need for dirty energy, and supercharging the state’s clean energy economy, California has also brought bold approaches to cleaning up its power supply. The California Renewable Portfolio Standard (RPS) requires 33% of all electricity sold in California to come from renewable sources by 2020, the most aggressive of the 29 states with RPS measures on the books.

In 2006, California enacted Senate Bill 1368, a groundbreaking law that set the nation’s first greenhouse gas emissions standard for power plants, a forerunner of EPA’s Clean Power Plan announced today. The same year, the Global Warming Solutions Act (AB 32) instituted a statewide limit on greenhouse gas emissions, requiring California to return to 1990 levels by 2020. Power plants are capped under AB 32’s successful cap-and-trade program, another precedent that set the table for EPA’s Clean Power Plan, which establishes a national limit on power plant pollution for the first time. This robust suite of policies resulted in California cutting carbon pollution from in-state and imported electricity by 16% between 2005 and 2010-2012.

Given this track record, it’s no surprise that Californians strongly support pollution limits on power plants. According to the Public Policy Institute of California (PPIC) 2013 survey, 76% of Californians support “stricter emissions limits on power plants,” and 65% of survey respondents say that California should act immediately to cut emissions and not wait for the economy to improve, a record-high level of support. The survey also shows that Californians believe the economy will improve because of strong environmental regulations, and that you don’t have to have one or the other. Data corroborating this view continues to pile up:  the state now has its lowest unemployment rate since 2008 even with increasingly stringent environmental policies.

California is proof positive that states can fashion creative policies that improve their environmental and economic bottom line, and that’s exactly what will be needed to make EPA’s Clean Power Plan a durable and resounding success. California’s roadmap includes a variety of alternative routes, giving other states a chance to adopt or adapt them to meet the needs of their own unique journeys toward a healthier future.

This post first appeared on our California Dream 2.0 blog.

Posted in Cars and Pollution, Clean Air Act, Clean Power Plan, Energy, Greenhouse Gas Emissions, News, Policy| Read 1 Response

California Pushes Ahead with a Carbon Cap, Ahead of Schedule

California has the world’s eighth largest economy and a well-earned reputation as a global trendsetter on environmental policy.

It should come as no surprise that Californians are out of the gate on the most urgent environmental challenge of our generation: building a clean energy future that protects the world from catastrophic global warming.

Given that the countdown to Copenhagen is underway and the White House and Congress are weighing proposals and priorities, California’s leadership-by-example means more than ever.

Today, the California Air Resources Board unveiled a conceptual outline – a Preliminary Draft Regulation (PDR) [PDF file, 800K]- of what will become a mandatory, multi-sector cap-and-trade program to take effect on January 1, 2012.  The program will set an absolute limit on sources of 85 percent of the state’s pollution, dialing back pollution levels by 15 percent between now and 2020. California leaders project that a final cap-and-trade program will be adopted by the state’s environmental agency in October 2010, two months ahead of the statutory deadline.

Today’s action is another step on the path to a clean energy future that will create economic opportunities and environmental benefits for all Californians.

The stage was set for today in 2006, when Governor Schwarzenegger signed the landmark Global Warming Solutions Act (AB 32), a mandatory cap on greenhouse gas emissions in the state. The bill’s passage inspired several other states to adopt similar measures and led seven U.S. states and four Canadian provinces to commit to a regional cap-and-trade program called the Western Climate Initiative.

Get more details on the announcement from our press release, and keep tabs on the California cap-and-trade process on Air Resources Board's site.

Posted in Policy| Read 5 Responses

Victory in California: Prop 98 Defeated!

Derek WalkerThis post is by Derek Walker, deputy director of the State Climate Campaign and director of the California Climate Initiative at Environmental Defense Fund.

Two weeks ago I posted about California's Dangerous "Proposition 98", with hidden provisions threatening the state's environmental laws. The alternative, Proposition 99, achieves the stated goals of Proposition 98 (protecting homeowners from having their dwellings seized for development) without threatening environmental protections.

The vote took place on Tuesday, and I have good news to report.

Read More »

Posted in News| Read 2 Responses
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