Climate 411

California regulators prioritize keeping electric bills affordable over increasing utility shareholder profits

Energy bills have been on the rise across the nation — and California is no different. A recent study highlights a variety of factors impacting Californians electric costs, including increased costs to harden the system from wildfires and more investments in fixed-capital infrastructure.

Fortunately, energy regulators in California are poised to take two steps to address energy bill affordability, while still protecting the environment. The first is a critical decision on how energy utilities structure their profits, known as the “cost of capital”, and the second is a new set of rules focused on how California measures the affordability of utility services. 

EDF projects that, by bringing shareholder profits in check, these actions could result in over $300 million in annual savings for Californians.

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California’s latest cap-and-invest auction highlights opportunity for stronger climate action

Photo of the coastline in Malibu, California

Results released today for the California-Quebec cap-and-invest auction demonstrate that, while California’s reauthorization of the program through 2045 has helped keep prices off the floor, there’s clear appetite for greater ambition as California Air Resources Board (CARB) resumes its rulemaking process on program updates. The auction delivered largely stable results, with current vintages settling at a slightly lower price compared to the August auction while future vintages settled slightly higher. All current and future vintage allowances sold.

While these results demonstrate continued but modest improvement in market confidence (for context, uncertainty in the market cost California some $3 billion over the past year), they also show that there’s room for greater program ambition. The market can afford for CARB to do more to maximize the benefits of this landmark program for the state’s economy, cost of living and climate through the rulemaking process.

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New York doesn’t need to choose between climate action and affordability

A New York court recently found the Hochul administration to be in violation of its climate law for failing to put in place regulations that would achieve the state’s emissions limits. Just days after the court’s ruling, Governor Kathy Hochul signaled her intent to appeal, citing affordability concerns as the primary impediment to advancing the state’s climate goals.

But robust evidence in New York and experience from other states shows that the choice between climate action and affordability is a false one. By moving forward with cap-and-invest — a powerful and flexible policy tool — Governor Hochul can deliver on both.

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California Can Lead the Next Generation of Clean, Affordable Cars – Again

Photograph by Pierre Jeanneret

California has long led the way on standards and policies that advance clean, affordable vehicles. As the federal government threatens to roll back national vehicle climate protections, the California Air Resources Board (CARB) is charting a path forward with its Drive Forward light-duty vehicle standards – a program that can deliver cleaner air, stronger climate action, and more affordable options for drivers. Last week, Environmental Defense Fund (EDF) submitted comments urging CARB to move boldly and swiftly.

Stronger Standards to Protect Health, Cut Climate Pollution, and Expand Choice

EDF strongly supports CARB’s interest in next-generation, performance-based standards for greenhouse gases and tailpipe pollutants such as non-methane organic gases (NMOG) and oxides of nitrogen (NOx). NMOG and NOx contribute directly to smog and fine-particulate pollution that can harm lung development, worsen asthma and cardiovascular disease, and even increase the rate of premature deaths. Greenhouse gas pollution drives climate-fueled extreme weather that threatens public health and welfare.

Californians deserve cleaner air – verified both in laboratories and on real roads under real conditions. For instance, some vehicles still produce sharp emission spikes during uphill driving or in colder temperatures. We support CARB’s exploration of provisions to ensure emissions controls deliver their promised benefits throughout a vehicle’s useful life and under real-word conditions – on LA streets or Central Valley highways, in summer heatwaves or on cold winter mornings. Closing these real-world gaps is essential.

Next-generation standards can drive major pollution cuts while giving manufacturers multiple compliance pathways: electric vehicles, hybrids, plug-in hybrids, or lower-polluting internal-combustion engines. These cleaner options often cost less to fuel and maintain, saving drivers hundreds of dollars each year. Bottom line: Californians get cleaner air and more choices – and California continues setting a model others can freely adopt.

Near-Term Gains Matter – Early Action Can Deliver Them

We also support CARB’s interest in starting new standards as soon as possible, paired with meaningful incentives for manufacturers to take early action on delivering cleaner cars even more immediately. For example, accelerating cleaner models before 2030 would cut smog-forming pollution during the state’s worst ozone seasons – especially in the Central Valley and South Coast, which suffer from the nation’s most persistent ozone pollution year after year. Early reductions are essential for meeting health-based air quality standards and reducing smog and soot in communities that need relief now.

A Chance to Cut Air Pollution with Proven Technology

EDF urges CARB to strengthen its tailpipe particulate matter (PM) standard by aligning with the U.S. Environmental Protection Agency’s (EPA) most protective emissions requirements. Gasoline particulate filters are already widespread globally, including on many U.S.-made vehicles. Adopting this standard would rapidly cut harmful PM pollution using affordable, off-the-shelf solutions. This is a low-cost, high-impact solution that will cut pollution and save lives.

Empowering Consumers with Better Information

With zero-emission vehicles (ZEVs) representing more than a quarter of all new vehicle sales in California, a new CARB-designed EV window label could boost sales by enhancing how Californians understand their affordability benefits. An EV label showing a typical driver could save $6,000 on fuel and maintenance over the vehicle’s lifetime, for instance, would give shoppers practical, relatable information at a glance. We encourage CARB to ground its label design in empirical research and consider including information about pocketbook savings, reductions in smog-forming and soot pollution, and real-world driving ranges, charging speeds, and battery durability. A well-designed label can cut through confusion and help drivers make informed choices.

Moving Forward

California’s leadership is indispensable – for the state, for partner states, and for everyone who benefits from cleaner air, a safer climate, and meaningful cost savings. CARB’s Drive Forward program can deliver durable, flexible, and protective standards that rise to this moment and lower costs for Californians – through reduced fuel and maintenance bills and lower electricity costs. EDF looks forward to continued engagement as the rulemaking progresses.

Also posted in Cars and Pollution, News / Authors: / Comments are closed

California can cut emissions faster while lowering costs for working families

A graphic showing a downward trend line, overlaid over the Yosemite Valley.

California is leading the nation on climate action, with Governor Newsom representing the U.S. at the international climate conference and the state legislature strengthening and extending California’s landmark climate policy, Cap-and-Invest. The state government is taking ambitious action on the climate crisis from all angles and now the spotlight is on the California Air Resources Board (CARB).

As CARB works to update the design of its cap-and-invest program, new modeling shows the state can take ambitious action to cut pollution while still cutting costs for the vast majority of families. More specifically, adopting a more ambitious pollution cap now than what is currently on the table translates into easier, larger pollution cuts over the next 20 years.

By making these changes to the program now, California is investing early in the success of its climate goals. Think of it like a 401k account: the benefits of early action compound over time, paying bigger climate and economic dividends later. If the state waits to act, it’s missing out on years of progress building a safer, more affordable future for Californians.

Where the program stands

Cap-and-Invest is California’s most cost-effective tool to reduce climate-altering pollution and is an important affordability solution for Californians. The program’s binding, declining limit on pollution ensures that emissions are cut over time while prioritizing the most readily available, lowest cost opportunities to reduce pollution. At the same time, the program requires polluters to pay for their emissions — generating a crucial source of revenue that has already reduced household costs through $16 billion in utility bill credits for residential customers and over $30 billion raised for community investments.

CARB is working on updates to the program in order to make sure it is calibrated to meet the state’s climate targets, limiting pollution and driving clean energy investment.

Part of that adjustment means removing emissions allowances from the annual ‘emissions budgets’, translating to less pollution going into the atmosphere. At a workshop last month, CARB presented scenarios for reductions, noting that removing 118 million allowances from the program between now and 2030 would be the bare minimum needed to achieve our targets.

New modeling shows CARB can pursue a more ambitious path — cutting more emissions while improving affordability for working families. Read More »

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Advancing affordability through climate ambition: How states can cut costs while cutting pollution

While the federal government rapidly undermines climate progress, new analysis from EDF shows that state leadership is more important than ever. Our analysis finds that if leadership states deliver on their climate commitments, they could make a significant impact on the overall U.S. emissions and collectively cut the gap to the nation’s Paris-aligned 2035 target by a third.  

What’s more, implementing the comprehensive and powerful policy tools state leaders have at their fingertips to meet these commitments would both slash planet-warming pollution and deliver household savings and economic benefits for communities. Now is the time for governors and state legislators to get the job done.

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