How to stop worrying about gas prices for good: Act quickly to fully decarbonize the economy

By: Katelyn Roedner Sutter and Michael Colvin

This past summer, Californians have been hit hard by inflation: rising food costs, utility bills and nowhere more obviously than at the gas pump. The cost to fill up a tank has many potential causes and lots of experts are weighing in — see here, here and here. Regardless of the cause, those with the tightest budgets are being hit hardest.

Last week, Gov. Newsom called a special session of the legislature to address high gas prices, and the state began sending direct rebates to Californians to help provide some immediate relief. In the longer term, we need to remember that while sending checks is helpful, the lasting solution to ending this gas price madness is a swift transition to a 100% clean economy.

Bold climate leadership like what we have seen from the Newsom administration and the state legislature not only slashes greenhouse gas emissions, improves local air quality, addresses disproportionate environmental burdens and improves public health — it also has long-term economic benefits for California consumers.

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Affordable clean vehicle rules

Recently, California committed to ensuring that all new passenger vehicles sold by 2035 are zero-emitting. This transition to a zero-emission vehicle future will not be immediate, but the passenger vehicle market has matured to the point that an electric car is accessible to a wider market. EDF analysis shows that with the Advanced Clean Cars II standard, California will save nearly $11 billion annually by 2040 in economic and pollution benefits and $194 billion cumulatively by 2050. For individual car buyers, this means that purchasing a new 2027 electric vehicle will save them more than $9,000 over the life of the vehicle compared to a gas-powered one. By 2035, this will increase to more than $13,000. These economic savings go a long way toward easing a customer’s energy burden.

The total cost of owning an electric vehicle is noticeably less than owning a gas-powered car, and the upfront purchase price is falling, too. With the new rebates included in the Inflation Reduction Act — including up to $7,500 for a new zero-emission vehicle and up to $4,000 for a used one — 10 models of new electric vehicles could cost less than $30,000. The state of California also offers a rebate of up to $4,500, as well as additional incentives for lower-income residents and local rebates.

This is not only a California trend. New York, Washington, Oregon, Vermont, Massachusetts and Virginia are all set to adopt the Advanced Clean Cars II regulation.

Bold moves to clean up heavy-duty transportation

While ACC II applies to passenger vehicles, California is making moves on heavy-duty trucks as well. Together the Advanced Clean Trucks and Advanced Clean Fleets rules will help ensure heavy-duty vehicles sold in California are zero-emission vehicles. Under the ACT rule, 55% to 75% of new truck sales, depending on truck size, have to be zero-emission by 2035. EDF and Energy Innovation analysis estimates this rule will save truckers $6 to $7 billion through 2040 on fuel, maintenance and more, and the savings continue to accrue in following years. Furthermore, the climate and air quality benefits delivered by this rule will generate almost $9 billion in public health benefits over the same time horizon.

Like the rule with passenger cars, other states are following California’s lead. New York, New Jersey, Washington, Oregon and Massachusetts have all adopted the ACT and many others are considering the rule.

The companion to the ACT sales requirement is the Advanced Clean Fleets rule, which is a purchase requirement for medium- and heavy-duty fleets to adopt an increasing percentage of zero-emission trucks. The California Air Resources Board estimates that adoption of the ACF rule would result in a net benefit savings of $47 billion between 2024 and 2050, which includes $20 billion in savings to fleet operators.

For both passenger and commercial electric vehicles, a lot of the savings stem from the price difference between gasoline and electric charging. California has been a leader in creating dedicated electric vehicle charging rates both for passenger and commercial electric vehicles that make plugging in cleaner and more affordable than filling up at the gas station. In addition, this summer California adopted a first in the nation “submetering” set of rules to make charging at home or in a multi-family building more accessible. EDF continues to advocate to align electric charging with plentiful renewable electricity so that charging is both clean and affordable.

Ambitious climate legislation and a historic climate budget

While transportation makes up a whopping 40% of California emission inventory, our entire economy needs to decarbonize to truly move away from the overwhelming dependence on fossil fuels. The state is addressing this challenge too in a sweeping package of bills adopted by the legislature in August 2022 and subsequently signed by Gov. Newsom.

Together, with a host of other important bills, and a record-setting $54 billion climate budget, California’s actions this legislative session are estimated by the state to create 4 million new jobs, reduce the state’s oil consumption by 91%, and save $23 billion in the cost of pollution burden.

As California celebrates these important steps toward a cleaner economy the state must also continue to leverage the opportunities created by the Inflation Reduction Act to continuously increase its climate ambition. Transitioning to a fully clean economy is the most durable way to decrease our demand for fossil fuels, reduce our need for imported oil, ease the disproportionate pollution burden, and save money at the gas pump — or even ditch the gas pump altogether. Climate action saves money and saves lives.

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