On September 8th, 2016 California Governor Jerry Brown signed into law Senate Bill 32 and Assembly Bill 197, establishing a new target to reduce greenhouse gas emissions 40 percent below 1990 levels by 2030. Since the signing of Assembly Bill 32 a decade ago, California has proven to the world the feasibility of reducing emissions while simultaneously increasing jobs and growing the economy. The establishment of new laws clearly demonstrates California’s continued ambition to decarbonize its economy - now the state must determine the best policy path forward to meet its bold new climate target.

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CALIFORNIA’S
NEW CLIMATE
AMBITION
CHRIS BUSCH
O C TO B E R 2 0 1 6
(CC) BY-NC

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1. California’s new 2030 emissions cap
2. How we got here: A decade of progress
3. The path forward to 260 MMT (40% reduction)
OUTLINE

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SENATE BILL 32
SIGNED SEPTEMBER 8TH, 2016
Liz O. Baylen / Los Angeles Times

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SB 32 GOAL
40% below 1990
levels by 2030

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1. California’s new 2030 emissions cap
2. How we got here: A decade of progress
3. The path forward to 260 MMT (40% reduction)
OUTLINE

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A DECADE OF PROGRESS
GOV. SCHWARZENEGGER SIGNS ASSEMBLY BILL 32 (2006)
UCANR

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A DECADE OF PROGRESS
THE VIEW FROM 2006
 AB 32 seemed
ambitious
 ~30% reduction
below BAU
 Allowance price
forecasts of
$20-100 per ton
 Robert Stavins
writes “Too
Good to Be True”
UC Berkeley
- 30%
reduction

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A DECADE OF PROGRESS
LOOKING BACK, THE FIRST 10% EASIER THAN EXPECTED
 CO2e emissions fell 9.5%
from 2004–2014
 Positive economic trends
 GDP nearly doubles
 In-state job growth

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75% OF U.S. CLEAN TECH INVESTMENT IN 2015
*Investment includes Venture Capital, debt, grants, private and public equity, and follow-on public offerings.

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PATENTS ARE INDICATOR OF INNOVATION

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A DECADE OF PROGRESS
SURGING RENEWABLE ENERGY PRODUCTION – UTILITY SCALE
“Tracking Progress,” California Energy Commission
Renewable Portfolio
Standard progress:

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A DECADE OF PROGRESS
SURGING RENEWABLE ENERGY PRODUCTION – DISTRIBUTED
Sources: (1) Next 10, “Green Innovation Index” (2) “Tracking Progress,” California Energy Commission
DG

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TRENDS IN ZERO EMISSION VEHICLES
EXPONENTIAL GROWTH
Next 10, “Green Innovation Index”

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1. California’s new 2030 emissions cap
2. How we got here: A decade of progress
3. The path forward to 260 MMT (40% reduction)
OUTLINE

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FEASIBILITY OF THE 2030 GOAL
Jeffrey Greenblatt. 2015. “Modeling California policy impacts on greenhouse gas
emissions,” Energy Policy v. 78, pp. 158-172.
 Work at Lawrence
Berkeley National
Laboratory identifies
policies to meet the goal
(Shown at right)
 Work at U.C. Berkeley
shows policies to meet
target could create
340,000 jobs in 2030.
(David Roland-Holst,
2015, Pathways for
Sustained Prosperity)

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FEASIBILITY OF THE 2030 GOAL
Falls slightly
short of 40%
reductions
Energy+Environmental Economics, Inc. 2015. CA State Agencies'
PATHWAYS Project: Long-term GHG Reduction Scenarios

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FEASIBILITY OF THE 2030 GOAL
Smart growth can
capture “the missing 2%”

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THE ROAD AHEAD
TRANSPORTATION THE BIGGEST CHALLENGE
California Air Resources Board

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CALIFORNIA’S CLIMATE STRATEGY
California Air Resources Board, “Mobile Source Strategy”

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GOALS FOR
MOBILE SOURCE
STRATEGY
 Example outcomes
 Policy will be
flexible
California Air Resources Board, “Mobile Source Strategy”

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California Air Resources Board, “Mobile Source Strategy”

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CARBON MARKETS AND CALIFORNIA'S
PORTFOLIO APPROACH
9/16 price: $12.95

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THE ROLE OF UNCERTAINTY
CAP VS. TAX: WHY A HYBRID IS THE BEST OPTION
Cannot predict with
high confidence the
shape of abatement
supply many years
into the future

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CAP-AND-TRADE
BEST IF ABATEMENT SUPPLY CURVE IS ELASTIC

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CARBON TAX
BEST IS ABATEMENT SUPPLY CURVE IS INELASTIC

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THANK YOU
CHRIS BUSCH
CHRISB@ENERGYINNOVATION.ORG
(CC) BY-NC
@CHRISBBUSCH
@ENERGYINNOVLLC