Power Emissions Down in California; Regulation Accounts for Some

(CN) – California officials are quick to tout the Golden State’s action on climate change and evidence points to dramatic reductions in emissions in the past decade, but a report issued Monday casts doubt on whether the state’s policies are primarily responsible.

“It’s kind of unclear how much the suite of state policies contributed to the decline in greenhouse gas emissions,” said Ross Brown, an energy policy analyst with the Legislative Analyst’s Office. “They were a substantial driver but it’s hard to put a number on it.”

The Legislative Analyst’s Office, a nonpartisan agency that provides policy advice to the Legislature, analyzed key California policies regarding climate change and electricity generation. It found that over the past decade, California saw a 40% reduction in greenhouse gas emissions, the heat-trapping particles that are the chief culprits in steadily rising surface temperatures on planet Earth.

California has passed a slew of climate change laws that specifically address electricity generation since 2000. The legislative analyst examined some of the major laws including the Renewable Portfolio Standard, which requires electricity providers to derive at least 60% of their energy from renewable sources by 2030.

The legislative analyst also looked at the California Solar Initiative, which offered $2.7 billion in incentives for homeowners to install solar panels on their rooftops; the Emissions Performance Standard, which prohibits electricity providers from signing long-term contracts with coal-fired power plants; and the state’s cap-and-trade program, which allows businesses to buy allowances for carbon emissions and then pay for emissions that exceed the baseline.

Mandating renewables has likely had the most impact on reductions, the analyst said, though the office was less bullish on the solar rooftop initiative.

“Promoting rooftop solar is more expensive than delivering solar at a utility-scale,” Brown said.

However, the legislative analyst acknowledged the examination is incomplete due to the lack of studies that incorporate savings on transmission costs. Transmission is also one of the big mysteries of the renewable portfolio cost-benefit analysis and contributes toward the cloudy picture.

Brown said one solution would be for legislators to require state agencies to develop a method for gathering data and analyzing if a given law is actually working.

“There is a broad suite of economic factors that likely play a role,” Brown said. “It’s why you might try to evaluate some of these factors before passing a law and set up a program to collect the type of data you need.”

Declining natural gas prices may have done more to reduce emissions than any state law, according to the report. The shale gas boom in the United States, some of which has occurred in California, has made the fossil fuel a more economic electricity generator than the far dirtier coal.

Natural gas accounted for about 32% of all electricity generated in California in 2018. By comparison, coal accounted for around 3%, all of which was imported from out of state.

Solar power contributed a little more than 10%, much of which was produced in California. Wind also accounted for approximately 10%, although with a lesser share of locally produced power.

Those trends toward renewable energy could grow even further as costs for solar panels and the power they generate fall, according to the report.

“Procurement costs for renewable energy are likely to be much lower in the future due to declining renewable prices,” the report says.

As always, analysts have a difficult time determining which factors are due explicitly to regulation and which are more of a reflection of market forces, although Brown does acknowledge that falling renewable prices across the globe could be in part because supply increased after the passage of such laws.

Cap-and-trade attempts to use market forces to curtail emissions, making companies pay a premium for the amount of carbon they emit. Brown said this approach was by far the most cost-effective of the four major policies the office analyzed, but it is again difficult to say how much the program by itself contributed to fewer emissions.

“The design of it is more cost-effective but it hasn’t been asked specifically to reduce emissions,” Brown said.

Critics of cap-and-trade programs say they allow a baseline of carbon emissions and then let well-heeled corporations pay to pollute. But backers say providing a market incentive to avoid fossil fuels is more likely to reduce emissions in the long term without major disruptions to the electricity market that could spike costs to ratepayers.

The analysis focused only on electricity generation, which has been one of the more successful areas of California’s efforts to reduce emissions.

Last year, the legislative analyst looked at the effect of climate change policies on the arena of transportation.

Transportation is the largest contributor to emissions in the state and unlike in the arena of electricity, emissions continue to steadily climb in the sector as more light-duty vehicles – passenger cars and trucks – contribute to the accumulation of greenhouse gases in the atmosphere.

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