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CALIFORNIA’S NEW CLIMATE

AMBITIONCHRIS BUSCH

OCTOBER 2 016

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1.California’s new 2030 emissions cap 2.How we got here: A decade of progress3.The path forward to 260 MMT (40%

reduction)

OUTLINE

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SENATE BILL 32SIGNED SEPTEMBER 8 T H , 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

progress3.The path forward to 260 MMT (40%

reduction)

OUTLINE

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A DECADE OF PROGRESSGOV. SCHWARZENEGGER SIGNS ASSEMBLY BILL 32 (2006)

UCANR

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A DECADE OF PROGRESSTHE 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 PROGRESSLOOKING 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 PROGRESSSURGING RENEWABLE ENERGY PRODUCTION – UTILITY SCALE

“Tracking Progress,” California Energy Commission

Renewable Portfolio Standard

progress:

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A DECADE OF PROGRESSSURGING 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 VEHICLESEXPONENTIAL GROWTH

Next 10, “Green Innovation Index”

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Click icon to add picture

1.California’s new 2030 emissions cap 2.How we got here: A decade of progress3.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 AHEADTRANSPORTATION 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 wil l be flexible

California Air Resources Board, “Mobile Source Strategy”

21California 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 UNCERTAINTYCAP 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-TRADEBEST IF ABATEMENT SUPPLY CURVE IS ELASTIC

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CARBON TAXBEST IS ABATEMENT SUPPLY CURVE IS INELASTIC

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THANK YOU

CHRIS BUSCHCHRISB@ENERGYINNOVATION.ORG

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@CHRISBBUSCH@ENERGYINNOVLLC