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Lower cost, slower gains: California prepares controversial new climate strategy

Craig Miller

A climate change roadmap to be proposed in May aims to minimize costs while reaching carbon neutrality by 2045. Environmentalists say it’s too slow and reliant on carbon markets and capture technologies.

California air-quality officials have endorsed an updated blueprint for battling climate change, choosing a plan that aims to minimize job losses and costs while slashing greenhouse gases and achieving carbon neutrality by 2045.

California has long been a global leader in addressing the climate crisis, enacting aggressive laws and policies to reduce its carbon footprint. But the state has recently come under fire from activists and some legislators for failing to act quickly enough and relying too much on carbon-trading programs.

The strategy that the staff of the state Air Resources Board plans to unveil in May requires a massive shift away from California’s reliance on fossil fuels and more emphasis on renewable energy sources. The plan, which aims for an 80% reduction of greenhouse gases below 1990 levels by 2050, would cost an estimated $18 billion in 2035 and $27 billion in 2045.

California’s climate change roadmap – called a scoping plan — was first adopted in 2008 and updated in 2013 and 2017. The air board is in the initial phases of its update. A public hearing is scheduled for June, while the board is expected to vote this fall.

The board’s staff last year released four options for discussion. At a workshop last week, air board officials said they will present the board with the option that has the least impact on the state’s economy rather than accelerating the pace of achieving carbon neutrality. 

Two of the rejected scenarios would reach carbon neutrality ten years earlier, by 2035, but would cost six to seven times more — between $106 billion and $120 billion in 2035. (Carbon neutrality means the state removes as much planet-warming carbon from the atmosphere as it emits.)

Air board staff said their preferred option, known as Scenario 3, focuses on countering job losses in industries and promoting job growth as the state transitions to renewable energy. Scenarios 1 and 2 had the largest impacts on jobs and the most health benefits for people in heavily polluted areas. Scenario 4 had the least health benefits to communities and the third highest impact on cost and job loss.

“The faster you phase out of combustion you absolutely get huge health benefits and climate benefits – we all know that,” Rajinder Sahota, the board’s deputy executive officer of climate change and research, said during last week’s workshop with industry representatives and environmentalists. “But the longer timeframe gives us more time to
actually build that infrastructure and build those energy sources.”

The preferred option has been criticized by both environmental justice advocates and the oil and gas industry.

“We’re gambling with the fate of humanity,” said Kyle Heiskala, a policy advocate at the San Diego-based Environmental Health Coalition. “There’s so much at stake here. We don’t have a lot of time to get this right. We need to start making reductions in climate emissions now.”

The oil industry counters that the air board’s plan is too reliant on the state’s zero-emission vehicle mandates and should focus more on measures that trade, remove and store carbon while still allowing continued use of fossil fuels.

The scoping plan update comes as the extreme effects of climate change continue to devastate the state, which has been pummeled by extreme heat, record-shattering wildfires and a worsening drought. Planet-warming emissions are creating dire consequencesthat scientists say will be irreversible if the world — including California — fails to meet ambitious carbon-reduction goals.

California is responsible for less than 1% of greenhouse gases emitted globally, but it has the fifth largest economy, so it’s in a position to help drive substantial change.

How much the California Air Resources Board should prioritize each strategy for reducing greenhouse gases remains a key tension point for environmental activists and industry leaders.

The staff’s preferred Scenario 3 relies more on carbon capture technologies than a more expensive option, estimated to cost $130 billion by 2035, that instead includes a near-complete phaseout of gasoline-powered vehicles. Officials said their chosen scenario will rely on carbon capture, but not as much as two other scenarios that cost more.

Carbon capture is the practice of collecting carbon dioxide emitted by smokestacks and injecting it into the ground for long-term storage so that it does not warm the planet.

Carbon dioxide, methane and other greenhouse gases trap heat in the atmosphere, triggering changes in temperatures, precipitation and other aspects of climate. The changing climate as well as other pollutants emitted by fossil fuels disproportionately affect low-income communities of color, according to a report from the University of Southern California. In California, thetransportation sector accounts for about 40% of greenhouse gas emissions.

Each scenario includes measures to mandate zero-emission vehicles, encourage use of renewable biofuels and beef up investments in technologies to capture carbon and remove it from the atmosphere. Each also weighs how the phaseout of fossil fuels could affect job losses and health outcomes of residents living next to major polluters.

A chart shows the various scenarios for addressing climate change in California

Environmental justice advocates wanted the board’s staff to recommend a scenario that included a complete phaseout of fossil fuels by 2045 without reliance on carbon capture and storage. That scenario should have included measures to end oil and gas extraction by 2035 and phase out oil refining by 2045. Instead, they say the agency’s chosen strategy is not prioritizing direct emission reductions.

A debate over California’s landmark carbon market — called cap and trade — continues to spark controversy as the state formulates its scoping plan. Adopted in 2013, the cap and trade system puts a price on pollution. The market allows companies to buy some credits, known as allowances, rather than meet its limits by emitting less pollutants from facilities such as oil refineries.

For years, environmental advocates have argued that relying on carbon markets and engineered carbon-removal solutions allows the fossil fuel industry to buy its way out of emitting less pollution.

Heiskala said by allowing emissions to continue at oil refineries and other sources of pollution, the air board’s plan sets the state back in achieving its goals and harms residents living in heavily polluted areas.

“It’s just backwards,” he said. “The world is looking to California. If this plan is adopted and it has all of this reliance on carbon capture and carbon dioxide removal, the world is going to see that it’s a viable strategy and it effectively just delays action on climate change even further by decades. We just don’t have that kind of time.”

The 2017 scoping plan projected that cap and trade would account for 38% of the state’s emissions reductions. Air board officials have repeatedly said this year’s updated plan will scale back the role of cap and trade. However, it is unclear the weight that cap and trade will have in the new plan.

Kevin Slagle, a spokesperson with the Western States Petroleum Association, an industry lobbying group, said oil and gas companies support the state’s move toward renewable energy sources. But he said a too-hasty transition could jeopardize the economy and residents who depend on the fossil fuel industry for jobs.

Instead, he said the air board should abandon all four options and develop a new one that relies more heavily on the carbon market, including cap and trade, to achieve carbon neutrality in the “most cost-effective manner.”

“We don’t think the scenarios right now are wide enough. They’re not looking at enough possible ways to reach our goals,” he said. “There’s a lot of significant issues that have to be studied and understood before you can really just bet on an all-electric future.”

About 152,000 Californians work in the oil and gas industry and an additional 366,000 others have careers whose jobs depend on the industry, according to a 2019 reportfrom the Los Angeles County Economic Development Corporation. The industry in California contributes $152 billion yearly to the economy, the report shows.

Air board officials project that the job losses would have a minimal impact on the state’s economy — about 80,000 fewer jobs in the fossil fuel industry in 2035 and 120,000 fewer in 2045. The state’s employment sector is still likely to grow from 23.5 million jobs in 2021 to 27.7 million jobs in 2045.

Daniel Sperling, a member of the Air Resources Board and founding director of the UC
Davis Institute of Transportation Studies, said the oil industry can avoid economic losses by transitioning to cleaner technologies and sources such as hydrogen, biofuels and carbon capture.

“They are a powerful economic force. They employ many people. They play a big role in California’s economy. That’s our challenge – to guide the industry in the least disruptive way to a low carbon future,” he said.

Catherine Garoupa White, a member of the state’s Environmental Justice Advisory Committee, which advises the board on the scoping plan, said the Air Resources Board “is so focused on economics that they’re just basically willing to continue to sacrifice environmental justice communities.”

Despite the pushback from environmentalists, Sperling said the proposed scenario is still a “very aggressive” strategy to reduce emissions.

“There’s never going to be a scenario that makes everyone happy,” he said. “At the end of the day, the scoping plan is just a plan – it’s not codifying any rules or any new laws. We need to move on to start thinking about exactly what actions we shall take in terms of incentives and regulations.”

Copyright 2022, CalMatters