Advancing sustainable growth in the United States and China

Adrienne Alvord

Adrienne Alvord is the Union of Concerned Scientists’ California and western states director, based in Oakland, California. Ms. Alvord is leading UCS’s effort to ensure robust implementation of the California Global Warming Solutions Act, the state’s landmark climate law known as AB 32. She also is working to ensure California’s renewable energy and clean vehicle standards are enforced.

California has been a leader in consistent state level support for clean energy. What factors led California to play this role?

In order to really understand how California has become a leader in clean energy and climate change you have to understand the historical context in which things emerged.

First, the air quality issues we have in California have been ongoing since the 1940s. Five of the worst air basins in the country are still in California. But fortunately we have a strong regulator, the Air Resources Board, which was established in 1960 to regulate emitters, including oil companies as well as the automobile industry. Having a strong regulator has been another key factor in becoming a leader in this area.

Third, we have a robust emissions inventory that has documented emissions data since 1990. In response to the impact of transportation emissions on air quality, legislation was passed in 1988 that required the California Energy Commission to create an inventory of greenhouse gas emissions. Over two decades of greenhouse gas emissions data allows us to track our progress and make informed enforcement decisions.

The final factor is public support. There is a great deal of public support for air pollution reduction and for combating carbon.

What state policy mechanisms have worked best to reduce emissions? What lessons from California state policy on energy and emissions does California hope regulators elsewhere study and adopt?

Based on the literature, direct regulation has been more influential than market mechanisms in reducing emissions. Our cap-and-trade program has been successful but we have a floor for the price of credits, and the price has not risen beyond the floor. The program was designed to require relatively modest changes over the years. However, while there is a price on carbon (I believe around 12 USD), it has not been enough to drive reductions. Regulations like requiring low-carbon fuels, designing more efficient vehicles, and promoting EVs and renewable energy have been the most effective in driving emissions reductions. There are people in the industry that want the market to work. The market is working, but it hasn’t been the driver of emissions reductions. The regulations enacted under AB 32 are designed so that 80% of carbon reductions are the result of demand-and-control regulations and 20% from cap-and-trade.

To what extent do California’s policies reinforce one another and lead to continuing innovation? For example, AB 32 channels revenues from allowance sales towards investments in clean energy?

We had a flood of money coming into California after AB 32 was passed in 2006. Venture capitalists came to California in droves. There was investment in biofuel, energy efficiency and solar. The Assembly Bill really jump started businesses to promote existing technologies. California continues to be an innovative environment for low-carbon technology today. That’s because the state made it clear that it was serious about reducing emissions.

In many regions, industry complains about the high cost of regulations to the economy. How do California leaders think about this issue with respect to energy and environmental targets and policies?

Leaders gave industry a voice. AB 32 established an advisory body called the Economic and Technology Advancement Advisory Committee (ETAAC, Section 38591 E) to give industry a voice in the discussion around California’s transition. Through this committee industry concerns and ideas are shared with the Air Resources Board. Since the passing of the law, utilities have more or less embraced renewable energy and energy efficiency in varying ways and to varying degrees of success.

What are examples of technologies that California state policy has specifically “pulled forward” by adopting policies ahead of everyone else—for example, in the case of catalytic converters in the 1970s?

What California has done is shown that renewable energy technologies like solar and wind can be scaled up. California is showing that it is possible to reduce emissions in a very large and complex economy, and still grow the economy. That is perhaps the greatest achievement of Assembly Bill 32 so far. The law has attracted billions of dollars that the State would not have had.

What regions of the state are currently hotbeds of collaboration between energy companies and universities?

All of the major universities in the state have made some level of investment in energy startup companies. Specifically, the academic community has cooperated with companies on technology innovation. UC Berkeley and UC LA and other schools in the Bay Area have probably made a disproportionate share of contributions to this collaboration and investment.