While one is a state in the US and the other a sovereign country or state made up of four ‘sub’ countries, Science and Solutions for a Changing Planet DTP student Clea Kolster suggests that the UK could learn from California’s environmental policies.
The geography and climate of the United Kingdom and California, in the United States, are notably different – California’s highest point is about three kilometres above the UK’s, there are about 200 more days of sunshine in California than there are in the UK and on average 28 centimetres less rainfall per year – but each have made the same pledge to reduce their greenhouse gas emissions by a total of 80% from 1990 levels by 2050. So how is California getting there?
Here are five ways California is leading the way, that the UK could learn from:
1) Bringing people together in their fight against climate change
First Minister of Scotland, Nicola Sturgeon, has just recently signed an agreement with Governor Brown of California to work together on the fight against climate change and meeting ever more ambitious targets and showing leadership in galvanizing the Paris Agreement. The agreement follows from the Under2 Memorandum of Understanding that now brings together 167 jurisdictions that seek to reach more ambitious targets than their overarching nations. The Under 2 Coalition originated from a bilateral partnership between California and Baden-Württemberg, a state in southwest Germany that wanted to bring together regions wanting to play a key role in greenhouse gas reduction. This is an important sign of the times that regions and states are seeing the power they have by coming together to tackle climate change.
2) Investing in low-carbon industries
California may have some inherent advantages – more days of sunlight, a huge hub of high-tech innovation for cleaner, greener, low-carbon fuels, transportation and operations – but there is no reason the UK could not take advantage of similar mechanisms and resources. At a presentation given at Stanford University (at the heart of Silicon Valley) David Hochschild, commissioner for the California Energy Commission, pointed out that as a result of California’s clean energy policies over $5 billion of venture capitalist investments have been made in California’s low-carbon technologies, or ‘cleantech’ industry.
The UK has accrued less than $1 billion investments towards cleantech focused companies, but continues to push forward. The UK is estimated to have the potential to generate over 2000 gigawatts of energy from offshore wind for example, but currently has about 14 gigawatts of installed wind capacity. If the right incentives are in place, obtaining a substantially larger portion of UK energy from renewables is feasible, but stronger transparent policies are needed to make it happen.
3) Set a minimum price for your greenhouse gas cap and trade system
California’s Air Resources Board (ARB) implemented a cap and trade system on carbon emissions in 2012 that was modelled on the 2005 European Union (EU) Emissions Trading Scheme (ETS). The California cap and trade system covers large electric power plants, large industrial plants and has been extended to include fuel distributors, which means it now covers 85% of the state’s greenhouse gas emissions. Just like most greenhouse gas emissions related policies, these are measured in metric tons of equivalent carbon dioxide (tCO2eq). The scheme applies to six major greenhouse gases including carbon dioxide, methane, nitrous oxides, hydrofluorocarbons (which were previously used for refrigeration) and more.
Similar to the EU ETS, California’s cap and trade system requires heavy emitters to hold a permit for all its equivalent emissions above a certain level (in this case sources emitting over 25,000 tCO2eq per year). Sources of this size typically include production facilities (e.g. iron and steel production), electricity generating facilities, suppliers of natural gas, CO2, and liquefied petroleum producers. Smaller, or less emitting sources can participate voluntarily. Both systems are split into several timed phases, with the California system currently in its second phase (1 January 2015–31 December 2017), and the EU ETS due to enter its fourth phase in 2020. For every phase a total number of permits are issued, in the California system fewer available for every period, however the EU ETS does not currently have such a clear limit or target set to be reached.
The California permits have a price ‘floor’ (a minimum price) that currently stands at $12/ tCO2eq, which increases by 5% annually, contrary to the EU ETS for which the carbon price is a result of market dynamics and last stood at approximately 5€/tCO2eq (equivalent to $5.4).
The UK had its own emissions trading scheme, initiated in 2002 that served as a pilot for the EU ETS and subsequently merged into the EU ETS. With the UK exiting the EU, policymakers may consider re-establishing an emissions trading scheme for the UK.
4) Regulate emissions from transport fuels
California’s Low Carbon Fuel Standards (LCFS), also implemented by ARB, were adopted in 2015, with the aim to reduce the carbon intensity (carbon emissions per kilometre travelled) of transport fuels – including gasoline, diesel and their substitutes – on a yearly basis. Ultimately the hope is to cut carbon intensity 10% by 2020. For California, with its high proportion of emissions from transport, this is a key policy despite exempting a number of fuel types such as those used for aircraft, liquefied petroleum products and ocean going vessels.
The way the LCFS works is as follows. For every year-long period a carbon intensity standard is set and fuel providers who meet the standard are awarded credits that can then be traded on a market. Fuels that fail to meet the standards mean deficits for the providers. This calculation encompasses the direct effects of producing and consuming the fuel as well as indirect effects, pertaining mostly to crop-based biofuels (effects resulting from land use for example). Clean fuel providers, such as electricity providers, hydrogen, natural gas and biogas providers, can opt-in to the programme and obtain credits.
Reducing the use of carbon intensive fuels is important for the transport sector as these contribute a large proportion of NOx emissions. This is the main contributor to city pollution, smog and acid rain with effects, which in turn has damaging effects on health (particularly respiratory diseases). California, which fosters the biggest concentration of tech companies in the Silicon Valley and is birthplace of the Tesla electric vehicle, has over 270,000 plug-in (electric cars) 50% of all the plug-in cars in the US. Buying an electric vehicle or a plug-in hybrid in California means that you receive a rebate of up to $5,000, to help balance the trade-off with cheap gasoline.
In 2008, the UK adopted a similar measure called the Renewable Transport Fuel Obligation (RTFO) that aims to ensure a certain proportion of providers’ transport fuels come from biofuels. The RTFO applies only to transport fuel suppliers providing over 450,000 litres of fuel per year (both from fossil fuel and biofuels) and on a yearly basis, each fuel supplier registered under it must prove that 4.75% of its fuel comes from biofuels. However, there are a number of ways for suppliers to get out of their obligations, for example by paying 30 pence per litre, or redeeming part of their credits from the previous year. The RTFO does not apply to non-road mobile machinery such as construction site diggers. This policy was meant to extend to include non-road mobile machinery in order to meet EU Fuel Quality Directive, but again such compliance efforts remain uncertain in light of Brexit.
5) Have a strong commitment to renewable energy
California’s Renewable Portfolio Standard (RPS), authorised by the California Public Utilities Commission, was established back in 2002 and first signed by former Governor Schwarzenegger, then the incumbent, Governor Brown. It requires that at least 50% of the state’s retail sales of electric utilities come from renewable sources of energy from 2030 onwards. Interim standards have been set – including 33% renewables by 2020 – to reach the 2030 goal and non-compliance penalties are in the process of being established. Adopting such a standard required a method to certify eligible renewable sources and a tracking and verification system for their sale. The RPS applies to both publicly and investor owned utilities and if registered retailers do not comply with the set regulations, they will incur penalties. In order to ensure that utility retailers are on track they have an obligation to report their progress on a yearly basis.
The UK also has targets for sourcing energy from renewable sources under its Renewable Obligations (RO). The overarching objective is to generate 15% of energy from renewables by 2020. This is broken down into categories by sector, aiming for 30% of electricity generation from renewables, 12% renewable heat and 10% renewable transport (which also falls under the RTFO). This aim was originally implemented by the Department of Energy and Climate Change, which was closed in 2016 and merged onto the Department for Business, Energy and Industrial Strategy. The targets originate from the EU’s 2009 Renewable Energy Directive, leaving a lot of uncertainty in terms of the direction and urgency of the obligations. According to the Select Committee on Energy and Climate Change, as it stands, the UK is on track to miss its 2020 targets. The repercussions of missing these targets is not known, but could flaw the UK’s reputation as a leader in climate change policy.
Population and GDP of UK:
World Bank Open Data
Population & GDP of California:
Bureau of Economic Analysis, U.S. Department of Commerce
UK Emissions total 1990 – 2014
UK Emissions by sector & objective 2050
UK Electricity generation from renewables 25%
UK Energy statistics 2015 & Q4 2015, Department of Energy & Climate Change, Press Notice, 31 March 2016
UK Climate Change Act 2008
UK Biofuel production 165 Million Litres
Renewable Transport Fuel Obligation statistics: period 9 2016/17, report 1
California electricity generation from renewables 26%
California Energy Commission, Tracking Progress, Renewable Energy Overview, December 22, 2016
California Global Warming Solutions Act 2006
Plug in cars California
Cleantechnica January 2017
Biofuel production in California : 290 million litres per year (77 US gallons)
Monthly Biodiesel Production Report
Venture capitalist investment in cleantech
Personal communication with David Hoschild, California Commissioner
UK yearly investment in clean energy < $1 billion
California investment in clean tech yearly > $5 billion
MIT Energy Initiative Working Paper July 2016