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November 1, 2023                                                                                        916.553.4093

Center for Jobs Fact Checks California’s Climate Progress: US EPA Data Shows No Meaningful Drop in GHG Emissions Amid Rising Energy Costs

SACRAMENTO, CA — The California Center for Jobs and the Economy today released this special report which uses recently released US EPA data to conduct a thorough fact-check of California's climate initiatives. The findings reveal that not only has California failed to significantly outpace other states in reducing climate emissions, but it has also directly escalated costs, such as electricity, resulting in California having some of the highest national energy costs in its pursuit of climate change objectives.

“According to the US EPA data, California’s aggressive climate laws and regulations has not made them a clear leader in reducing our emissions,” said Brooke Armour, President of the California Center for Jobs. “In fact, the data shows that other states have produced actual emissions reductions by pursuing alternative and generally less costly approaches.”

The report also found that California’s transition to electricity dominance could leave it vulnerable to supply and security risks, given the concentration of critical materials in a few countries. Additionally, California’s climate goals and wildfire preparedness efforts have increased the energy costs for electricity and natural gas.

“Our research shows that the primary concern for California families and businesses is the cost of living, as Californians are hard hit by the escalating costs of electricity, gas and fuel,” said Rob Lapsley, president of the California Business Roundtable, which is a partner to the Center. “Instead of the next generation command-and-control regulations that increase costs for families and businesses, California should review this data to consider the market-based strategies of states that are actually reducing their gas emissions. We cannot continue to go down a path on next generation policies that makes us a leader in costs, but not in outcomes. Californians cannot afford for policymakers and regulators to get this wrong.”

KEY HIGHLIGHTS

"High Regulation and Good Jobs Can Go Together" – The Challenge

The state’s regulations saw their primary effect on electric power industry emissions, which dropped 14.7% (5.6 MMTCO2e) in this period as energy costs rose rapidly.  These reductions were more than offset by gains in other sectors as the economy grew, including transportation (8.7%), industry (3.4%), and commercial (7.2%).  The state’s regulations consequently worked to keep the overall rise down to 2.7%, but at a cost that likely served to dampen economic growth particularly within the traditional sectors of the economy as well.

"California is the Leader on Climate Change Action" – A Closer Look

Other states, including those without onerous climate laws and regulations, have reduced their greenhouse gas emissions at similar rates as California. When examining longer-term outcomes, California's reduction in greenhouse gas emissions is no better than that of other states. Moreover, when focusing on the period covered by California's current regulatory program, the state has actually performed worse than its counterparts.

"California is the Leader on Climate Change Action" – The Cost of California's Leadership

California's approach to climate regulation has led to some of the highest energy prices in the nation. Residential electricity rates have risen by 85.7% since 2009 in California compared to 34.0% in other states. This trend is mirrored in commercial and industrial electricity rates.

Natural gas prices in California have also experienced dramatic increases, far outstripping the national average. Similarly, fuel prices have risen more sharply in California than in other states, partly due to state-specific regulations and increased fuel taxes. California’s families and businesses will bear these increased costs.

“California has shown the world that climate action and economic growth can work hand in hand.” – California's Economic Growth Relies on Imports from Just a Few Countries

California's push for a cleaner energy transition places an increasing reliance on electricity, which is largely produced outside the state. This growing dependence could expose the state to supply and security risks, given the concentration of critical materials in a few countries.

California GHG Emissions Rise as Economy Slowly Reopened Post-COVID

As of 2021, California's total greenhouse gas emissions rose by 5.2%, primarily due to the state's economy reopening from the pandemic in mid-June. With the economy's full recovery in 2022, emissions are likely to rise further. Emissions may also increase in 2023, although telecommuting has contributed to reduced vehicle miles traveled.

               Source: Center for Jobs and the Economy

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