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California has achieved its 2020 greenhouse gas emission reduction target to combat climate change ahead of schedule, echoing the success of RGGI.

As more States move towards carbon pricing, California’s early milestone confirms a key lesson: investing carbon revenues can accelerate emission cuts and grow jobs.

For anyone who doubted that states could deliver deep reductions in greenhouse gas (GHG) emissions, California just delivered more proof that they can. The Golden State’s emissions dropped below 1990 levels in 2016, four years ahead of schedule, according to the California Air Resources Board.

Credit California’s “price-and-invest” emissions policy for a big chunk of that achievement, though not for all of it. California’s goal-beating performance echoes the achievement of nine East Coast states in the Regional Greenhouse Gas Initiative (RGGI), another price-and invest program for carbon emissions, which took effect in 2009. By 2017, the RGGI states had reduced electric sector GHG emissions so much faster than expected that they agreed to keep going another 10 years and cut emissions by another 30%.

Like California, they didn’t break the economy to clean it up.

California and the RGGI states instead showed they could boost economic growth and job creation by imposing a small price on GHG emissions and investing the money to increase energy efficiency and renewables. In effect, investing carbon revenues has enabled them to accelerate growth of clean energy supplies and jobs, not just incidentally but as a means of driving down emissions.

Significantly, it wasn’t coal to natural gas fuel switching that took California past its 2020 emissions goal in 2016: that year, the state’s emissions dropped further even as use of natural gas for power generation dropped by 15%, according to CARB. That means the state’s electric sector achieved genuine and possibly lasting reductions in GHG emissions, avoiding reliance on a debatable emissions-accounting practice. It’s true that burning natural gas yields less carbon dioxide than coal, but lots of methane leaks from pipes and wells can erode those gains. That raises serious questions about fuel switching as a strategy to cut emissions.

Former Republican California Gov. Arnold Schwarzenegger, who signed California’s landmark AB 32 climate legislation in 2006, celebrated beating the target with remarks published in the San Francisco Chronicle: “Surpassing our 2020 emissions goal ahead of schedule while our economy grows by a nation-leading 4.9 percent and our unemployment rate is at a historic low should send a message to politicians all over the country: you don’t have to reinvent the wheel—just copy us. Business will boom and lives will be saved.”

Indeed, by 2016—the year California passed its 2020 reduction target— the state’s solar industry employed more than 100,000 people. That’s about the same number working in aviation in Washington state.

All told, by 2016 California managed to cut emissions by 13% from peak levels. The RGGI states achieved even deeper cuts in covered emissions, while accelerating economic growth: power plant emissions are down 37% and participating states’ economies have grown by 25%, according to an analysis by the Acadia Center, a think tank.  By driving down demand for coal-fired power, the program also reduced power prices. Retail electricity rates in the RGGI region fell by 3.4%, while the rest of the country saw a 7.2% increase, the Acadia Center study authors found.

California and the RGGI States have set an influential precedent.  By surpassing their GHG reduction targets while growing jobs and GDP, they have provided a compelling example for other states and provinces, including Washington and Oregon.  They have demonstrated that even in North America—land of low energy prices and tax revolts—a price-and-invest policy can achieve environmental goals while increasing economic prosperity.  

Read more about this topic in Global Ocean Health’s Ocean Acidification Report.

—Brad Warren, Global Ocean Health program, NFCC

About the Author: Brad Warren focuses on the marine consequences of carbon emissions, and the design of policies to reduce them. He runs the Global Ocean Health program at the National Fisheries Conservation Center, where he is executive director.  The organization is based in Seattle.