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California’s Road to Carbon Neutrality Runs Through the State’s Buildings

September 16, 2018


At a Global Climate Action Summit side event, a high-level panel grappled with solutions for building decarbonization in California.

California must build housing closer to transit and jobs, and wring carbon from new and existing buildings, if the state is to meet its ambitious climate targets.

That was the message delivered by a high-level panel at a Global Climate Action Summit side event convened in San Francisco on Wednesday by Climate Resolve, a Los Angeles-based nonprofit.

Top of mind for the panel was California Governor Jerry Brown’s signatures earlier in the week on SB 100, requiring the state to achieve 100 percent carbon-free electricity, and an executive order establishing a carbon neutrality target, both by 2045. The message for California policymakers is clear: Carbon reduction is the end goal.

“We’re focused on carbon,” said Andrew McAllister, commissioner with the California Energy Commission. “We’re trying to shift the state apparatus to not focus necessarily on energy but on the carbon that’s embedded in energy.”

He went on: “For a long time, we focused on energy. We thought, ‘Clean energy, that’s what we need.’ But energy and carbon are not the same thing.” California had previously established targets for zero-net-energy new construction: 2020 for residential buildings and 2030 for commercial buildings.

But, McAllister noted, “Zero net energy is not zero carbon. If we’re going to get to a zero-carbon economy, we have to not only decarbonize our buildings, but we have to look for sinks.” That effort, he said, will reach across sectors, requiring coordination between dozens of state agencies.

A net-zero-carbon community

What does that push for decarbonization look like on the ground? Perhaps something like Newhall Ranch, a project being developed by the Orange County, California-based developer FivePoint. The company builds mixed-use, master-planned communities in California.

“We are witnessing a major pivot here in the state of California,” said FivePoint CEO Emile Haddad. Evidence of that pivot, he said, was the presence of a major developer on stage at an event focused on identifying zero-carbon pathways for California.

Newhall Ranch is a massive a greenfield development located in Valencia, California. When completed, the project will include 21,500 homes and 11.5 million square feet of commercial space. The project was originally approved in 2003, but was tied up in California Environmental Quality Act litigation for 14 years, until FivePoint reached a settlement with environmental groups and tribal representatives in September of last year.

Deep into the process, Haddad recalled, he asked his fellow executives at FivePoint, “Can we build the first community in the world that actually is net-zero [carbon]” at Newhall Ranch?

According to Haddad, FivePoint concluded that the technology was not yet available to be able to build a net-zero carbon community. The company therefore decided to pursue measures to reduce carbon emissions in and outside Newhall Ranch.

Onsite measures include the installation of rooftop and neighborhood solar arrays and deployment of EV charging stations at individual homes and throughout the community. Outside Newhall Ranch, FivePoint will pay to install EV chargers elsewhere in California, retrofit schools in Los Angeles County, capture methane at California dairy farms, and distribute 100,000 clean-burning cookstoves in Africa.

The Climate Action Reserve, a Los Angeles-based carbon offset registry, will validate the integrity of the project’s carbon mitigation measures.

What about natural-gas infrastructure?

During the Q&A, Commissioner McAllister raised a looming issue for the state’s political leaders: What to do about California’s natural gas infrastructure? It’s “a very transformational conversation that has to happen,” he said.

He continued, “We have to have the conversation to figure out what happens to that infrastructure — how it goes away, what it turns into. What little pockets of it might be left. But, whatever is left, it has to be fossil-free. If we’re decarbonizing, we cannot use fossil natural gas.”

“There’s big business challenges,” he conceded, “and it’s an existential threat for some utilities in the state.” Nevertheless, he said, the conversation needs to happen. Among the many difficult issues to be resolved is how to allocate stranded costs for retired gas infrastructure.

Could there be a future for renewable natural gas? “Part of that conversation is figuring out what the limits of RNG actually are,” said McAllister. “I’m not trying to put anybody out of business. I’m just counting molecules. And those molecules have to be non-fossil molecules.”

Greentech Media asked FivePoint’s Haddad if the developer had considered not building natural-gas infrastructure at Newhall Ranch or its other projects in California. At least for the Newhall Ranch project, he said, “We did not look at building something that is not gas.”

The “most difficult nut to crack”

For new buildings, the zero-carbon pathway is much clearer. Harvesting deep carbon reductions from existing buildings will be much harder.

“The existing building stock is the most difficult nut to crack,” said McAllister. “Many if not most of the buildings that are going to be here in 2045, 2050 are already here today.”

He added that many of those homes are owned by people without the means to invest in energy-saving upgrades. One-third of the state’s consumers, he said, are on discounted electricity and natural-gas rates available to low-income households.

More policy guidance is on the way. On Thursday night, Governor Brown signed a package of climate-related bills. Among them were three bills supporting building decarbonization. AB 3232 directs the California Energy Commission to assess the potential for California to reduce greenhouse gas emissions from residential and commercial buildings by 40 percent by 2030; SB 1477 will establish an incentive program for low-carbon space and water heating equipment; and AB 2195 directs the California Air Resources Board to track GHG emissions from natural gas leakage and venting during the production, processing and transporting of natural gas imported into California.

Both FivePoint’s Haddad and Southern California Edison President Ron Nichols cautioned the state against resorting to mandates in pursuit of its climate goals. At Newhall Ranch, Haddad said, FivePoint installed solar not because it had to, but because it chose to.

“I don’t think we need to do it with mandates; we need to do it with enablements,” said Nichols. “We have to change our building standards to enable using highly efficient electric water heaters. We have to use more electricity for space heating in the state.”

Nichols cited an SCE white paper, released last fall, which found that around one-third of residential and commercial buildings will need low-carbon electric water and space heating for California to achieve its 2030 climate goals.

Homes without garages, linking housing and climate

Emile Haddad also said regulators will have to nudge Americans away from cars.

“Everything we do in this country, when it comes to development, is defined by the car. Our zoning codes are all defined by the car,” he said.

He added, “A crazy idea would be: Why don’t we start doing what Europe does in some places and say ‘No garages.’”

FivePoint will do just that at a pilot project in Irvine, California, where, Haddad said, 60 single-family detached homes will be built without garages. Instead, homeowners will have access to a fleet of on-demand vehicles.

Kate White, deputy secretary, environmental policy and housing coordination at the California State Transportation Agency, stressed the interplay between housing and climate as the state pursues its climate objectives.

“Housing and climate are absolutely, essentially combined,” she said. “We cannot meet our climate goals without solving our housing crisis.”

She continued, “If we care about the climate, we all need to be YIMBYs. If we care about the climate, we all need to support transit-oriented development in our neighborhoods. If we care about the climate, we need to build carbon-neutral communities.”

When asked for one message she would offer the next governor, her answer was succinct: “Streamline approvals of zero-carbon communities.”

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