How California Became Far More Energy-Efficient Than the Rest of the Country

It’s not about luck. It’s about smart policy.

The Trump administration is currently attempting to stop California from setting its own pollution standards for automobiles. Trump’s Environmental Protection Agency has proposedfreezing federal fuel economy standards for 10 years (a measure so extreme that even automakers oppose it), but as things stand, California has a waiver under the Clean Air Act that allows it to opt out of federal standards and implement its own vehicle standards. Other states are also allowed to opt for California’s standards if they so choose, which 12 states and Washington, DC, have done.

If Trump sets absurdly lax standards, more states are likely to defect to California’s. So the EPA has set out to deny the state its waiver. There’s going to be a whole huge legal fight over it.

These aren’t just any standards, and this isn’t just any fight. Trump’s EPA is going after California because of the state’s long and, to this administration, dangerous history of dragging the nation forward on clean energy and energy efficiency — precisely by using ambitious performance standards.

California boosters often note that the state has become more energy-efficient than the rest of the US, which has helped keep its residents’ energy bills low even as the per-unit cost of energy increases. Skeptics have said that the state is merely taking credit for the effects of a temperate climate and copious natural resources, including hydroelectric power.

Oddly, no one seems to have run the numbers on it, to figure out whether California really is a leader or if it’s just lucky. But now, in a report for the Natural Resources Defense Council, Ralph Cavanagh, Peter Miller, and Charlie Komanoff gathered the official statistics, made the spreadsheet, and dug into the question of whether California really is doing something right.

The answer: yes. It is.

California is decreasing its energy intensity (energy consumed per unit of GDP) and its carbon intensity (carbon emissions per unit of GDP).

In fact, if the rest of the nation had improved as quickly as California has between 1975 and 2016, US greenhouse gases would be almost 25 percent lower, NRDC found.

And this improvement in performance has not come at the expense of economic growth. Instead, it’s been a huge factor in the state’s economic boom — over the past 40 years, its population and economy have grown faster than the rest of the US.

California is becoming energy-efficient faster than other states

California has always been one of the least fossil fuel-dependent states, what with its temperate climate and abundant hydro. It wouldn’t be fair to compare the level of the state’s per capita fossil fuel consumption with other states — in that respect, it’s just lucky.

But it’s fair to compare the rate of change in the state’s per capita fossil fuel consumption with that of other states, to determine where progress is fastest. That’s what NRDC’s report does.

The report compares units of fossil fuel input per unit of GDP output across states, between 1975 and 2016 (the last year comprehensive statistics were available). It finds that while the entire US economy got more energy-efficient, “California reduced its use of fossil fuels per unit of economic output by 70 percent. For the other 49 states collectively, the reduction was only 60 percent.”

It may not sound like much, 70 versus 60 percent, but that gap represents “1,200 million excess metric tons of carbon pollution in 2016 alone,” NRDC writes, “as much as the tailpipe emissions of all US passenger vehicles that year.”

Again: US carbon emissions would be almost 25 percent lower today if the nation had kept up with California.

How equipment and building standards helped California become a leader in energy efficiency

Why has California moved faster?

The answer traces back to the 1970s energy crisis, which hit the state particularly hard. During Gov. Ronald Reagan’s tenure in the early ’70s, the state legislature commissioned a study of how to deal with surging energy demand in the state without covering its coastline in large power plants. Among other things, that study produced the Warren–Alquist Act, which in turn created the California Energy Commission (CEC), empowered to create energy efficiency standards for equipment and buildings.

By 1978, the state had new standards on both. They were developed painstakingly, in consultation with engineers and experts, with a system that both codified current best practices and offered financial incentives to those who exceeded the standards (thus drawing new technologies into market, allowing standards to be tightened).

Best of all, the standards ratchet up automatically. In my interview with policy analyst Hal Harvey, he explained why that’s so important:

[California’s building code] gets tighter every three years. It only took one law, in the 1970s, to make that happen. That bill, [which established] Title 24 [in the state building code], was signed when Jerry Brown was the youngest governor in California’s history. He’s now the oldest governor in California’s history. In between, Republicans and Democrats alike saw the building code get stronger and stronger. It didn’t require cashing in political capital, going back to the legislature, debating it — it just happens.”

The standards have proven, by any possible measure, a triumph.

“It is difficult to overstate the impact and value of these standards,” NRDC writes. “Because of them — both the initial iterations and periodic upgrades — households got a break on their electric bills, the California landscape avoided dozens of new generating stations, and thousands of tons of harmful particulate emissions and smog were prevented.”

Performance standards are policy magic

California went on to pioneer performance standards on a whole range of appliances, equipment, vehicles, and structures.

Their success has been undeniable. Consider the case of refrigerators. (This case has become legend among energy efficiency nerds and they talk about it all the time, but with good reason — it’s impressive!)

Look what performance standards have done for refrigerators:


The volume of new refrigerators has increased, their price has fallen, and their energy use has plunged by a remarkable 85 percent.

Similar gains have been achieved in TVs, computers, dishwashers, air conditioners, lightbulbs, and all sorts of other equipment.

And here’s the magic of the state’s performance standards. They have proven effective, economical, and popular, so they spread. And they put manufacturers in a bind, forced to create two sets of products for two different standards. So if enough states join California in a standard, manufacturers will tend to push to make it national, just for consistency and predictability. (That’s how Obama got a boost in federal fuel economy standards, which Trump is now trying to undo.)

So California’s standards tend to be adopted nationally. (The guy who first signed federal efficiency standards into law? President Ronald Reagan.) That means California’s impact extends beyond its borders.

Performance standards, unlike so many other climate policies, can reliably be passed and reliably work. The CEC is required by law to track the savings its programs produce. Here’s the electricity saved so far:

Every one of those 70 terawatt-hours of electricity otherwise would have had to come from a power plant. The state’s efficiency initiatives represent financial savings, a reduction in pollution, and a boost in economic performance. The entire country has enjoyed something similar — just not quite as much as it could have.

California’s success wasn’t all performance standards, of course. (They’re just my favorite.) The state has also invested in R&D, created incentive programs to help new technologies make the leap from lab to market, reformed utilities to align them with efficiency and clean energy, and invested in electrifying transportation. It has consistently moved out ahead of national markets and pulled them along behind it.

Of course, efficiency is only one half of per capita fossil fuel use. The other half is how much carbon-free energy is in the mix.

California has also pioneered clean electricity

If California is sprinting ahead on efficiency, on clean electricity, it’s running fast just to keep up.

From 1975 to 2016, in absolute terms, the amount of fossil fuel burned for electricity in the state rose by 56 percent. (It grew by almost 85 percent in the rest of the US.) However, over that same time period, the population of the state grew by 82 percent, so its per capita fossil fuel use actually fell by 14 percent. (In the rest of the country, it grew by 25 percent.)

Fossil fuel electricity per unit of GDP fell by 38 percent in the rest of the US, while in California it dropped by 62 percent. If the whole nation had moved at California’s pace, “the U.S. economy today would be consuming nearly one trillion fewer kilowatt-hours a year from coal, oil, and gas.”

Part of this drop in per capita fossil fuel consumption is the efficiency, but part of it is also California’s aggressive leadership on clean energy, which also dates back to the 1970s. In 2002 it passed one of the nation’s first renewable energy standards and last year raised that target all the way to 100 percent clean electricity by 2045. “The state has consistently achieved its renewable energy goals ahead of schedule and below cost estimates,” NRDC writes.

Here’s a good way to visualize the changes in California’s electricity supply.


As you can see, renewables (which here includes hydro) have shown strong growth — more growth than in-state fossil fuels and imports combined — but efficiency has supplied more new “negawatts” than all the other sources put together.

California’s problem: cars, cars, cars

As I’ve written before, the next big challenge for California energy policy is cars. If the state has leaped ahead on efficiency and kept pace on clean electricity, it has, like the rest of the country, fallen behind on cars.

Its gasoline consumption and vehicle miles traveled (VMT) have risen even faster than the rest of the country’s. Its per capita VMT has also risen by almost 50 percent. The one area where it’s doing a little better: per capita gasoline consumption, which fell by 20 percent, due to, among other things, the growth in hybrid and zero-emission vehicles.


As the report notes, there are many reasons for the lack of progress. Federal home financing policies tend to encourage sprawl. Land use policy is largely in the hands of cities and localities, not the state, and there is often resistance to densification at the local level. And over the years, environmental groups have tended to focus on more efficient or cleaner engines for vehicles rather than land use.

As the troubled story of SB 50, the state’s landmark housing bill (still on hold), reveals, extending California’s energy leadership into the area of land use, housing, and VMT reduction is going to be a fraught business, full of social and political challenges that never faced refrigerator standards.

One tool that is in California’s hands? Its waiver from the Clean Air Act, which allows it to impose pollution standards on vehicles. It could tighten those standards, potentially quite radically, in pursuit of tackling its biggest remaining fossil fuel problem.

If it did so, it would once again drag the rest of the nation along behind it, as it has so many times before.

Trump’s fossil fuel backers want to stop California

Trump has a million reasons to hate California and want to mess with it. It represents everything he has campaigned and governed against. But in this case, his hatred aligns with interests of the fossil fuel executives he hangs out with.

That’s the backdrop for the fight over fuel economy standards. Trump’s EPA doesn’t just want to block a particular set of standards; it wants to permanently disable California’s ability to get out in front of the rest of the nation on vehicle standards.

It knows that California — the world’s fifth-largest economy, were it a country — can shift whole markets, recruit other states, and eventually influence national policy. It has done so before.


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