Suggested Citation:
Collantes, Gustavo O., Anthony R. Eggert, Rod Brown, Susan L. Handy, Jeff Kessler, Chuck Shulock, Julie Witcover, Sonia Yeh (2015) Achieving California’s Greenhouse Gas Goals: A Focus on Transportation. Institute of Transportation Studies, University of California, Davis, Research Report UCD-ITS-RR-15-14

The California legislature, in passing Assembly Bill 32 (“AB 32”) or the California Global Warming Solutions Act of 2006, required the state to reduce its greenhouse gas emissions to 1990 levels by the year 2020. As part of AB 32, the Air Resources Board was required to develop a Scoping Plan describing the measures to meet the goals, in consultation with other state agencies. This report focuses on the core suite of policies adopted by the State of California to reduce greenhouse gas emissions from transportation as part of the AB 32 Scoping Plan. This suite includes:

• The Pavley regulations, as integrated in the National Program (Chapter 2);
• The Zero Emission Vehicle regulation (Chapter 3);
• The Sustainable Communities and Climate Change Act, or SB 375 (Chapter 4);
• The Low Carbon Fuel Standard (Chapter 5); and
• The Fuels in the Cap component of the Cap and Trade program (Chapter 6).

While discussed in separate chapters, these policies should be thought of as an interconnected suite. The carbon benefit of each will depend not only on its own design and implementation, but also on the design and implementation of the others.

Nearly ten years after AB 32 was passed, the state is considering the steps beyond 2020 for California. In his fourth inaugural address, Governor Jerry Brown called upon the state to reduce its petroleum use by up to 50 percent by 2030. The subsequent Executive Order B-30-15 establishes a statewide greenhouse gas reduction target of 40 percent below 1990 levels by 2030.

Our intention is to assess the current transportation policies and programs included in AB 32 on a variety of dimensions, such as cost effectiveness, potential for carbon emissions abatement, technological feasibility, and others. For these assessments we predominantly rely on a critical examination of published research, analysis and policy documents. Each chapter draws on the expertise of UC Davis researchers with deep understanding of the particular topic.

Each chapter begins with a list of summary findings specific to a particular policy. We list below a few selected general findings from our assessment:

• A future transportation system that achieves deep reductions in greenhouse gas emissions consistent with the state’s 2050 climate goals is technically achievable.
• While this future system could provide mobility at a cost lower than the current system and with significant social benefits, there are real transition costs and other non-market barriers that must be overcome.
• California has adopted a suite of ambitious policies to reduce carbon emissions from the transportation sector and, in doing so, the state is providing experience and lessons for other jurisdictions that are interested in pursuing similar policies.
• California has the resources to undertake the challenging process of policy innovation, development, implementation, testing and refinement that might be difficult for other states with more limited resources.
• Although most of these policies are in their early stage of implementation and they are generally on track to meet their respective and combined goals, continuous progress evaluation is important.
• The suite of policies is directed predominantly to the supply side of the transportation system. As such, it is heavily dependent on technology innovation and consumer acceptance of innovations on vehicle technologies, fuel characteristics, and different land use patterns. The cap and trade program will generate a price signal that may help induce users’ behavioral adjustments. The strength of such price signal is relatively uncertain, due to the complex interactions between cap and trade and other policies.
• There is a strong need for data collection, analysis and continued research and development to improve on technologies and policies designed to achieve climate goals. Building this informational foundation will help reduce uncertainty, improve the efficacy of public policy and business strategy, and reduce wasted resources.
• California is leading the nation in market adoption of plug-in electric vehicles, both in absolute numbers with more than 100,000 vehicles on state roads, as well as percentage of new vehicle sales. Building upon the ZEV regulation, the state has increasingly recognized and worked toward partnerships with industry and other stakeholders to foster ZEV markets. The clear direction provided by Governor Brown and the establishment of the Plug-in Electric Vehicle Collaborative, are instrumental to help key stakeholder organizations to work collaboratively toward the same goal.
• While uncertainty is a natural part of policy, there exist opportunities to reduce the uncertainty associated with the emissions reductions from certain policies. Sources of uncertainty include the extent to which these policies can affect the overall level of demand for travel, vehicles and fuels, the difference between the estimated emissions from life-cycle analysis and testing compared to the real world emissions, and the level of resource-shuffling or movement of activity to jurisdictions that are not covered by the policy. Furthermore some policies, such as SB 375, rely heavily upon incentives and voluntary implementation at the level of the local jurisdiction. Some of this uncertainly can be addressed through further analysis and policy refinement, but other sources are best addressed by expanding the coverage of the policies beyond California.
• The expansion of cap and trade program to include transportation fuels, meant to ensure the largest source of state emissions is captured under the cap, induces a price signal on the carbon content of fuel. Carbon pricing will not only moderate carbon consumption, it can also help finance the implementation of 6 climate policies and programs. This funding mechanism could be critical particularly for local and regional governments that struggle to find sources of revenue.
• More research is needed to help policymakers understand opportunities to refine these policies to increase certainty and efficiency. As an example, research would help understand the ways in which the transportation fuels element of the cap and trade program will interact with other transportation climate policies.
• Broadly, the cap and trade program can be viewed as a backstop for the containment of carbon emissions under specified limits, even in the case that other policies failed to meet some of their goals.