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Devra Wang’s Blog

California Takes Another Big Step Forward Building a Clean Energy Economy

Devra Wang

Posted November 14, 2012

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Today marks the launch of California’s cap and trade program, a critical part of the state’s landmark clean energy and climate law, AB 32. This is a big step forward for California, and it is the latest in a series of groundbreaking steps the state has taken to build a clean energy economy.

The cap and trade program has been the focus of much of the attention given to AB 32, in part because of the oil industry’s ongoing attacks as they seek to continue freely polluting, but it is just one part of a much broader package of programs to meet the state’s clean energy and climate goals. The cap and trade program is a critical piece of that package – it puts a price on carbon pollution and holds the state’s largest emitters accountable – but it is expected to achieve less than 20 percent of the pollution reductions needed to meet the AB 32 goals.

Although it’s always tempting to look for a “silver bullet” to solve a problem, there is no single response to the challenge of building a clean energy economy and curbing climate change. AB 32 is a great model precisely because it is comprehensive. Most of the state’s pollution reductions come from clean energy policies in the transportation and utility sectors (which together account for three-quarters of the state’s pollution).

(Image credit: KQED)


Over the past six years since AB 32 was enacted, California has adopted a series of landmark policies that promote common sense strategies in each sector to cut pollution, create jobs, and save consumers money. In the transportation sector, the primary strategies the state is advancing include:

  1. Cleaner cars and trucks - The state’s standards requiring car companies to produce cleaner vehicles are expected to save Californians billions of dollars at the pump. And since the federal government adopted these standards nationwide, requiring new vehicles to reach almost 55 miles per gallon by 2025, the standards are expected to save Americans tens of billions of dollars over the coming years.
  2. Cleaner fuels – Powering our cars and trucks with cleaner fuels can clean our air and give Californians more choices rather than remaining subject to the whims of world oil prices at the pump. California’s path breaking Low Carbon Fuel Standard requires a 10 percent reduction in the carbon content of fuels by 2020.
  3. Sustainable communities – Designing our communities to enable Californians to walk, bike, or take public transit to get to more of the places they want to go can both significantly reduce pollution and improve our quality of life. The state’s model law promoting sustainable communities, known as SB 375, is another key part of AB 32.

In the utility sector, the state is advancing:

  1. Energy efficiency – California has been a leader for decades at improving the efficiency of our buildings and appliances – upgrades that make us more comfortable at home and lower our utility bills. These efforts, which have already saved Californians more than $50 billion and avoided the need for thirty giant power plants, are ramping up under AB 32. Just last week, the California Public Utilities Commission approved another suite of efficiency programs for the next two years that are expected to save utility customers another billion dollars.
  2. Renewable energy – Last year, California adopted the nation’s strongest renewable energy standard, requiring utilities to supply one-third of their power from clean sources by 2020.   Together with policies to promote clean distributed generation, this is helping spur the rapid growth of the clean energy industry, and helping protect Californians from volatile fossil fuel prices.
  3. Cleaner power plants – California adopted a model policy at the same time as AB 32 to ensure that any long-term investments utilities make on behalf of their customers go to cleaner and more efficient power plants. Since power plants often last for thirty years and longer, this law, known as SB 1368, ensures that we don’t saddle future generations with expensive and polluting power plants.

While California is breaking new ground today launching the nation’s first economy-wide cap and trade program, it is far from alone in advancing the key policies that are needed to build a clean energy future.  For example, half the states have now adopted energy efficiency requirements for utilities, increasing their efficiency investments eight fold over the last decade as a result. More than half the states have renewable energy standards, double the number of a decade ago. And these states were painted both red and blue last week, consistent with the strong bipartisan support for clean energy policies in California. 

Many of California’s business are supporting the state’s AB 32 clean energy efforts, and seizing the opportunity to lead this trillion dollar industry worldwide. Businesses ranging from small startups to the nation’s largest car companies and utilities are putting their talents to work at producing better and cleaner products. The oil industry remains the last holdout, fighting against progress with ballot propositions and lawsuits, trying to prevent us from having choices to power our cars. Rather than spending millions of dollars – that we all paid them at the pump – on these efforts, the oil industry should put its scientists and engineers to work building a better future for California.

Our state has a proud record of paving the way for national advances on clean air, energy efficiency and cleaner cars.  Today’s start to the cap and trade program takes us another step farther down the path to a clean energy future for California and the nation.

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