California’s Revamped Energy and Climate Policies, with Kate Gordon – Resources Magazine

Report on California’s 2023 Energy and Climate Legislation in the Context of Sustainable Development Goals

Introduction: Legislative Actions and Global Sustainability Targets

In 2023, the state of California enacted a significant package of legislation addressing energy, climate change, and economic development. These laws directly engage with several United Nations Sustainable Development Goals (SDGs), particularly those concerning affordable energy, climate action, and sustainable infrastructure. This report analyzes the key legislative measures and their implications for achieving these global targets.

Energy Affordability, Infrastructure, and Resilience

Challenges to SDG 7: Affordable and Clean Energy

California faces significant challenges in providing affordable energy, a core tenet of SDG 7. While the state has made strides in energy efficiency, leading to lower average bills, electricity and gasoline rates remain substantially higher than the national average. The primary drivers of these high costs are multifaceted:

• Grid Maintenance and Wildfire Mitigation: Approximately 40% of electricity rates are attributed to the maintenance and upkeep of the grid, including extensive wildfire mitigation efforts. This highlights a critical intersection between SDG 7 (Affordable Energy), SDG 11 (Sustainable Cities and Communities), and SDG 13 (Climate Action), as climate-induced risks directly impact energy costs.
• Legacy Policies: Aggressive rooftop solar incentives, while promoting clean energy, have shifted grid maintenance costs onto a smaller base of ratepayers, contributing to higher rates for those who remain fully on the grid.
• “Islanded” Gasoline Market: California’s gasoline market lacks pipeline connections to the rest of the United States, making it dependent on in-state production and foreign imports. Aging refineries and periodic shutdowns create supply volatility and price spikes, impacting consumers and challenging the goal of affordable energy access.

Legislative Frameworks for Climate Action and Sustainable Infrastructure

Strengthening SDG 13 (Climate Action) through Cap-and-Trade

California has reaffirmed its commitment to SDG 13 by extending its cap-and-trade program through 2045 via Assembly Bill 1207 and Senate Bill 840. This extension provides long-term market certainty for emissions reduction. Key modifications to the program include:

1. Offset Integration: The allowance for carbon offsets was increased from 4% to 6% but was brought “under the cap.” This requires companies to achieve a 94% direct reduction before utilizing offsets, strengthening the program’s integrity.
2. Revenue Allocation for Sustainable Development: The legislation directs revenue from the Greenhouse Gas Reduction Fund toward specific projects that advance multiple SDGs.

Investing in SDG 9 (Industry, Innovation, and Infrastructure)

A significant portion of the cap-and-trade revenue has been allocated to infrastructure projects aimed at long-term emissions reduction and sustainable development. Notable allocations include:

• High-Speed Rail: A commitment of one billion dollars per year is designated for the state’s high-speed rail project, a major investment in sustainable transportation infrastructure (contributing to SDG 9 and SDG 11).
• Wildfire Prevention: Continued funding for wildfire prevention addresses climate resilience and helps mitigate upward pressure on energy costs.
• Regional Grid Integration: New legislation promotes the development of a more regional electricity grid with other Western states, which is expected to enhance reliability and long-term affordability by diversifying energy supply, directly supporting SDG 7.

The Energy Transition: Balancing Economic, Social, and Environmental Goals

Navigating Trade-offs between SDG 7, SDG 8, and SDG 13

Senate Bill 237, which facilitates continued oil drilling in Kern County, exemplifies the complex trade-offs between energy affordability (SDG 7), local economic stability (SDG 8: Decent Work and Economic Growth), and climate action (SDG 13). The decision was influenced by analysis indicating that restricting in-state production could lead to severe gasoline price increases due to the state’s isolated market and limited import infrastructure.

• Economic Dependence: Kern County’s economy is highly dependent on tax revenue from fossil fuel extraction. The bill reflects a policy choice to maintain short-term economic and energy price stability.
• A Call for Comprehensive Transition Strategy: While the bill was passed to address immediate affordability concerns, it underscores the urgent need for a comprehensive and proactive energy transition strategy. Such a strategy would support affected communities like Kern County in diversifying their economies, aligning with the principles of a just transition and the long-term objectives of SDG 8 and SDG 13.

Carbon Management as a Tool for Climate Action

Innovating for SDG 9 and SDG 13

California’s legislature addressed carbon management, a critical component for achieving long-term climate goals. The actions taken reflect both progress and hesitation in embracing technological solutions for climate mitigation.

1. Infrastructure for Carbon Sequestration (SB 614): The governor signed legislation lifting the moratorium on interstate CO₂ pipelines. This measure enables the development of infrastructure required for carbon capture and sequestration, leveraging the state’s geological potential for carbon storage, particularly in regions like Kern County. This aligns with SDG 9’s focus on building resilient infrastructure and fostering innovation.
2. Veto of Carbon Removal Market Creation (SB 643): In a contrasting move, the governor vetoed a bill that would have created a state-backed purchase program for carbon removal. Proponents argued that such a program was necessary to create a viable market for removed carbon, distinct from the market for avoided emissions. The veto was justified as being duplicative of existing programs, a decision that has been questioned by advocates who see it as a missed opportunity to accelerate a critical climate technology and support a nascent industry in California.

Analysis of Sustainable Development Goals in the Article

1. Which SDGs are addressed or connected to the issues highlighted in the article?

• SDG 7: Affordable and Clean Energy: The article extensively discusses energy prices in California, the affordability of electricity and gasoline, the role of renewable energy sources like solar, and the importance of energy efficiency measures.
• SDG 8: Decent Work and Economic Growth: The discussion touches upon place-based economic development, the impact of industries (like oil and gas in Kern County) on local economies, and the need for an “energy transition strategy” that considers the economic future of communities dependent on fossil fuels.
• SDG 9: Industry, Innovation, and Infrastructure: The article details various infrastructure challenges and projects, including the maintenance and resilience of the electricity grid, the development of high-speed rail, the role of oil refineries, and the potential for new infrastructure like CO₂ pipelines for carbon management.
• SDG 11: Sustainable Cities and Communities: The text addresses the challenges of urban development in high-fire-risk areas and the need for resilient infrastructure to protect communities. It also covers sustainable transport through investments in high-speed rail.
• SDG 13: Climate Action: This is a central theme, with detailed discussions on California’s climate policies, such as the cap-and-trade system, greenhouse gas emissions reduction, carbon removal technologies, and adapting to climate impacts like increased wildfire risk.

2. What specific targets under those SDGs can be identified based on the article’s content?

• Target 7.1 (Ensure universal access to affordable, reliable and modern energy services): The entire conversation about high electricity and gasoline prices, and the political trade-offs made to prevent prices from going “through the roof,” directly relates to the goal of ensuring energy is affordable for consumers.
• Target 7.2 (Increase substantially the share of renewable energy): The article mentions California’s “renewable portfolio standard” and policies supporting rooftop solar, which are direct measures to increase the share of renewable energy.
• Target 7.a (Promote investment in energy infrastructure and clean energy technology): The discussion on carbon management, the development of carbon removal projects, and the need to create a market for a “removed ton of carbon” points to this target.
• Target 8.2 (Achieve higher levels of economic productivity through diversification, technological upgrading and innovation): Kate Gordon’s call for a comprehensive “energy transition strategy” for places like Kern County, moving away from oil production towards new industries, aligns with this target.
• Target 9.1 (Develop quality, reliable, sustainable and resilient infrastructure): The article highlights the need for resilient infrastructure through its focus on wildfire mitigation for the electricity grid, recapitalizing the wildfire fund, and investing a billion dollars a year in high-speed rail.
• Target 9.4 (Upgrade infrastructure and retrofit industries to make them sustainable): The discussion on the challenges of aging oil refineries and the need to support “refinery transition” is a clear example of efforts related to this target.
• Target 11.5 (Reduce the economic losses and number of people affected by disasters): The significant portion of the conversation dedicated to wildfire risk, the costs of mitigation (40% of the utility rate), and the strict liability of utilities for fire damage directly addresses the need to reduce the impact of climate-related disasters.
• Target 13.1 (Strengthen resilience and adaptive capacity to climate-related hazards): The focus on wildfire prevention and mitigation efforts on the electricity grid is a direct example of building resilience to the impacts of climate change.
• Target 13.2 (Integrate climate change measures into policies, strategies and planning): The article is a case study of this target in action, analyzing California’s legislative package that includes extending the cap-and-trade program, setting emissions reduction goals, and creating policies for carbon management.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

• Indicator for Target 7.1: The price of energy is a key indicator. The article explicitly mentions the potential for “$8 to $10 a gallon for gas” and the high electricity rates as measures of affordability challenges.
• Indicator for Target 9.1: Financial investment in infrastructure is a clear indicator. The article specifies a “carve-out of a billion dollars a year for high-speed rail” from the cap-and-trade revenue.
• Indicator for Target 11.5: The cost of disaster mitigation is an implied indicator. The article states that wildfire mitigation accounts for “about 40 percent of the rate” for PG&E customers, showing the significant economic resources being directed toward reducing disaster risk.
• Indicator for Target 13.2: The structure and goals of climate policy serve as an indicator. The article details the extension of the cap-and-trade program to 2045 and the specific rules within it, such as the requirement for a “94 percent reduction” in emissions with a “6 percent offset” allowance.
• Indicator for Target 7.a/13.2: The existence and scale of a market for new technologies is an indicator. The article discusses the lack of a “coherent market for a removed ton of carbon” and the governor’s veto of a bill that would have created a “CO₂ removal purchase program,” indicating a gap in progress toward this goal.

4. Table of SDGs, Targets, and Indicators

Source: resources.org