THE NET-ZERO BLOG
Climate policy analysis and updates from Sacramento
Strengths and limitations of California's cap-and-trade program
California’s Cap-and-Trade Program has been the subject of discussion in recent weeks as the Legislature considers options for reauthorizing the program, which is currently set to expire in 2030. In this blog, we examine the strengths and limitations of cap-and-trade as a climate policy. We find that while the program can generate low-cost emissions reductions it is markedly insufficient for delivering a statewide net-zero transition in only two decades. The result is that how cap-and-trade auction proceeds are spent becomes extremely important. Strategic investments in infrastructure, technology and resilience could address the limitations of cap-and-trade and support the state’s climate goals.
Aligning GGRF with the 2022 Scoping Plan
California’s Greenhouse Gas Reduction Fund (GGRF) generates roughly $4 billion annually for appropriation by the Legislature to support the state’s climate goals. However, a majority of these investments were set and have been unchanged since 2014. As policymakers consider cap-and-trade reauthorization it makes sense to review current GGRF allocations in light of the latest available science. In this blog we evaluate the alignment between current GGRF allocations and the 2022 Scoping Plan. We find there is a significant mismatch – including that arguably none of the continuous appropriations (65%) are priority investments for the state’s climate goals.
Data analysis of cap-and-trade program investments
California’s cap-and-trade program generates roughly $7-8 billion per year, of which $2-3 billion is rebated to electricity customers in the form of the California Climate Credit while $4-5 billion is deposited into the state’s Greenhouse Gas Reduction Fund to support the state’s climate goals. As legislators contemplate cap-and-trade reauthorization, we analyze the latest program investment data (May 2024).
California advances toward climate goals: the $39 billion budget
The Legislature and Governor Newsom recently delivered a game-changing $39 billion climate budget and an important set of new policies to propel California towards its climate goals. In this blog post – the first of a three-part series – we review the central piece to the state’s recent actions: the $39 billion climate budget.
Op-ed: Maximizing the impact of a history-making federal clean energy investment program
Op-ed announcement: A recent op-ed in The Hill describes a novel approach to identifying and prioritizing policy and investment actions in order to achieve ambitious climate targets.
Publication: Defining the value of carbon capture, utilization and storage for a low-carbon future
Carbon capture, utilization and storage is identified in a number of integrated assessment models (IAMs) as an available mitigation option to support the global energy transition. Despite this, there continues to be dissent and misinformation in some quarters regarding the role CCUS can or should play in a low-carbon future. This publication from the International Energy Agency’s Greenhouse Gas Technology Collaboration Programme, reviews recent literature from sector-specific techno-economic models, global and regional IAMs, and social studies to assess the value of CCUS. This publication also introduces a decision framework to help policymakers screen the relative competitiveness of CCUS and applies this framework across case studies in the US, UK, Indonesia, Australia and Japan.