Disclaimer. After nearly 40 years managing money for some of the largest life offices and investment managers in the world, I think I have something to offer. These days I'm retired, and I can't by law give you advice. While I do make mistakes, I try hard to do my analysis thoroughly, and to make sure my data are correct (old habits die hard!) Also, don't ask me why I called it "Volewica". It's too late, now.

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Saturday, July 21, 2018

California reaches emissions target early

From The San Francisco Chronicle:

In a major win for California’s fight against global warming, the state appears to have hit its first target for cutting greenhouse gases — and it reached the goal early.

Data released Wednesday by the California Air Resources Board show that the state’s greenhouse gas emissions dropped 2.7 percent in 2016 — the latest year available — to 429.4 million metric tons.

That’s slightly below the 431 million metric tons the state produced in 1990. And California law requires that the state’s emissions, which peaked in 2004, return to 1990 levels by 2020.

Since the peak, emissions have dropped 13 percent. The 2008 financial crisis helped, cutting the number of miles Californians drove and the amount of freight moving through the state’s ports, railways and roads. But emissions have continued falling in recent years even as the state’s economy has expanded.

[Read more here]

In absolute terms, the cuts required from now on are indeed significant.  But, actually, achieving those goals is feasible.  Assuming emissions continue to fall by 2.7% per annum, emissions will have fallen to 300 metric tonnes, which misses the 2030 target.  It is likely, though, that the fall in emissions will accelerate, as EVs and PHEVs gain market share, and as gas and gas peaker plants are replaced by solar plus storage.  At a decline of 3.6% per year, just 1 percent per annum more than California achieved in 2016, the 2030 target will be achieved.  From 2030 to 2050, the decline in emissions would have to increase to 5.4% per annum (the absolute decline year to year will be 17.2 million tonnes a year vs 13.1 million tonnes per year between 2016 and 2030) to achieve their 2050 target, and again, this seems feasible.

Reminder:  Between 2004 and 2016, California's real GDP rose 26%.  Proving conclusively -- if we needed such proof -- that we can cut emissions while maintaining economic growth.  California, the world's 6th largest economy, is showing us how it can be done.

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