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California’s Next Cool Climate Move

By Christina Starr, EIA Climate Policy Analyst

California is setting the bar for U.S. action on climate change in many areas and has ambitious goals for reducing emissions of a number of climate pollutants, demonstrating how states can lead at a time when climate leadership by the Federal government is floundering.

Unfortunately, a little known but important element of California’s climate strategy is absent from the projects funded this year through the California Climate Investments. The California Climate Investments is the program that allocates the state’s cap-and-trade revenues. It has appropriated more than $1billion toward projects that help reduce emissions and increase energy efficiency while benefitting California’s residents. These projects include clean car rebates, research and development of dairy digesters to reduce methane emissions, and weatherization of low-income housing to name a few. Missing from the list of projects funded so far, is a very promising idea to incentivize climate-friendly, energy efficient cooling technologies.

The Urgency to Address HFCs and California’s 2030 Emission Goals

California is expected to meet 2020 emission reduction goals, but the much deeper 40% reductions targeted for 2030 pose a greater challenge. Addressing emissions of short-lived climate pollutants is a major pillar of California’s strategy to achieve the 2030 target. In fact, two of these pollutants, hydrofluorocarbons (HFCs) and methane, could contribute about one third of the reductions towards that goal, slightly more than the cap-and-trade program itself.

HFC emissions in California doubled between 2005 and 2015, and are the fastest growing source of emissions in the state and globally. The California Air Resources Board, or CARB, approved a strategy to address HFCs in March and plans to begin introducing draft regulatory measures later this year. However, incentives will help achieve much faster emission reductions than regulations alone and could make the difference between meeting 2030 emission goals or not.

Role of Incentives and Increased Energy Efficiency

HFCs emissions come mainly from their use as refrigerants in cooling equipment ranging from household fridges to much larger systems that can use hundreds of pounds of refrigerant, such as those used by supermarkets, refrigerated warehouses, or industrial processing plants. In order to reduce the use of HFCs, both individual consumers as well as commercial users must purchase new systems that use low-global warming potential (low-GWP) refrigerants. New low-GWP refrigeration and air conditioning systems are available for most uses and are 10-25% more energy efficient than existing HFC systems but have not yet reached cost parity and may come at a 5-15% higher up front cost. Thus, incentivizing the use of low-GWP refrigerants would also support California’s goals under SB 350 to double energy efficiency in buildings by 2030.

Some low-GWP technologies but have not yet reached cost parity with those using HFCs and may come at a 5-15% higher up front cost. Incentives would defray these added upfront costs of purchasing a new low-GWP system when replacing older, less efficient ones using HFCs and HCFCs. Thus would encourage faster uptake by early adopters and increasing economies of scale for low-GWP technologies.

Finally, low-GWP refrigerant incentives would significantly benefit Californians, including disadvantaged communities. For instance, a portion of incentives could help low-income consumers purchase household refrigerators utilizing energy efficient, climate-friendly hydrocarbon refrigerants, which could perhaps be implemented in coordination with the existing low-income weatherization project. Other examples of this could include by supporting small businesses such as bakeries or convenience stores located in low-income communities in the purchase of new refrigeration equipment, or through new supermarkets constructed in food desert areas.

Calling All Stakeholders to Support Refrigerant Incentives

There is an opportunity to share support and feedback on how CARB and the California government allocate cap-and-trade funds. Tomorrow, ARB will hold a live-streamed workshop at its headquarters in Sacramento from 10:00am-12:00pm PST to discuss draft funding guidelines for cap-and-trade auction proceeds. ARB is also accepting written comments and feedback until September 15th.

Earlier this month California legislators approved AB 398, a bill to extend the state’s cap-and-trade program by another decade, and last week California’s quarterly cap-and-trade auction sold out of permits at the highest prices since 2013, raising an estimated $640 million in a single auction. This boost to the cap-and-trade fund sets the expectation that more funds may be available to expand the list of projects to be considered in next year’s state budget process.

We encourage all stakeholders to advocate for the best use of these funds on programs like low-GWP refrigerant incentives that will deliver the fast emission reductions and benefits for Californian residents.

Click here to submit comments by September 15th on the funding guidelines for administering the California Climate Investments.

Header image courtesy of Tom Hilton, Flickr Creative Commons

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