California Green Innovation Index

The 15^th annual California Green Innovation Index is primarily digital, allowing readers to learn and interact with the findings of the report in an interactive medium. New this year, interactive charts allow readers to dive even deeper into the data. Delays in data availability means the 2023 Index is being released in 2024, and the report was prepared by Beacon Economics.

The report finds total greenhouse gas emissions rebounded between 2020 and 2021, jumping by 3.4 percent to 381.3 million metric tons of carbon dioxide equivalent (MMTCO₂e) in 2021. This increase followed an 8.8 percent drop in emissions in 2020 due to the COVID-19 pandemic. However, most of the increase in emissions came from the transportation sector, which increased by 7.4 percent, driven by a 10.6 percent increase in emissions from passenger vehicles sub-sector. However, emissions from heavy-duty vehicles declined for the third consecutive year, resulting in 14.1 percent reduction in 2021 compared to 2018.

Within the transportation sector, new light-duty electric vehicle sales in all classes rose by 61.7 percent in 2022 compared to the previous year and California met the 2025 goal of 1.5 million zero-emission vehicles (ZEVs) on-road two years early in April 2023. The Index’s encouraging data on electric vehicle sales contrasts sharply with its findings on public transit ridership, which remained 40 percent below the pre-pandemic 2019 level in 2022, despite a 28.1 percent increase in ridership from 2021 to 2022.

To meet the 2030 target of nearly 260 MMTCO₂e, California would need to triple the rate at which it has been cutting emissions since 2010—going from the actual average annual reduction of about 1.5 percent a year to about 4.4 percent a year. This is up from the 3.6 percent needed in 2020 (due to the large drop in emissions due to COVID) and the 4.2 percent needed in 2019. Even in more recent years, California’s emissions decreased by only 1.6 percent on average per year from 2016 to 2021—much less than the rate needed to meet the 2030 goal. Using the trajectory in emissions since 2010, California won’t meet the 2030 goal until 2047.

Among the other economic sectors, emissions from electric power generation have also increased in recent years—a worrying indicator after years of reliable decreases. From 2019 to 2021, emissions grew by 3.5 percent—the largest increase of any sector over that time period. Despite the recent increase, emissions have fallen by 40.5 percent since 2000 and by 12 percent since 2016. The rise in emissions from in-state generation of electricity (+10.3%) is likely due in part to summer heat waves and a lack of robust renewable energy growth in recent years. Additionally, California’s once-held advantage of having a lower average residential electricity bill compared to the rest of the U.S. vanished in the wake of the pandemic. In 2011, the margin stood at 15.9 percent below the national average, but as of 2021, it had shifted to 2.2 percent higher than the U.S. average.

Growth in the amount of renewable energy being generated in California has slowed considerably since 2018— it increased by only 2.2 percent in absolute terms (6.6% in relative terms) to 35.8 percent of California’s total power mix (imports and in-state, but excluding large hydro) from 2021 to 2022. To meet the 2026 goal of 50 percent of generation from RPS-eligible renewable sources, California’s share of electricity generation from renewables would need to increase by 8.7 percent each year from 2022 to 2026, revised upward from 8.3 percent previously. While California still has a sizable lead in generation from renewables (35.8% in California vs. 15.3% in the rest of the U.S.), the pace of growth has slowed in California compared to the U.S. relative to 2008. Solar and wind are the largest renewable sources, making up 17.0 percent and 10.8 percent, respectively, of the state’s total power mix.

While growth in renewable energy generation has not kept pace with our targets, the state has brought online a substantial amount of battery storage and very little new natural gas generation. In 2021, utility-scale lithium-ion battery storage more than quadrupled from 2020 levels, increasing by a factor of 4.3 over the amount reported in 2020. In 2022, California Independent System Operator (CAISO) interconnected grid added 674 MW of solar plus storage capacity and only 2.8 MW of natural gas. By May 2023, stand-alone battery storage accounted for 47.1 percent of the total installed battery capacity, while co-located battery storage accounted for 35.3 percent of the total installed battery capacity, an increase by more than 50 percent in just one year. However, the wait times for new generating capacity to be connected to the grid has also increased, which hampers the state’s ability to get clean energy on the grid quickly. The typical project built in 2022 took five years from the interconnection request to commercial operation, compared to three years in 2015 and less than two years in 2008.

Emissions from the residential and commercial sectors have also been increasing. Over the five-year period from 2016 to 2021, the residential sector’s share of total emissions grew from 5.9 percent to 6.5 percent, and the commercial sector’s share increased from 3.5 percent to 3.7 percent. Emissions from substitutes for ozone-depleting substances (SODS), which emit high global warming potential (GWP) gases such as hydrofluorocarbons (HFCs) and perfluorocarbons (PFCs), are the fastest-growing source of GHG emissions in California—especially in the commercial sector. Emissions from SODS have increased by 273.1 percent since 2000 and by 2.3 percent from 2019 to 2021. In 2021, the largest share of emissions from SODS were from commercial refrigerants (43.9%), followed by residential refrigerants (20.2%), transportation refrigerants (18.2%), and industrial refrigerants (9.2%).

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