Carbon Economy

California’s greenhouse gas (GHG) emissions have experienced an overall long-term decreasing trend since 2008, and the state is making progress toward meeting the goal set forth by Senate Bill 32 (SB 32; 2016) of reducing GHG emissions by 40 percent below 1990 levels by 2030. 2020 marks the third consecutive year when GHG emissions from transportation were down, primarily driven by a decrease in emissions from the COVID-19 pandemic-induced lockdowns. However, even though reported transportation emissions decreased in 2020, the transportation sector remained the largest emitting sector at over 37 percent of the state’s total included GHG emissions.

Of all the economic sectors, the most significant GHG emission reductions in 2020 compared to 2019 occurred in the transportation, followed by electricity generation from imports . However, at the more granular level, the electricity generation (in-state) increased (2.42 MMTCO2e) compared to 2019 while the imports decreased in 2020. Undoubtedly, further work will be needed to reduce emissions in harder-to-reach sectors such as transportation, and residential and commercial buildings. Outside of GHG emissions from fossil fuel combustion and other anthropogenic activities—which make up the included emissions defined by Assembly Bill (AB 32) and SB 32—there were significant wildfires in 2021 with nearly 2.5 million acres and 3,846 structures burned. However, the precise amount of emissions from wildfires in 2021 is not yet known.

Significant challenges remain to meet the state’s next climate goal in 2030. Approximately 8,000 large facilities in the state, such as power plants and refineries, released 94 MMTCO2e in 2021, up two MMTCO2e from 2020, and equivalent to 25.5 percent of total GHG emission.1 Emissions in the state also likely rebounded somewhat in 2021 as lockdowns ended and travel increased.2 The state has acknowledged this challenge and has provided strategies to scale emissions reductions in challenging sectors. Furthermore, a new set of rules passed in 2022 by the California Air Resources Board requires in-state sales of new passenger cars and trucks to be 100 percent zero-emission by 2035.3 While emissions continue to move in the right direction, there are key opportunities to pivot the state and reach its emission targets.

California’s Greenhouse Gas Emissions
  • Total greenhouse gas (GHG) emissions declined by 35.27 million metric tons of carbon dioxide equivalent (MMTCO2e) to 369.2 MMTCO2e in 2020, or an 8.7 percent decrease compared to 2019. This also represents 14.3 percent below the 1990 level of 431 MMTCO2e.

  • By top-level economic sector, the Transportation sector saw the largest reduction in GHG emissions from 2019 to 2020 (-16.1%), followed by a 14.1 percent decrease in the Electricity Power Generation from Imports sector. The Industrial sector saw a 7.5 percent decrease (includes Manufacturing & Petroleum Refining and Hydrogen Production), while the Commercial sector (Hotels & Food Services) also decreased by 4.1 percent.

  • GHG emissions rose in only two other economic sectors in 2020 compared to 2019: Agriculture & Forestry (+0.7%), and Electricity Power Generation from In-State (+6.3%).

  • The transportation sector remains the largest-emitting sector in California by far, accounting for 37.9 percent of the total in 2020. This share declined from 41.2 percent in 2019.

  • On the other hand, GHG emissions from the commercial and residential sectors have continued to climb over the last several years despite decreasing total GHG emissions. In the four years from 2016 to 2020, these sectors’ share of GHG emissions rose from 5.2 percent to 6.0 percent for commercial and from 6.6 percent to 8.3 percent for residential—a further increase from 5.7 percent and 7.6 percent captured in 2019, respectively.

  • While emissions from the in-state electric power sector increased from 2019 to 2020 (+6.3%), this sector has experienced dramatic reductions over time. Emissions from in-state generation were down by 30.6 percent and by more than half (-59.5%) for imports in 2020 compared to 2000 levels. Emissions in the electric power sector from both in-state and imports decreased by 1.1% from 2019 to 2020, driven by a 14.1 percent reduction in emissions from imports.

  • The majority of the increase in emissions from the in-state electricity generation were from the Merchant Owned (+1.8%) and Transmission and Distribution (+33.1%) subsectors. As the grid becomes cleaner—while threats from natural disasters such as drought (which reduce electricity generation from hydropower) and wildfires persist—further emission cuts may become more difficult.

California’s Greenhouse Gas Emissions Reduction Progress and Outlook
  • The huge drop in emissions due to the COVID-19 crisis has helped California get closer to the necessary reductions to reach its 2030 climate targets. Given the rate of reduction from 2019 to 2020 (-8.7%), the state would need to reduce emissions 2.9 percent annually to meet the SB 32 goal by 2030. This annual rate needed to meet the goal is down by half from 2019, when the state needed to reduce emissions by 4.2 percent per year to meet the goal. However, the emissions reduction in 2020 was unusual due to the COVID-19 pandemic.

  • At the current trajectory, the state will take significantly less time to reach its SB 32 and 2050 goals. However, the COVID-19 pandemic-induced lockdowns and the shift to work-from-home arrangements for a large percentage of the workforce greatly reduced GHG emissions from the transportation sector in 2020.9 While 2021 emissions in California are not yet known, it is likely they will be higher than in 2020 as lockdowns eased, many people returned to the office, and travel increased.

  • Emissions from the use of Substitutes for Ozone-Depleting Substances (substitutes for ODS),10 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 within the commercial sector. In 2020, GHG emissions from substitutes for ODS from all economic sectors accounted for 5.6 percent of total included statewide emissions, up from 2019’s share (4.9%) and a considerably larger share compared to 2008 (2.3%) and 2000 (1.2%).

California’s Carbon Economy
  • GHG emissions per capita declined 8.7 percent from 2019 to 2020 while the state’s inflation- adjusted gross domestic product (GDP) per capita also declined by 2.7 percent year-over-year during the same time period. Compared to 1990, GHG emissions per capita and inflation- adjusted GDP per capita were down 34.98 percent and up 67.7 percent, respectively, in 2020.

  • From 2010 to 2020, California’s energy intensity decreased by 35 percent, ahead of the next four most populous states: New York (-30.3%), Texas (-23.4%), Florida (- 30.6%), Pennsylvania (-30.7%) and Ohio (-33.3%), but behind Massachusetts (-38.7%).

  • California's experienced the second-most significant decline in carbon intensity, behind Massachusetts (-14.3%), compared to other large states. Illinois came close with a 12 percent drop, followed by New York (-10.7%), Florida (-8.5%) and Pennsylvania (-7.5%). While all other states’ carbon intensity had a modest drop during 2020, the declines in Texas (-6.0%) and Ohio (- 2.2%) were lower than the national average.

  • In addition to performing well in terms of carbon intensity, California also has one of the lowest energy-related GHG emissions per capita, with 7.7 MTCO2e per person in 2020, edging out every other big state except for Massachusetts (7.4 MTCO2e per person) and New York (7.1 MTCO2e per person).

  • Following the previous year’s decreases, the carbon intensity of California’s energy supply (CO2 relative to British thermal unit) declined 2.5 percent in 2020, which was the second-lowest reduction behind Ohio (-1.1%) Petroleum is the primary source of emissions from fuel, underscoring California’s need to reduce emissions from transportation, which declined significantly (-10.4%) in 2020.

Greenhouse Gas Emissions by Sector: Challenges & Opportunities
  • In 2020, within the transportation sector, GHG emissions dropped 16.5 percent from on-road vehicles (-24.89 MMTCO2e; but most of the GHG emissions decrease came from the light-duty passenger vehicles segment). GHG emissions from off-road vehicles decreased 12.2 percent (-1.86 MMTCO2e). Emissions from light-duty passenger cars fell 19.8 percent, and those from light- duty trucks and SUVs fell by 18.5 percent from 2019 to 2020.

  • On-road light-duty vehicles (passenger cars, light-duty trucks & SUVs, and motorcycles) accounted for the lion’s share of the transportation sector’s emissions with 92.9 MMTCO2e altogether in 2020. Following this drop (-19.1%), this represents 25.2 percent of the state’s total emissions, and 66.5 percent of the sector’s total emissions in 2020, down from 2019’s 69.1 percent, due to on-road emissions from heavy-duty trucks continuously falling faster (-7.4%).

  • Unlike the previous year, where the heavy-duty vehicles subsector was the main contributor to the drop in GHG emissions from on-road vehicles, the heavy-duty vehicles subsector GHG emissions decreased by 8 percent or 2.8 MMTCO2e, from 2019. Despite the slight decrease, it actually increased its share of total GHG emissions by 2 percent.

  • Californians have been disposing an increasing amount of waste in landfills since 2012. The state exported or sent 38.4 million tons of waste to landfills in 2020, down 4.2 million tons compared to 2019. In 2020, landfill emissions (as part of the included emissions) reached 8.5 MMTCO2e (+1.3% compared to 2019), and landfill emissions from biogenic materials were 8 MMTCO2e (+1% compared to 2019). The recycling rate in 2021 (data is not available yet) is expected to be similar to 2020, as the pandemic has led to an increase in one-time-use disposables.

  • Emissions from Substitutes for Ozone-Depleting Substances (substitutes for ODS) continue to increase as they replace Ozone-Depleting Substances (ODS) that are being phased out under the 1987 Montreal Protocol. In 2020, GHG emissions from substitutes for ODS from all economic sectors accounted for 5.6 percent of total included statewide emissions, up from 2019’s share (4.9%), and a considerably larger share compared to 2010 (2.9%) and 2000 (1.2%).

  • Although the GHG emissions from fuel combustion of biogenic materials (including biofuels and other biogenic energy sources) for on-road transportation declined significantly over the year, it has still been rapidly increasing over the long term, up 145 percent in 2020 compared to 2008.

  • Emissions stemming from wildfires are producing more GHGs than ever. Emissions from wildfires in California totaled 127.7 MMTCO2ee in 2020, more than any other economic sector except for transportation, and compared with about 65 million metric tons of reductions achieved in the previous 18 years.11 Emissions from wildfires in California in 2021 are not yet known.


1 California’s Greenhouse Gas Emissions Rose in 2021, New Data Says. Here’s How it Happened. San Francisco Chronicle. Oct. 20,2022. 17520953.php

2 While statewide emissions in California in 2021 are not yet known, national data from the EPA shows emissions from large facilities in the state, such as power plants and refineries, have increased 2.1 percent in 2021 compared to 2020.

3 California Moves to Accelerate to 100% New Zero-Emission Vehicle Sales by 2035. California Air Resources Board. Aug. 25, 2022. 2035

4 Mahajan, M., et. al. Modeling the Inflation Reduction Act Using the Energy Simulator. Energy Innovation. August 2022.

5 Larsen, J, et. al. A Turning Point for U.S. Climate Progress: Assessing the Climate and Clean Energy Provisions in the Inflation Reduction Act. Rhodium Group. Aug. 12, 2022.

6 Ibid.

7 Inflation Reduction Act (IRA) Summary: Energy and Climate Provisions. Bipartisan Policy Center. Aug. 4, 2022. Available at:

8 Larsen, J, et. al. A Turning Point for U.S. Climate Progress: Assessing the Climate and Clean Energy Provisions in the Inflation Reduction Act. Rhodium Group. Aug. 12, 2022.

9 U.S. energy-related CO2 emissions declined by 11 percent in 2020, with the transportation sector recording the largest percentage drop (-15%). Source:

10 Emissions occur when they are released into the atmosphere (e.g., from fire extinguishers or aerosol cans) or when they leak out of equipment such as refrigerators and air conditioning units.

11 Smith, Hayley. A Single, Devastating California Fire Season Wiped Out Years of Efforts to Cut Emissions. Los Angeles Times. Oct. 20, 2022.