December 12, 2024

Dear Californians,

For over fifteen years, Next 10 has closely tracked the most pressing environmental and economic challenges facing the state of California, with a goal to educate and empower Californians to seek a better future for our state. Following significant federal investments over the last four years, there have been encouraging developments on climate action. The Inflation Reduction Act alone has resulted in over $130 billion in new investments nationally, with $1.6 billion in California alone. This further confirms that we can spur economic growth while reducing harmful pollutants and emissions. However, we are not doing enough, fast enough.

From 2021 to 2022, emissions in California fell by 2.4%—an encouraging sign after emissions increased by 3.4% the previous year as pandemic restrictions eased. In fact, total emissions in 2022 remained 8.8% below the pre-pandemic level in 2019.

Despite this encouraging news, California needs to decrease emissions by 4.2% annually on average to meet the 2030 goal of 40% below 1990 levels. In 2022, emissions were only 13.8% below that level and, for comparison, emissions only fell by 2.5% annually from 2018 to 2022. Using this rate of reduction, we won’t meet our 2030 climate goal until 2037.

Even if the state does meet the 2030 goal on time, emission decreases would need to double to 8.8% annually to meet the 2045 goal. The world sees California as a global leader in innovation and climate action—and that is true. However, the most important metric is reducing GHG emissions, and it is unlikely that we will hit our 2030 target at the current rate.

Within the total decrease in emissions in California, transportation emissions have seen some of the biggest reductions—remaining 13.5% below 2019 levels in 2022. Even from 2021 to 2022, emissions from transportation decreased by 3.6%. Emissions from the industrial sector remained 9.1% below 2019 levels in 2022.

On the other hand, emissions from certain sectors have continued to move in the wrong direction. Emissions from electricity generated in-state fell by only 0.8% from 2021 to 2022, but that represented an increase of 9.5% compared to 2019. Commercial sector emissions have also grown substantially, driven primarily by refrigeration and air conditioning. In 2022, emissions from that sector were 60.6% higher than in 2000, and there was an increase of 3.7% from 2021.

While renewable energy generation grew in California by 1.1% to account for 36.9% of the total power mix in 2022, California’s share of electricity generation from renewables still needs to increase by 4.4% each year from 2023 to 2026 to meet the goal of 50% of generation from RPS-eligible renewable sources by 2026—up from the 3.5% needed previously. To meet the 2030 goal of 60%, the share of electricity generation from renewables would need to increase by 3.3% annually from 2023 to 2030.

Despite these setbacks, there have been positive developments in the state. California met the 2025 goal of 1.5 million zero-emission vehicles (ZEVs) on-road two years early in 2023, and there were nearly two million ZEVs sold as of Q2 2024. The state also auctioned its first leases for offshore wind development and the California Department of Water Resources has announced a plan to procure up to 7.6 GW of offshore wind power by 2037. From 2022 to 2023, energy storage capacity grew by 23% in California and by 117% in the rest of the U.S. California accounted for 44% of energy storage added nationwide in 2023.

While this report focuses on California, global emissions are still increasing. In 2023, global greenhouse gas emissions increased by 2% to a new high of 53 billion metric tons of carbon dioxide equivalent (GtCO₂e)_—a 60% increase since 1990. While the work to reduce emissions in California is significant and crucial, we must maintain this larger view. One of the most pressing challenges worldwide is growing electricity and water demand as a result of the rapid deployment of data centers to power AI. Even though new renewable resources are rapidly coming online, the faster growth in energy use by these centers will drive natural gas consumption and threaten our ability to meet our climate goals. This challenge was discussed at COP29, held in Azerbaijan this year, and will continue to be an issue in the coming years.

We must also note that the federal landscape has changed. With the incoming Trump administration, states like California are going to have to maintain forward progress on climate. California voters passed a $10 billion climate bond in November, and there were ballot measures in other states related to climate. For example, voters in Washington State resoundingly defeated a measure to overturn the state’s signature climate law, known as the Climate Commitment Act.

Even with the new federal headwinds, progress at the state and international levels must continue. Research shows that 3.6 billion people worldwide already live in areas highly susceptible to climate change, and that number will continue to grow as the impacts of climate change—such as hurricanes, droughts, wildfires, flooding, extreme heat and more­—worsen.

Here in California, we can show the world that we can reduce our emissions through a combination of being at the forefront of EV sales, new charging stations, new renewable energy, electrification of buildings and transportation, and clean tech innovation. It is important we ensure all Californians are part of the solution—from job creation in burgeoning green industries to toxic site cleanup—as harmful air pollution and climate change disproportionately impact our historically disadvantaged communities.

We hope that our latest data will shed light not only on the challenges we face in attempting to address climate change while growing our economy, but also the opportunities to help us get there. By redoubling our statewide efforts to serve as a climate leader, we can help deliver benefits to all Californians while reclaiming our role as a global leader.

Sincerely,

Noel Perry, Founder