December 16, 2025

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. California has long been a global leader in environmental policy, setting ambitious climate goals and pioneering clean energy innovations. Yet today, the state faces a new challenge: how to continue leading on climate action while addressing a mounting affordability crisis that threatens our progress at a time when disasters are only getting worse. The wildfires in January devastated parts of Los Angeles, destroying approximately 16,000 buildings and causing an estimated $61 billion in damages — the most of any wildfire on record in the United States.¹

In California, and across the country, the cost of living has surged. Electricity rates have increased sharply as utilities fund wildfire mitigation, grid modernization, transmission upgrades, and new generation while residential natural gas prices increased by 33% over the last five years.² Gas prices at the pump remain among the highest in the nation. Homeowners and renters alike face escalating insurance costs, with many Californians unable to secure coverage at all in wildfire-prone regions.

Recent moves by the Legislature reflect an awareness of this tension. A new law advancing the creation of a Western regional electricity grid could help stabilize prices by improving efficiency and reliability across state lines. Other measures, such as reforms to California’s cap-and-trade program and changes to how utilities recover wildfire mitigation spending, show a willingness to balance environmental imperatives with economic realities. Climate policies moving forward must achieve environmental goals without undermining affordability.

At the same time, California’s clean energy transition must accelerate to meet surging electricity demand — particularly from energy-intensive data centers driving the digital economy. In 2024, California increased the share of electricity generation from renewable sources by 4.4% to 41.3% — the highest increase on record — yet still fell short of the 2024 goal of 44%. On the other hand, energy storage capacity in California has exploded since 2020, which allows stored solar energy to be used in the evenings and improves reliability. Battery storage in the state has grown by more than 3,000% — from 500 megawatts in 2020 to more than 15,700 megawatts today.³ Offshore wind, which could deliver gigawatts of clean power to the grid if brought to fruition, coupled with continued investments in solar, battery storage, and other renewable resources are vital to meeting that demand sustainably. Streamlining these processes through simplified permitting and faster interconnection times is also critical if California is to meet its climate goals without burdening ratepayers.

Accelerating clean energy deployment is also critical to meeting the state’s climate goals and reducing emissions through increased electrification across all sectors of the economy. While California reduced emissions by 3% from 2022 to 2023, the state is not on track to meet the 2030 target of 40% below 1990 levels on time. To meet the goal on time, California would need to reduce emissions by an average of 4.4% per year — more than 1.5x greater than the average annual reduction of 2.8% from 2019 to 2023. Although the challenge in meeting this goal is significant, there was a noteworthy success. GHG emissions in 2023 were also 2.4% lower than during the economic shutdown due to the COVID-19 pandemic in 2020, showing that California continued to reduce emissions even after the economy reopened and regular activity resumed. California’s progress in cutting emissions demonstrates the impact of ambitious climate policies and clean energy innovation, yet additional efforts are required to reach its climate and carbon neutrality goals.

Transportation remains the largest-emitting sector in California, accounting for 38.1% of the state’s total emissions in 2023. While emissions from this sector fell by 4.6% from 2022 to 2023 — the most of any sector — more work needs to be done to reduce vehicle miles traveled and increase EV adoption to further reduce emissions. The share of new vehicles sold in California that are zero-emission has held steady at about 25% in recent years, but that number is likely to fall since the EV tax credit expired at the end of September. ZEV sales reached a record high of 29.1% of new cars sold in California in the three months leading up to the expiration date⁴ — and it’s unclear whether we will reach those heights again. We must redouble our efforts to electrify this sector, including not only EV adoption, but also expanding public transit ridership and encouraging alternative modes of transport like walking and biking to reduce vehicle miles traveled.

Beyond reducing emissions, we also must consider how we address climate change and protect Californians now. While California’s policies focus primarily on mitigation, there is also the question of to what extent we should also focus on adaptation. The impacts of climate change are already being felt by communities across the state, so we should consider additional measures such as strengthening infrastructure, reforming insurance systems, and building resilience against fires, floods, drought, and extreme heat.

Meanwhile, at the federal level, the weakening of the Inflation Reduction Act and efforts to roll back environmental protections make California’s leadership even more consequential. Voters passed a $10 billion climate bond last November that will provide much-needed funding for climate projects across the state in the absence of federal dollars. And beyond the borders of the United States, emissions are on the rise globally. According to the National Oceanic and Atmospheric Administration, global CO2 emissions increased by the largest amount on record from 2023 to 2024 — 3.75 parts per million — which represents a 0.9% increase.⁵ States like California and other nations are going to have to step forward while the federal administration steps backward on climate.

Here in California, we have shown 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 while growing our economy. Now, California’s challenge — and its opportunity — lies in demonstrating that bold climate policy and affordability are not mutually exclusive. By continuing to innovate and invest in smart, sustainable solutions, California can continue leading on climate while ensuring that the benefits of a cleaner future are within reach for everyone.

Sincerely,

F. Noel Perry, Founder