Analysis: US states and cities could meet Paris climate goals without Trump

§ Taking the initiative

Days after the announcement that the US would be withdrawing from the Paris Agreement, a newly minted coalition of 12 states announced that they would take action to meet the US’s Paris commitments in the absence of federal action.

This group, called the US Climate Alliance (USCA), has pledged to take action to reduce their own emissions at least 26-28% below 2005 levels by 2025. Collectively, these states directly control around 19% of US CO2 emissions. Around 300 cities have also announced their support of efforts to meet US Paris commitments.

Around the same time, a group of 125 cities, 9 states and more than a thousand businesses joined the We Are Still In open letter organised by former New York City mayor Mike Bloomberg, committing to work together “to take forceful action and to ensure that the US remains a global leader in reducing emissions” in the absence of leadership from Washington DC.

UPDATE:13 states, 1 territory, 246 cities (as of 5pm EDT). 138 million people. pic.twitter.com/S5W6f6QFvK

— Trevor Houser (@TrevorGHouser) June 6, 2017

Additionally, ten states that are not part of the USCA have passed laws or executive orders establishing emission targets ranging from 60% to 80% reductions in CO2 emissions by 2050. These include Arizona, Colorado, Florida, Illinois, Maryland, Maine, Michigan, New Hampshire, New Jersey and New Mexico.

However, some of these states have changed governing parties since the initial targets were established and it is unclear how willing they will be to stick to them in the future. These non-USCA states with emission targets account for an additional 20% of US emissions.

A few additional states, including Pennsylvania, Montana, Ohio and North Carolina, are not part of the USCA and have no committed targets, but publically oppose the decision of the federal government to withdraw from the Paris Agreement.

US states have also been proactive in forming agreements with other countries to collaborate around climate goals. For example, a number of states are planning on working closely with Canada to reduce emissions.

The state of California, which by itself would represent the world’s sixth largest economy and 19th largest carbon emitter, has recently met with both China and Germany to advance emission reductions and clean technology development.

The UN Framework Convention on Climate Change even provides a Non-State Actor Zone for Climate Action (NAZCA), to track and aggregate these commitments.

§ Strength of states

The US political system provides broad latitude for state governments to regulate in-state activities, as long as it does not directly interfere with interstate commerce. In practice, this means that states can directly control nearly all CO2 emissions that occur within state borders and, in some cases, even directly influence emissions in other states through their actions.

If all of the state governments agreed on the need to reduce emissions, they have all the legal authority needed to take action to meet the nationwide Paris Agreement commitments with no requirement for additional federal action.

However, the political divides between states in many ways mirror those at the federal level. So while many states are eager to move forward with action to tackle climate change, there are just as many reluctant to undertake any initiatives that are perceived as costly.

A relatively straightforward way for states to control their CO2 emissions would be to put a price on carbon, either in the form of a tax or tradable permit system. A number of states already have systems like this in place, including the Regional Greenhouse Gas Initiative (RGGI) that covers much of the northeast US and establishes a tradable permit system covering electricity generation.

California has established its own cap-and-trade programme covering approximately 85% of state emissions of CO2 and other greenhouse gases. It is linked to the cap-and-trade system in Quebec, Canada.

States can effectively regulate the price of electricity for all residents through state utility commissions. They can ensure that power purchases and end-user costs reflect the price of carbon. They also have the power to set taxes on gasoline and other transportation fuels, as well as to regulate the price for natural gas, petroleum and other fuels sold directly to commercial, industrial, or residential customers.

The main challenge facing states who undertake their own aggressive climate action is leakage. If energy prices rise high enough, energy-intensive businesses can chose to relocate to states with less restrictive climate policies. However, with the exception of a few very energy-intensive businesses, such as steel production, energy costs generally represent a fairly small part of total business costs.

There are relatively few examples of leakage in practice in other countries that have adopted carbon prices. Studies examining leakage in cases of fragmented climate policy have found real, but not overwhelming effects.

California’s proposed post-2021 revised cap-and-trade actually includes a carbon border adjustment that would require carbon-intensive imported products to purchase emissions permits, though it’s unclear if this would pass legal muster.

Total US carbon emissions from the combustion of fossil fuels can be divided into three distinct sectors, with around 36% of total emissions due to electricity production, 35% from transportation and 29% from so-called “on-site” emissions via industrial, commercial and residential buildings and facilities.

§ Power sector

Approximately 36% of CO2 fossil fuel emissions in the US come from the burning of coal, petroleum and natural gas to generate electricity. States have nearly unlimited authority to regulate generation, either by directly requiring that certain technologies are used to generate electricity or by regulating the price of electricity sold.

More than half of all states have a renewable portfolio standard in place mandating that a certain percent of their electricity comes from renewable sources, including many outside the USCA or lacking emission targets.

While a few states have neglected to extend their renewable portfolio standards beyond 2015, other states, such as Iowa, Oklahoma and Texas, have far exceeded their goals and continue to expand wind generation despite Republican control of state governments.

According to researchers at MIT, current state renewable portfolio standards will go about 60% of the way toward the renewables expansion previously expected under the Obama Administration’s Clean Power Plan.

The interactive figure below shows the breakdown of US CO2 emissions by fuel and state (click on the columns to see a state-level breakdown). It also aggregates emissions by USCA member, non-USCA states that have emission targets, and other “no controls” states.

States that have joined the USCA consume relatively little coal and, generally, have much lower-carbon electricity than “no controls” states. This reflects the political environment in the US, where more liberal northeast and west coast states depend much less on coal than Midwest and Southern states.

Most of the CO2 emissions from coal in non-USCA states with their own emissions targets come from Florida, Illinois, Michigan, and Colorado. USCA and “emission target” states do consume quite a bit of natural gas, though since it is roughly half as carbon intensive as coal the resulting emissions are considerably smaller. Relatively little petroleum is used in electricity production in any state.

USCA members control only around 10% of electric sector emissions, while non-USCA “emission target” states control an additional 20%. Around 70% of electric sector emissions are in “no controls” states.

§ Transport

The transportation sector accounts for around 35% of total US CO2 emissions from fossil fuels. The majority of these emissions come from gasoline use in passenger vehicles. Diesel use in heavy trucks, buses and rail is the next largest source, followed by jet fuel used in aviation.

While states can indirectly impact carbon emissions from transportation by taxing these fuels, their ability to directly regulate the CO2 emissions of vehicles sold or used in the state is a bit more complicated.

The federal government has historically set fuel economy standard for vehicles, known as CAFE standards. However, when the Clean Air Act of 1970 was passed the state of California already had stricter emission standards in place than those in the federal law.

To avoid preempting California’s standards, federal law allowed California to apply for a waiver, that would be granted as long as California’s standard was at least as strict as the federal one. It also allowed other states to choose either to follow the federal standard or the more-strict California one.

This waiver was previously challenged in court by the George W Bush administration after California imposed regulations on vehicle CO2 emissions, but the case was dropped after the 2008 election without a ruling. There are strong indications that the Trump administration will mount a similar challenge, although it is unclear whether California’s waiver will be maintained.

If California does receive a waiver to implement its own vehicle emission standards, it is likely that a number of other states will follow. Ten states have adopted California’s current zero-emission vehicles standard, representing around 29% of new vehicles purchased in the US.

Manufacturers of passenger vehicles have traditionally made the vast majority of their models meet California’s stricter standards to avoid having to create different versions for different states. In this case, a positive spillover is possible where stricter policies in a small number of states influence the vehicle efficiency of all states.

California can directly regulate heavy vehicle emissions. Other states can follow its lead, but here its power is a bit more limited. About 64% of heavy vehicle emissions nationally come from long-haul trucking, the majority of which cross state borders.

While states could, in theory, regulate heavy vehicles sold within state borders, they cannot easily prevent vehicles from other states coming in. Trucking companies could relatively easily relocate and register their vehicles in states with weaker standards. If states want to regulate emissions from heavy vehicles, adding a carbon tax to diesel fuels might be a more easily enforceable approach.

States have less ability to directly regulate emissions from aviation, apart from the taxation of jet fuel, though they could establish incentives to encourage the use of biofuels or more efficient technologies.

Emissions for each state from light vehicles, heavy vehicles, and aviation are shown in the interactive figure below (click on the columns to see a state-level breakdown).

Unlike in the electricity sector, USCA states control a sizable portion of US transportation emissions, particularly for light vehicles. Overall, USCA states are responsible for 26% of transportation sector emissions, with an additional 21% in emission target states.

“No controls” states have a larger portion of heavy vehicles due to their lower-than-average population density and large areas, while aviation is split relatively evenly between the three groups.

§ Buildings and factories

Fuels such as natural gas, petroleum and even coal are used by buildings for heat and industries for manufacturing and other industrial processes. These result in emissions directly at the building or facility, in contrast to emissions from electricity generation which tend to be remote.

“On-site” emissions account for around 29% of total US CO2 emissions from fossil fuels, with 18% coming from industrial emissions, 7% from residential emissions and 4% from commercial emissions.

States can directly establish regulations of CO2 emissions from industrial activity if they choose. There is significant precedent for them doing so for conventional pollutants. However, in practice, the heterogeneity of industrial energy-use characteristics would make this sort of regulation quite complex. Major industries tend to have a significant amount of political influence at the state and local level.

Regulating industries by including major emitters in a cap-and-trade system, as the state of California has done, or taxing fuels upstream would potentially be easier for states to undertake. There is, however, a risk of leakage for some heavy industries where electricity prices play a large role in competitiveness that state policymakers would need to take into account.

States can directly regulate residential and commercial CO2 emissions through mechanisms, such as building codes and appliance efficiency standards. California’s Title 24 is, perhaps, the most far-reaching building code regulation in the US. It includes regulations on building energy use characteristics, as well as the energy use by specific commercial systems, such as supermarket refrigeration.

States have also restricted sales of specific devices based on efficiency, for example, California’s efficiency restriction on incandescent lightbulbs. Requiring retrofitting of existing buildings or equipment would be more difficult, though states have implemented many programmes to encourage homeowners and businesses to make improvements.

Additionally, states can regulate other greenhouse gas emissions from industry, including fugitive methane emissions from oil and gas production. States could also establish requirements for the use of biogas or other alternatives in place of fossil fuels for on-site combustion.

Emissions by state for on-site emissions are shown in the interactive figure below (click on the columns to see a state-level breakdown).

USCA states directly control around 21% of on-site emissions. Another 17% are controlled by non-USCA states with emission targets, while the remaining 62% of on-site emissions occur in “no controls” states.

Cold winter temperatures and the use of natural gas and fuel oil in space heating contribute to a relatively large share of residential and commercial emissions in USCA member states. A sizable portion of industrial emissions occur in “no controls” states, reflecting a prevalence of heavy industries in those states.

§ Cities

While states have more direct control over emissions within their borders, cities can also play a role in either directly regulating or strongly encouraging reductions in emissions. The specific powers that cities and counties have vary widely by state.

Some actions cities can take include establishing their own building codes that mandate efficiency, persuade or force coal plants within their borders to shut down, as has happened in Chicago, and develop their own community choice aggregation programmes to procure power from renewable sources for their residents.

Cities themselves purchase a sizable amount of energy for municipal buildings and agencies. They generally can require the use of renewable energy for these purposes. Cities can establish programmes to encourage energy efficiency in both public buildings and in the private sector, through the use of energy efficiency funds, benchmarking of buildings and PACE financing mechanisms.

In the transportation sector, cities can develop efficient public transit systems that reduce private vehicle use. They can also build more bike lanes or create more pedestrian-friendly areas, as well as regulate the idling of cars and trucks to avoid additional emissions.

Cities can also play an important role in planning for and adapting to climate change in ways that mitigate the impacts of sea level rise, changing precipitation patterns and more frequent heat waves.

§ Conclusion

States have the ability to indirectly or directly regulate the vast majority of US carbon emissions in the absence of federal action and, by themselves, could meet US obligations under the Paris Agreement. However, the political divide over the need to take action on climate change at the federal level is reflected in the states, with many reluctant to establish emission reduction policies.

Twelve states representing 19% of total US emissions have joined the new US Climate Alliance and committed to meeting their share of US Paris Agreement targets. Ten additional states accounting for 20% of US emissions have emission mitigation targets in place. Even in states with no targets, there has been a rapid expansion of wind and solar generation driven by falling prices, as well as a shift from coal to lower-carbon natural gas generation.

While federal action would establish uniform policies nationwide and help combat problems such as carbon leakage, states can and will undertake significant mitigation policies on their own. States can help serve as a laboratory for mitigation policy, with many different strategies developed and tested. The best can be adopted by other states and, potentially, by a future federal administration that more highly prioritises action on climate change.