Industry and environmental coalition calls for ambitious action to move state’s homes and buildings off of fossil fuels
Cohesive plan to reduce pollution from buildings urgently needed as building emissions spike nationwide
California must rapidly implement a plan to cut pollution from homes and buildings, or risk locking in emissions from natural gas that will threaten the state’s climate goals. That’s the message from a powerful coalition uniting stakeholders within the building industry with energy providers, local governments and environmental organizations, who are today calling for dramatic and urgent action from Gov. Gavin Newsom to address what they call a blindspot in California’s climate policy: emissions from homes and buildings.
“Building emissions spiked 10 percent nationally in 2018, driving one of the largest national emissions increases in decades,” said Panama Bartholomy, director of the Building Decarbonization Coalition. “Yet even here in California, the nation’s climate leader, there is no plan in place to address these emissions, the source of 25 percent of our climate pollution.”
In A Roadmap to Decarbonize California’s Buildings, released today, the Building Decarbonization Coalition lays out a plan for the state to cut building emissions 20 percent in the next six years and 40 percent by 2030 - and to adopt zero-emission building codes for residential and commercial buildings by 2025 and 2027, respectively. Residential buildings produce roughly two-thirds of the state’s building emissions, and commercial buildings produce around one-third.
“Reducing the environmental impact of homes and buildings is both an environmental imperative and an economic opportunity,” said Lauren Faber O’Connor, chief sustainability officer for the City of Los Angeles. “This roadmap shows that together, we can cut energy consumption and reduce costs at the same time — showing the world that going green is good for your health and bottom line.”
Zero-emission appliances must build market share
About half of all building emissions result from electricity use, while the other half come from gas and propane appliances used for heating. As California’s electricity becomes cleaner and the California Energy Commission’s most recent building code goes into effect, requiring all new homes to be built with on-site renewable energy, the former will decline. To cut the remaining emissions, fossil fuel burning appliances must be replaced with all-electric models.
“Methane and carbon dioxide emissions from natural gas carry a high cost for public health and climate in California," said Tim O’Connor, senior director of the California Energy Program, at Environmental Defense Fund. "We need lasting policies to reduce our dependence on gas while increasing the market share of cleaner, electric appliances - which can lower costs and pollution to benefit everyone.”
Last month, the California Public Utilities Commission announced efforts to reduce building emissions, as it implements SB 1477 from Sen. Henry Stern, which deploys $200 million to help make clean heating options like electric heat pumps more accessible to all Californians through incentives for manufacturers and builders.
"LADWP welcomes this effort to accelerate the development and deployment of high efficiency heat pump technology," said David Jacot, P.E., director of efficiency solutions, Los Angeles Department of Water and Power. "It is very important that the state's electrification efforts be achieved with the highest efficiency electric appliances possible, and not with antiquated electric resistance technology."
“SB 1477 is an important step in ensuring all Californians have access to clean, efficient heating technologies,” noted Pierre Delforge, a senior scientist from Natural Resources Defense Council, which helped support the bill. “Electric appliances will play an important role in reducing emissions, while also helping to eliminate a significant source of indoor air pollution.”
“Every home or building that’s built using natural gas for heating deepens our challenge, further digging us into a climate hole we will eventually need to climb out of,” noted Bartholomy. “Lucky for us the alternatives are here and at cost with natural gas appliances. In fact, by avoiding gas infrastructure to and in a building we are finding that all-electric construction can be cheaper than buildings with gas.”
Recent analyses from researchers including E3, Rocky Mountain Institute and Synapse have shown that transitioning to efficient electric appliances is the least-cost and most effective way to reduce emissions from homes and buildings.
Roadmap calls for consumer awareness and fair access for all Californians
The Roadmap - developed by energy providers, workers, developers, local governments and environmental organizations - responds to a range of market and policy barriers preventing mass adoption of zero-emission appliances, even though electric heat pumps, electric induction ranges and electric clothes dryers are readily available.
“As the electricity sector becomes cleaner, we need a range of tools and programs providing customers more choices for cleaner, safer electric technologies, including heat pump water and space heaters," said Jill Anderson, vice president customer programs and services, Southern California Edison. "The Building Decarbonization Coalition’s Roadmap is a visionary vehicle addressing one part of the overall economy-wide set of actions needed to meet California’s ambitious climate goals while maintaining affordability for customers."
The Roadmap calls for an equitable approach to ensure vulnerable communities already struggling against skyrocketing housing costs and stagnating wages are protected as California moves toward zero-emission technologies.
“It is critically important that we do not shift the costs of moving off of fossil fuels onto communities that cannot afford to be squeezed any further,” said Stephanie Wang, policy director of the California Housing Partnership. “This policy roadmap highlights a key best practice for addressing the housing crisis – empower affordable housing developers to tap the full range of innovative low-carbon technologies so they can choose the options with the lowest upfront costs and greatest bill savings for residents.”
To achieve this, the Roadmap calls for low-cost, easily accessible financing options, re-aligning existing programs to help communities achieve carbon-free homes and implementing measures such as bulk purchasing, subsidizing installations and contractor training.
Industry prepares for the transition
The Roadmap finds that zero-emission building codes at the local and state levels are critical policy tools to help prepare industry.
“Zero-emission building codes send a strong market signal to industry stakeholders like developers, builders and consumers - allowing them to invest and plan for zero-carbon buildings, which in turn can help the market prepare for the retrofitting process,” said Bartholomy.
Research from the Rocky Mountain Institute has found that all-electric buildings cost less to build to code than those requiring additional gas infrastructure.
“Creating climate-friendly homes and buildings is actually a huge economic and workforce opportunity,” said Chris Walker of the California Association of Sheet Metal and Air Conditioning Contractors, National Association. “Not only must we retrofit hundreds of thousands of buildings across the state in coming decades - buildings are a primary source of climate emissions in the world. The rest of the world is looking for the economic models and successful technologies to go fully carbon neutral. California’s leadership and success in this endeavor will provide an international template for climate change solutions in building construction and operations.”
Recommendations from the Building Decarbonization Coalition Roadmap include:
Download "A Roadmap to Decarbonize California’s Buildings"
White Papers: Building decarbonization is critical low-cost strategy to reduce GHG emissions, but significant barriers remain
New white papers highlight opportunities and challenges as California’s PUC begins implementing SB 1477
Three new reports identify best practices, barriers and opportunities to support the development of zero-carbon, all-electric buildings -- a critical low-cost strategy that can help California tackle emissions from homes and buildings, the state’s second largest source of climate pollution.
“Taken together, these papers show that by implementing a robust series of actions in California to support building electrification, we can slash emissions at the least cost to consumers,” said Panama Bartholomy, Director of the Building Decarbonization Coalition.
The three reports, California’s Building Decarbonization Opportunity, Rate Design for Building Electrification, and Strategies and Approaches for Building Decarbonization, precede the California Public Utility Commission’s (CPUC) release of a draft Order Instituting Rulemaking (OIR) on the issue of building decarbonization. The PUC will address the OIR at a January 31 meeting, as it prepares to implement SB 1477 - the first legislatively mandated building decarbonization bill in the country, authored by Sen. Henry Stern (D-Canoga Park), that will grow the market for clean, low-emission heating sources in new and existing homes and buildings.
“The passage of SB 1477 and AB 3232 was an important step towards creating 100 percent emission-free communities through clean, all-electric homes and buildings,” said Alejandra Mejia Cunningham, one of the report authors. “As the CPUC develops the policy framework to guide implementation, we hope they’ll incorporate the recommendations of these papers -- adjusting rates to send optimal price signals, investing in market development and workforce readiness and implementing a range of cross-sectoral strategies to support building electrification.”
California's Building Decarbonization Opportunity highlights recent work by the California Energy Commission, showing that a decarbonization strategy that relies on building electrification will save consumers billions of dollars compared to other carbon reduction strategies. Even still, the report identifies significant barriers to electrification for consumers and the workforce -- including upfront costs, workforce readiness and regulatory tools that don’t account for the full suite of benefits of decarbonization.
“To hit our climate goals, 50 percent of new space and water heating in California’s buildings must be electrified by 2030, moving to 100 percent by 2045. We need a long-term strategy across regulatory bodies in California to drive down costs and quickly grow consumer experience with low-emission technologies,” said Bartholomy.
The report recommends that state regulators reconfigure the existing cost-benefit tests that guide programs to appropriately account for the true costs of fossil fuels. Other recommendations to guide the regulatory framework include:
“For most single- and multi-family home construction, electric appliances have lower lifetime costs than fossil fuel appliances, especially considering the avoided costs of gas infrastructure,” said Bartholomy. “These technologies are already on the market - but they won’t reach mass adoption until we align market interests so that everyone benefits from decarbonization.”
Adjusting key rate design levers is another way the PUC can send price signals to customers that will help them integrate zero-emission appliances into their lives in ways that reduce costs for all Californians, according to the second brief, Rate Design for Building Electrification.
“Evolving rates to support GHG reduction goals is a key step to supporting building electrification, encouraging consumers to use electricity in off-peak times, that will benefit their wallets and the grid,” said Bartholomy. “This report provides comprehensive guidance to the PUC on how smart electricity rate design can cut building emissions.”
The report recommends addressing baseline allowances, providing optional time-of-use rates that reward off-peak electricity use, and revisiting high usage charges for residential customers. The third report, Strategies and Approaches for Building Decarbonization, highlights best practices from across the nation that will help guide California's implementation.
“By incorporating best practices to cut building emissions, California can pursue zero-emission buildings in a way that upholds our values - with a focus on affordability and equity, supporting workers, and creating a positive experience for consumers,” added Mejia Cunningham.
These reports are the first in a series of papers and policy guidance from the Building Decarbonization Coalition. The group will release a Policy Roadmap to guide California decision-makers early next month.
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