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Climate: California taking a stand

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Posted November 11, 2014

The U.S. is often considered to be a stumbling block in the context of climate change, but California is breaking ranks. Next year the state will be the first in the world to introduce emissions trading for road transport. “This is an experiment, and we are fairly nervous,” says Sonia Yeh, the transportation researcher who is helping the politicians adapt traffic for the sake of the climate.

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Sonia Yeh

California is known not only for its endless suburbs, the world’s first four-storey interchange and legendary traffic jams. The state also has the reputation of setting strict environmental standards, which was clearly apparent not least during Arnold Schwarzenegger’s term, the former governor of the state.

As early as nine years ago, he pushed through a law stipulating that emissions of carbon dioxide and other greenhouse gases must be cut by 15 per cent by 2020, which entails a reduction to the level that existed in 1990.

The system for trading in emission allowances that went into force almost two years ago is an important tool in terms of achieving the goal. The system is similar to the one that exists in the EU, with the difference that the emissions trading system in California will also include emissions from road transport starting in 2015.

“Truly reducing carbon dioxide emissions from the transport sector is tricky. It is more expensive per tonne compared to emissions reductions in other sectors, at least with the technology we have today,” explains Sonia Yeh, who works at the Institute of Transportation Studies at the University of California.

She recently visited Chalmers to lecture and to network with research colleagues at Physical Resource Theory. According to Sonia Yeh, financial factors are not the only obstacle to reducing road transport emissions. The challenge also lies in building  the infrastructure needed for alternative and more climate-friendly fuels to assert themselves. “It’s a bit of a chicken or the egg situation. No vehicles, no fuelling stations. And vice versa.”

A third problematic area is the attitude of consumers. When a person is going to purchase a car, climate impact is only one of several factors – and it is not generally the most important one.

Consequently, emissions trading is far from the only control that governing bodies take into account when working towards climate targets – there is an entire range. Local green vehicle premiums, similar to the Swedish system, are one example.

Sonia was engaged by the California Air Resources Board to produce a certificate system for vehicle fuels called the Low Carbon Fuel Standard.

Briefly, the idea is to have suppliers of conventional fossil-based fuels such as petrol and diesel help subsidise more climate friendly options. This primarily concerns natural gas, electricity, biofuels and hydrogen. The aim is to propel the development of technology forward.

The system is market based, and the climate benefits resulting from the different fuels are analysed on the basis of the entire manufacturing chain. So there will be two different trading systems for the transport sector from next year? “Yes, both for the general emissions trading and the certificate trading. It will be a little complicated,” admits Sonia Yeh.

Is the goal set by the authorities in California an ambitious one? “Yes, there is broad agreement that this is the case. Whether the goal will be achieved or not is another issue. The oil companies are claiming that it is completely impossible, while representatives of the alternative sources say it is definitely possible.”

The transport sector is the most important source of  carbon emissions  in California, with levels of between 40 and 50 per cent depending on how you calculate. The fuels used in  the sector are currently 96 per cent fossil fuels. “A significant share of all electric vehicles manufactured globally end up in California, but they still only constitute 0.1 per cent of the cars,” says Sonia Yeh.

She says that if the 2020 target is to be reached, the transport sector’s dependency on fossil fuels must be rapidly reduced. Within the short space of seven years, between 15 and 20 per cent of transportation needs be with vehicles that use alternative fuels. Many Americans already complain about the high price of petrol, even though the price is about half of what it is in Europe. Will California, which is dependent on cars, have to get used to significantly higher fuel prices as a consequence of climate mitigation actions? Sonia Yeh does not believe this necessarily has to be the case.

“Our calculations indicate that regular fuel might increase by around 10 cents a gallon (corresponds to about SEK 0.20 a litre), which isn’t very much. Our economists believe this is positive, since it is an incentive for people to travel less.”

Sonia Yeh also points out that fuel costs, at least in the U.S., actually constitute a small portion of the overall cost of owning and operating a car. Depreciation, tax and insurance are more significant. “However, consumers tend to focus blindly on the petrol price, since that is the cost they encounter on a daily basis.” From a long-term perspective when electric cars have made a greater impact on the vehicle fleet, the average fuel cost will constitute an even smaller share.

“Electricity already only costs 25 per cent of what petrol does. And in Europe, the difference is even greater,” she says. The purchase price for electric cars, however, is still too high for them to have a wide impact. Sonia Yeh makes a comparison to the chicken and the egg again. “Consumers are not buying the new technology since it is too expensive. And the cost for the new technology will not drop until there are many buyers.”

Source: Chalmers University

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