Emerging Climate Strategies: Leveraging Marketplace Momentum

Emerging Climate Strategies:
Leveraging Marketplace Momentum

Climate Change is a global problem with grave implications: environmental, social, economic, political and for the distribution of goods. It represents one of the principal challenges facing humanity in our day.

– Pope Francis, Encyclical Letter on the Care for Our Common Home

We’ve all been talking and thinking about climate change for a while now, but the past few months have turned into “the summer of climate change.” California and the rest of the West have seen record drought, a massive string of wildfires, and compromised air and water quality. In the political arena, people are catching on, from actions in the California Legislature to edicts from Pope Francis. Clearly, the time to act is now!

A recent Citigroup report on “Why a Low Carbon Future Doesn’t Have to Cost the Earth” (August 2015) estimates that taking action on climate change now could save $1.8 trillion. While the estimated cost of inaction is set at $192 trillion over the next 25 years, the “action” scenario costs slightly less – $190.2 trillion – thanks to the rapidly falling cost of renewables and energy-efficiency improvements.

The “action” scenario also calculates an environmental benefit of more than 200 gigatons of carbon dioxide being prevented from entering the atmosphere over the next 25 years. Two-thirds of this reduction comes directly from the greater investment in renewable energy, while the remaining one-third is generated by energy-efficiency improvements.

As the environmental and economic evidence mounts, the climate-response message is taking root. Nearly four out of five (79%) of residents now say that global warming is a very serious or somewhat serious threat to California’s future and quality of life, according to a Public Policy Institute of California survey released in July.

State and Local Governments Respond

Mindful of the loudly ticking clock on climate strategies, the Legislature is working to pass two laws that would codify the Governor’s executive order B-30-15: SB 32 (Pavley) would set statewide greenhouse gas reduction targets to 40% below the 1990 level by 2030 and 80% below the 1990 level by 2050. SB 350 (De Leon) would require that 50% of electricity come from renewable energy, petroleum use in motor vehicles be cut by 50%, and the energy efficiency of buildings be doubled by 2030.

These ambitious and laudable goals come at a time when California’s population is growing. By 2050, California’s population is projected to reach 50 million. That would be a growth of about 11 million people over the next 35 years. This will lead to increased demand in all areas of infrastructure and public services – including intertwined impacts on education, transportation, housing, water, public health and even the prison system.

Accommodating this growth while achieving the state’s ambitious environmental and economic goals will require dramatic shifts in the way we plan communities over the next 35 years. And much of those efforts will need to take place at the local level.

Local land-use planning, community services, climate and energy initiatives, and infrastructure decisions ranging from road repairs to stormwater and forest management will increase or degrade our capability to reach our local and statewide climate goals.

Local governments play a key role in all of these activities, but the challenge comes at a very difficult time financially:

• State and federal aid to California cities is declining, down from an average of 21% of a city’s budget in 1974-75 to 10% today.
• The sales tax base is declining, due to a shift toward a service-oriented economy and increasing online and catalog retail sales.
• The capacity for cities to impose taxes and fees are limited by Proposition 13 and Proposition 218.
• The state’s population growth rate is higher in cities, putting even more stress on already strained urban infrastructure.
• Cities must respond to the public demand for a greater array of services (high tech, cable, transit, etc.), which bring additional costs and new challenges.
• Spending for public-safety services is up.
• Infrastructure improvements and maintenance (often already long deferred) are lagging.

These fiscal obstacles don’t undermine the importance of acting on climate change. We can, and must, reduce our pollution and increase the resilience of our communities – starting now. However, it does mean that communities are going to have to be much more creative. Every public dollar spent must achieve multiple goals and leverage additional resources.

The Market for Shared Mobility, Shared Community Benefits

As funding for local governments dries up, the private sector is paying attention to new trends and responding en force. Transportation is one sector where private companies have found large untapped markets.

Uber is running a $40-billion organization without any cars at a time when transportation funding (in real dollars) is at an all-time low. While astonishing, this should be no surprise given the pent-up demand from one of our largest generations. Millennials have the lowest percentage of people who like driving than any other generation: 83% of Millennials like walking, and they also have a much higher percentage of transit use (40% took transit last month).

Car-share companies are picking up on these preferences, and using technology to connect people to their destinations, to transit (by filling first-mile/last-mile needs) and to other riders through carpool services.

The number of car-share vehicles has risen in the U.S. from less than 700 in 2003 to more than 19,000 in 2014 (Shaheen and Cohen, 2014) – a nearly three-fold jump. And even before rideshare companies started carpooling efforts, they have had significant impacts.

A 2008 survey on carsharing in North America (Martin et al. 2010) found that:

• Between 9-13 vehicles were removed, including postponed purchase of 4-6 vehicles sold due to carsharing, with 25% sell, 25% postponed.
• An annual VMT reduction of 27-43%.
• A 34-41% annual reduction of greenhouse gas emissions per household.
• U.S. households saved $154-$435 monthly per capita after joining carshare.
• More users increased their overall public transit and non-motorized modal use (including bus, rail, walking and carpooling) than decreased it.

Ingenuity in the transportation sector is critical. Because our growing population is travelling on roads that are in severe need of repair, we will need to implement every solution we can come up with to get more people out of cars and assure the cars on the road are carrying more passengers. To put one price tag on the problem: It would take an estimated
$533 billion to expand roadways and relieve severe congestion in U.S. urban areas.

Currently, 80% of seats on the road are empty, and 5.5 billion hours are wasted by urban Americans each year due to road congestion. Fewer than 50% of Americans live within a one-quarter mile walking distance of a transit stop, limiting the number of people who could viably switch from driving to public transit.
Expanding alternative transportation and ridesharing strategies can increase access to existing transit and help alleviate traffic congestion.

More than 20% of their rides in the San Francisco Bay Area start or end near a BART or Caltrain stop, according to Lyft. Lyft Line (their carpool service), launched only one year ago, already makes up more than 60% of its rides in San Francisco; and 90% of Lyft rides have someone else taking the same trip within five minutes (highlighting a potential for increased carpooling).

Local governments are seeing these shared-mobility platforms as an opportunity to leverage private-sector investment and a growing market to achieve community goals.

Transit agencies across the country are trying to solve the first-mile/last-mile riddle. Dallas Area Rapid Transit (DART) is working with Uber to connect more users to their existing transit services. DART is helping travelers connect with Uber through its GoPass(SM) mobile ticketing app. DART says this type of connection makes it easier for travelers who begin or end their trips in places not easily served by DART to use a train or bus for the longest portion of their trip.

Car shares are one of many strategies that could be considered to better connect a transportation network that can meet the needs of all residents. The City of Davis is talking with Lyft about providing service over the consistently congested causeway between Davis and Sacramento. Meanwhile, researchers are looking into the potential for setting up subsidized car-share rides to serve low-income residents in transit deserts.

PACE Brings New Energy to Retrofitting Old Buildings

Property Assessed Clean Energy (PACE) providers have financed more than $784 million in residential energy-efficiency and renewable-energy projects across California in the last three years. HERO – the largest PACE provider in California – alone is at work in over 320 cities and available to more than 75% of California’s housing units.

So far, a total of 32,229 residential projects have been completed, with $626.8 million in funded projects. Another $3 billion has been approved for new projects. For commercial buildings, 16 projects ($2.9 million) are in process or have been funded. Another 37 projects, totaling $6.5 million, have also been approved.

PACE programs can help achieve the goals of doubling energy efficiency and increasing renewable energy use by 50% by providing financing for energy-efficiency, renewable-energy and water-conservation improvements that is repaid (through the energy savings) on a building owner’s property tax bill.
PACE programs operate in partnership with local governments. They offer significant community benefits that cities can work to expand through community outreach and education, pairing with local or utility rebates and partnering on other community goals. For example, local governments can highlight water measures that can be financed to help achieve local water-reduction targets.

Inventing a Vision for Tackling Climate-Change

As the old proverb reminds us, “Necessity is the mother of invention.” We know we’re at a point where acting on climate change is an inescapable and necessary imperative.

The solutions can’t focus solely on what we need to give up, however. We need a vision that’s worth working toward, not just climate impacts that we’re fighting against. By working to establish new partnerships across jurisdictions and between the public and private sectors, local governments can optimize community benefits from limited resources – from shared mobility to zero-net energy buildings. We can, and must, plan for a tomorrow that’s worth working for – together, today.

Resources

CivicSpark is a Governor’s Initiative AmeriCorps program dedicated to building capacity for local governments to address climate change in California, administered by the Local Government Commission in partnership with the Governor’s Office of Planning and Research. For information on how CivicSpark can assist you with your climate initiatives, contact Kif Scheuer at kscheuer@lgc.org or visit www.civicspark.lgc.org.

Statewide Energy Efficiency Collaborative (SEEC) provides no cost support to cities and counties to help them reduce greenhouse gas emissions and save energy. SEEC is an alliance between three statewide non-profit organizations (LGC, the Institute for Local Government and ICLEI) and California’s four Investor-Owned Utilities. For more information, contact Julia Kim at jkim@lgc.org or visit www.californiaseec.org.