Energy Transition

California’s road map to net-zero can be a blueprint for other regions

California coastline.

We must pursue carbon neutrality with unprecedented urgency and commitment. Image: Unsplash.

Pedro J. Pizarro
President and Chief Executive Officer, Edison International, and a Vice Chairman, Edison Electric Institute
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  • Climate warnings from the IPCC highlight the urgent need to cut global emissions.
  • The US state of California is making great strides towards decarbonizing energy.
  • Greater investment is needed to scale up and accelerate the pace of electrification.

A sub-headline in a New York Times story on the sobering report from the United Nations Intergovernmental Panel on Climate Change (IPCC) on climate adaptability declared, “Countries aren’t doing nearly enough to protect against the disasters to come as the planet keeps heating up.”

For those of us working to mitigate and adapt to the looming effects of climate change, the study reinforced how critical our mission is.

In November, at the UN Climate Change Conference of the Parties (COP26), I observed a palpable sense of urgency to act now. We have the same urgency in California, where Edison International and our utility subsidiary, Southern California Edison (SCE), along with our global energy advisory subsidiary, Edison Energy, are supporting transportation and building electrification as key tools to decarbonize the economy. I am reassured that the global community, in many ways, is aligned with the direction that California is already headed.

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When you add it up, both the formal and informal commitments that emerged from COP26 are expected to limit the world to a 1.8°C temperature rise. It’s not the international target of 1.5°C, yet neither is it 2.0°C.

Making commitments is one thing – successfully executing against them is entirely different. In addition to the humanitarian considerations, the war in Ukraine has its own repercussions for the energy industry and may temporarily slow some of the commitments made in Glasgow. However, the energy implications might accelerate Europe’s migration to renewables.

California's progress on climate goals

At this juncture, our experience in California is especially relevant. In my six years as President and CEO of Edison International, we’ve produced five policy papers to identify actions and policies needed to achieve California’s greenhouse gas (GHG) emission reduction goals at the lowest cost to the entire state economy.

SCE’s first paper examined how to achieve California’s 2030 GHG emissions reduction goal. SCE followed in 2019 with Pathway 2045, a blueprint of feasible and economic steps that California could take to achieve its 2030 and 2045 goals for a clean energy future. In December 2020, SCE published Reimagining The Grid, detailing how the grid will need to evolve to accommodate the economy-wide electrification needed to reach those goals. A few weeks before Glasgow, Edison International released Mind the Gap, which provides recommendations of market-transforming policies and incentives needed within the next 18 months if California is to meet its 2030 targets.

Last month, SCE became the first investor-owned utility in California to release a climate adaptation and vulnerability assessment (CAVA). An associated Edison International white paper, Adapting for Tomorrow: Powering a Resilient Future, identified at-risk assets, operations and services and respective adaptive mitigations from increased temperature, sea level rise, freshwater flooding, drought (yes, we expect both floods and droughts) and wildfire.


How is the World Economic Forum facilitating the transition to clean energy?

We have followed analysis with execution. SCE, which serves 15 million people in the region, has embarked on America’s largest utility-based initiative for electric vehicle (EV) charging infrastructure and recently applied for approval to reduce the use of carbon-emitting fossil fuels in buildings through the installation of about 250,000 electric heat pumps instead of gas heating, ventilation, and air conditioning (HVAC) equipment across its service area. The California Energy Commission’s 2021 Integrated Energy Policy Report recommended installing at least six million heat pumps statewide by 2030, although that number falls short of the 10.5 million that our gap analysis indicates is needed by the end of the decade.

The Edison Electric Institute (representing US investor-owned electric companies) is also facilitating meaningful progress with the recently launched National Electric Highway Coalition. Power providers across the country, including Edison International and SCE, formed the coalition to provide fast-charging infrastructure along major US travel corridors by the end of 2023.

A net-zero carbon economy is achievable, although it won’t be easy. In California alone, Pathway 2045 analysis estimates the state will need up to $250 billion between now and 2045 to add 80 gigawatts of bulk renewable power and 30 gigawatts of utility-scale storage, plus the grid enhancements needed to support all of that. Our state’s economy will require further investments for clean end-use electrification technologies.

What more can governments do?

California Governor Gavin Newsom submitted a 2022 budget proposal with funding to help get the state on track to meet its goals. We support the significant funding requests for clean energy and electrification investments, such as energy storage, pollution-free mobility and building electrification. I am especially pleased to see almost $1 billion earmarked for building decarbonization, which will scale up and accelerate the pace of electrification.

The investment will be well worth it: once we get to net-zero, Pathway 2045 projects that the average California customer will spend one-third less on their total consumption across all forms of energy than they do today. We are heading in the right direction with a range of initiatives and incentives that could serve as a blueprint for other regions around the US and internationally.

In fact, countries like Denmark, Luxembourg, Switzerland, the UK and France have made significant strides toward decarbonization. By 2030, 64% of the European Union’s emissions reduction will be achieved by large-scale electrification and increases in energy efficiency, accounting for 47% and 17%, respectively, according to a recent McKinsey study.

The IPCC report painfully illustrates the cost of inaction. Societies around the world must reduce emissions at a much faster rate than ever before to mitigate the most severe impacts of climate change and adapt to the effects that are no longer avoidable. Together, we must pursue carbon neutrality with unprecedented urgency and commitment. Whatever the politics, the tangible steps we’re taking in California to decarbonize the economy can serve as a practical road map for what happens elsewhere.

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