California Climate Challenge Methodology April 25, 2013 Feebates Semi Truck Fuel Efficiency Pay- As- You- Drive Insurance Gas Tax Parking Prices Give a rebate to owners of more efficient vehicles while charging more for owners of less efficient vehicles. Increase fuel efficiency of heavy- duty semi trucks by 20%. Create a system of pay- as- you- drive car insurance, which charges rates based on how much, when, and what vehicle you drive. Increase fuel taxes, which are added on to the price of gasoline and diesel fuel at the pump, by 40 cents per gallon. Increase on- street parking fees by $1.00 an hour in urban areas. Methodology: Estimates of the effects of the feebate program are derived from research done for ARB by researchers at the UC Davis Institute of Transportation Studies. Our example assumes a rate of $20 per gram per mile, which is used to calculate fees and rebates. Additional information about feebates is available in the UC Davis Report. Methodology: Estimates of current and future truck travel were obtained from Caltrans Motor Vehicle Fuel, Stock, and Travel Report. Assumed the average diesel truck engine lasts 30 years and that each truck travels about 100,000 miles per year. Note that a similar measure has been implemented by the federal government. Methodology: Estimates for this measure are based on the Brookings Institute report Pay- As- You- Drive Auto Insurance: A Simple Way to Reduce Driving- Related Harms and Increase Equity (July 2008). Methodology: Estimates of the effect of a gasoline tax on driving were derived from economic studies, including the following: E. Spiller and H. Stephens, The Heterogeneous Effects of Gasoline Taxes: Why Where We Live Matters, Resources for the Future, July 2012, and I. Parry, How Should Heavy- Duty Trucks Be Taxed? Resources for the Future, April 2006. Methodology: Estimates are based on a review of the literature done by ARB on the VMT effects of parking pricing and modeling of future parking programs by Blue Sky Consulting Group. Additional sources include the following: Stecker, Tiffany. "Reducing Parking Spaces Helps Cities Cut Auto Emissions: A New Study Shows Economic And Policy Changes That Limit Parking Have Significantly Reduced Miles Driven In 10 European Cities." Scientific American. January 24, 2011; Kodransky, Michael & Hermann, Gabrielle.
Congestion Charges High- Speed Rail Employer- based Trip Reduction Transit Services Tele- commuting Charge (higher) tolls during peak periods on congested highways and arterials in order to reduce congestion. Build a high- speed rail network that links California s major cities. Require large employers to provide bus services or carpool vans to employees. Increase subsidies to municipal and regional transit systems that provide bus, rail, and ferry services by 15 percent. Create a California Telework Resource Center "Europe s Parking U- Turn: From Accommodation to Regulation." Institute for Transportation and Development Policy. Spring, 2011; and Shoup, Donald. "Cruising for Parking." Access. No. 30, Spring, 2007. Methodology: Assumptions regarding congestion charges and their effect on driving were derived from reports on actual experience with congestion charges in various urbanized areas and the Texas Transportation Institute s biennial report on congestion levels in urban areas. Methodology: This measure is based on California High Speed Rail Authority projections, but the system is assumed to be built by 2020, which is much sooner than the actual construction schedule. The results presented assume the current $13.2 billion ($10 billion state, $3.2 billion federal) public subsidy is the only subsidy that the system will require and that all other costs will be paid with fare and concession revenues. It should be noted, however, that the remaining funding sources have not yet been identified. Methodology: Based on the impact and costs of Washington s Commute Trip Reduction program and modeling of a California program by Blue Sky Consulting Group: Specifically, the annual VMT reduced per employer site, cost per employer site, and the growth in these amounts over the ten year period from 1995 to 2005 based on Washington experience. Methodology: Estimates of the effect of increased transit investment are based on Caroline Rodier s analysis combined with modeling of SB 375 s impact of regional plan transit investments by Blue Sky Consulting Group. The cost is based on the 4 largest California regional transportation plans investments in transit, with the assumption that SB 375 is associated with a 15% increase in investment. Regional plans included are SANDAG, SCAG, MTC, and SACOG. Historical effect of transit and proximity to transit is based on research conducted by PPIC. Methodology: Estimates of the effects of telecommuting on trip reductions are from a review of the literature conducted by ARB combined with additional research by Blue Sky 2
Bicycling Commercial Solar A Million More Solar Roofs to provide consulting services and resources to employers to begin or expand telecommuting programs. Double the amount of bike lanes in California's cities in order to increase the number of bicycle commuters. Provide a tax incentive for commercial buildings to install solar systems. Double the Million Solar Roofs program to Consulting Group, including a review of a report prepared for the New York City Department of Transportation. Methodology: Estimates of the effects of bike lanes on the number of bicycle commuters are based on a review of the literature and modeling of a California program by Blue Sky Consulting Group. Specifically, our model assumes that doubling the amount of bike lanes per square mile in urban areas would cause a 25% increase in bicycle commuting. In addition, we assume California cities currently average one mile of bike lanes per square mile (based on the Los Angeles 2010 Bicycle Plan, which indicates that Los Angeles has a lower than average level of bike lanes at 0.73 miles per square mile) and that eight miles per square mile is the saturation point at which an urban area can realize the full 10% reduction in VMT based on the density of bike lanes in bike- friendly cities like Davis, CA. In calculating the cost to build a mile of bike lane infrastructure, San Francisco was considered to represent the most expensive third of the state's urban area while Los Angeles represented the remaining 2/3. Methodology: Assumes average installed cost is $3.75/Watt for solar panels (10% below current commercial- scale cost, based on data from the U.S. Solar Industries Association). Assumes the average commercial space consumes 14 kwh/year/square- foot. Data on building electricity consumption is from EIA, 2003 CBECS Survey (2008). Further assumed that 4% of California s commercial space would install solar panels between 2015 and 2019, displacing 2.3 billion kwh per year of electricity consumption. The up front cost of the subsidy is about $2.7 billion. Reported cost is annual debt service on the cost of system installation, assuming a 25 year loan at 5%/year. Methodology: Estimates are based on an installed cost of $4.55/Watt for residential solar photovoltaic systems, which is about 10% lower than the recent average cost of these 3
Home Energy Efficiency Time- of- Day Electricity Pricing subsidize installation of another million solar roofs on residential buildings. Provide incentives to retrofit one million older homes to current insulation, window, and energy efficiency standards. Instead of paying a single price for electricity regardless of the time of day, households and businesses would be charged higher rates during periods of high demand (for example, summer afternoons) and lower rates during periods of low demand (for example, nights and weekends). systems, based on data from the U.S. Solar Industries Association. Annualized costs are reported for debt service on the government subsidy. The remaining cost is assumed to be paid willingly by households and is not included in the cost for this measure. Additional assumptions: 70% of electricity is replaced by solar, $100/month average electricity bill, household 3.33 kw system, $15,600 installed cost, one- third of cost paid by government subsidies. CO 2 reduction: Average of 2700 lbs/year per house, 25- yr equipment life, debt service assumed to be paid back over 25 yrs at 5%/year, 1 million solar homes by 2020, cost in 2020 is assumed to be the debt service on gov t subsidy for those 1 million installations. Methodology: Estimated primarily based on Lawrence Berkeley Lab's "Home Energy Saver" online calculator using default assumptions for a pre- WWII 1800 sq- ft home. Cost for window replacement assumed to be $10,000 (roughly the cost to replace all the windows in a typical home with vinyl Energy Star windows). Retrofit cost estimate equals $18,000/home. Assumed government subsidy would cover half of this (annualized cost of $580 million/year for debt service on the subsidy, over a 30- year period). Methodology: Assumes a 5.7% reduction in total electricity usage, based on data from a number of pilot programs and data on electricity usage in California. Results assume that the average cost per unit of electricity stays the same. The savings is due to lower total electricity usage induced by time- of- day pricing. However, there might be offsetting costs of buying more efficient appliances and equipment and retiring existing equipment before the end of its nominal useful life. We did not attempt to analyze these second order impacts, and they are not included in the cost estimate. 4
Land- Use Mix Require new residential housing developments to be located near neighborhood centers that include amenities such as grocery stores, restaurants, parks and libraries. Growth Adopt an Urban Boundary Growth Boundary beyond which future development would be prohibited, thereby increasing the height and density of buildings within Transit- Oriented Development Subdivision Density the boundary. Exempt developers from California Environmental Quality Act (CEQA) regulations if they construct mixed- use buildings within a half- mile of a major transit stop or well- served transit corridor. Create a revenue neutral, sliding scale density Methodology: Estimates of the effects of mixed- use development are from a meta- analysis conducted by Ewing and Cervero in 2010 combined with modeling of a California program by Blue Sky Consulting Group. Methodology: Estimates of the effects of increased residential and job density are from a meta- analysis conducted by Ewing and Cervero in 2010 combined with modeling of a California program by Blue Sky Consulting Group. Methodology: The policy is assumed to be implemented in 2012 and to result in 30,000 additional units of transit- oriented development housing by 2020. People who move into these developments are assumed to reduce their annual VMT by 5,000 miles per year (about 22% relative to household average VMT). Methodology: Policy is assumed to be implemented in 2015 and about 860,000 units are assumed to be constructed and occupied by 2020. This number of units is based on the 5
Green Vehicle Fleets Government Building Energy Efficiency Energy Efficiency development fee in which developers pay to build lower density single- family residential subdivisions and get a rebate to build dense or multi- family developments. Require state and local governments to purchase only plug- in hybrid or electric vehicles (unless public safety or other obstacles prevent such a purchase). Require all state and local governments to upgrade existing government buildings to meet 80% of current building energy efficiency standards, known as Title 24. Require all state and local governments to University of Pacific forecast of housing starts for 2015 and 2016 (plus trend assumptions through 2019). Households baseline annual VMT was determined from the National Personal Transportation Survey and is assumed to be reduced by 5% due to the density policy. The effect of density on VMT reduction is based on a meta- analysis by R. Ewing and R. Cervero, Travel and the Built Environment, Journal of the American Planning Association (2010), which estimated that doubling density is associated with 4% decrease in VMT. Methodology: The state government fleet size was estimated by the California Air Resources Board. The number of cars in local government fleets was estimated by scaling up fleet data for a few representative California local governments. Plug- in Hybrids (PHEVs) were assumed to cost $10,000 more than a comparable conventional vehicle. For fuel savings, we assumed that PHEVs operate 60% of the time on gasoline and 40% of the time on electricity and that the average PHEV consumes 30 kwh of electricity per 100 miles when operating on electricity, at a cost of $0.13/kWh. Methodology: Since data are not readily available on the energy use or energy savings available from upgrading many state and local buildings, we assumed that state and local buildings use energy at the average rate for commercial buildings in California, that upgrading to full Title 24 standards would result in a 40% reduction in energy use, and that this measure would result in a 32% reduction in energy use (a 32% reduction is 80% of a 40% reduction). Based on available estimates, we assumed the cost of the upgrade would be $2.50 per square foot and that this cost would be paid through a 30- year loan at 5% interest. The net cost estimate for this measure results from the cost of debt service on the loan that covers the cost of the retrofits minus the savings on electricity and natural gas usage in the upgraded buildings. Current energy use in government buildings was estimated from Federal Government s 2003 Commercial Buildings Energy Consumption Survey data. Methodology: Since data are not readily available on the energy use or energy savings available from upgrading many state and local buildings, we assumed that state and local 6
Green Buildings Cap- and- Trade upgrade existing government buildings to fully meet current Title 24 standards. Require all state and local governments to exceed current Title 24 standards by 25% when constructing new buildings. Implement a cap- and- trade program in which certain industrial sectors face an overall limit on carbon emissions, but facilities subject to the cap will be able to trade or sell their surplus emission permits to other users if they buildings use energy at average rate for commercial buildings in California and that upgrading to full Title 24 standards would result in a 40% reduction in energy use. Based on available estimates, we assumed the cost of the upgrade would be $4.50 per square foot and that this cost would be paid through a 30- year loan at 5% interest. The net cost estimate for this measure results from the cost of debt service on the loan that covers the cost of the retrofits minus the savings on electricity and natural gas usage in the upgraded buildings. Current energy use in government buildings was estimated from Federal Government s 2003 Commercial Buildings Energy Consumption Survey data. Methodology: Due to a lack of data on the difference in energy use between an average existing building and a building meeting Title 24 standards, we assumed government buildings meeting Title 24 standards use 40% less energy than the average commercial building in California. Buildings required to use 25% less energy than a Title 24- compliant building would then use 55% less energy than an average build. (Going from a 40% reduction to a 55% reduction represents a 25% improvement.) We assumed the marginal cost of these additional improvements would be $9 per square foot, based on estimates of the marginal cost of LEED gold and platinum certification. We further assumed that the square- footage of new government buildings built under this measure would, by 2020, equal 5% of the current total stock of state and local government buildings in California. Methodology: Assumes an average cost of $20/ton for reducing emissions in 2020. Emissions reductions estimates based on CARB analysis. This measure is part of CARB s AB 32 Scoping Plan and has already been implemented. 7
Carbon Tax Renewable Energy More Trees reduce emissions below their facility s emissions cap. Institute a carbon tax on the energy used by commercial and industrial users. Increase electricity generation from renewables (e.g., wind, solar, biomass, and geothermal) from the current requirement of 20% up to 33% of total electricity generation. Plant 10 million trees in urban areas by 2020. Methodology: Economic theory suggests that, given similar conditions and program structure, a carbon tax and a cap- and- trade program should produce similar results. Thus, given the same cost per ton, a cap- and- trade and a carbon tax are assumed to result in similar emission reductions. Methodology: Annualized cost is from CARB s AB 32 scoping plan. Emission reductions are from CARB s 2011 update of projected emission reductions in 2020 due to increasing the RPS from 20% to 33%. This measure is part of CARB s AB 32 Scoping Plan and has already been implemented. Methodology: Estimates of the effects of tree planting are based on estimates prepared for The Million Trees Los Angeles initiative extrapolated to reflect statewide results. Specifically we assume that 10 million trees would be planted statewide, that trees will be planted in urban areas in close enough proximity to buildings so as to affect the amount of annual heating and cooling those building require, that the trees planted will absorb the same amount of CO2 and provide the same energy- saving and environmental benefits each year. Tree planting is assumed to cost $15 per new tree and $37 per year for maintenance. Also assumes a benefit of 0.1511 metric tons of CO2 equivalent per year per tree. These values are weighted averages from the studies reviewed. Further assumes that full benefit is achieved in 2020, though most types of trees would not be full grown at this point. CONTACT: Please contact Next 10 at sarah@next10.org or call 415-957- 0202 x11 with questions on our methodology 8