No More One-Size-Fits-All Approach to State Climate Targets
States can set unique actionable, ambitious, and achievable climate goals, and we’ve identified them.
The next four months may prove pivotal in America’s progress toward its 2030 climate goals under the Paris Agreement. Nearly every state is in the process of identifying or refining its plans for cutting emissions as part of the Inflation Reduction Act’s (IRA’s) Climate Pollution Reduction Grants (CPRG) program, which requires a preliminary plan in March. This program requires states to set near-term and long-term emissions reduction targets consistent with US commitments globally. To make their plans effective, states can identify climate targets that fit within an actionable, ambitious, and achievable (AAA) framework:
- Actionable: The targets reflect today’s emissions breakdown, rely on clear actions within the state’s control, and focus on specific emissions sources without including emissions sinks, such as existing forests that can be challenging to address.
- Ambitious: The state goals contribute a fair share to achieve national climate goals.
- Achievable: The state can move from where it is now to the target, on time, considering the deployment rates of different technologies within different sectors.
All three elements are critical for success and help state leaders avoid the trap of setting a target first and determining the best path to achievement later without examining if the target is appropriate for the geography or timeline. However, establishing AAA targets requires significant amounts of subsector-level data, projections, and the ability to model cross-sector interactions.
By using the state-level Energy Policy Simulator (EPS) models and applying the AAA framework, RMI has identified an emissions reduction target that accounts for each state’s unique makeup and contribution. These 2030 targets vary widely, reflecting the wide range of near-term potential for deep emissions cuts. These dynamics are critical to consider when prioritizing action across the country, including in the award of CPRG funds.
States can follow a few core principles to calculate AAA targets
RMI’s analysis reveals several core insights when it comes to setting actionable, ambitious, and achievable state-level emissions reduction targets.
First, targets are more actionable when based on current emissions, not historic, 2005-era emissions. The national target is based on a 2005 baseline, and many states follow suit, using a decades-old baseline year, such as 2005, 2006, or even 1990, when setting emissions reduction progress for the future. However, reconstructing an emissions baseline for these years is fraught with data challenges, including adjusting older emissions inventories to account for overlooked sources of emissions or as methodologies evolve over time. Additionally, while the emissions changes over the past decades in each state may be informative, they ultimately confuse the actions that are required moving forward. Target setting is most effective when focused on the actions each state needs to take from present emissions to achieve the national emissions goals.
Note: in certain cases, it may be beneficial to use a 2005 target, especially when showcasing progress-to-date on reducing emissions and where data availability is less of a challenge. For example, a 2005 target can help investors understand the range of progress across utilities when making an investment decision.
Second, targets are more actionable when they exclude carbon sinks from calculations when setting targets. The national target includes natural carbon sinks that are distributed unevenly across states. The existence of carbon sinks like existing forests or peatlands is not necessarily actionable and can often complicate calculations on near-term emissions reductions.
Third, targets can be considered ambitious when they do at least their fair share to achieve national emissions targets. Applying these first two principles to the national 2030 emissions target, the target becomes about 4 gigatons of total CO2 equivalent emissions in 2030, or a 35 percent reduction from the emissions reported in the most recent national inventory (2021). For state targets to be ambitious, they need to add up to this national target.
Fourth, targets will be more achievable when they account for different sectors decarbonizing at different speeds. While it may seem straightforward to apply the 35 percent reduction target evenly across states, this approach is neither fair nor efficient. This is because decarbonization is not a single problem, but a series of challenges that differ by sector and subsector. The timelines for retiring and replacing coal plants are distinct from the timelines for installing heat pumps, selling electric vehicles, and retrofitting diverse industrial facilities.
Importantly, phasing out coal generation in a cost-effective way is one the most significant ways to reduce emissions by 2030. States with coal fleets are also well positioned to access recently expanded tax and financing incentives tailored to help fossil-heavy utilities bring down customer costs by building clean generation to burn less fossil fuel. But when downscaling to states, the impact of this national action is very different. For example, Vermont has no remaining fossil plants, while 50 percent of West Virginia’s emissions come from coal mining and combustion. The same national target (phasing out coal plants), applied evenly across states, has dramatically different results depending on the current energy system of each state.
In contrast, reductions in buildings and transportation emissions typically require shifting hundreds of thousands to millions of units from combustion to electrification. Each gasoline car on the road, or furnace installed, will last for 15 to 20 years, pumping carbon into the atmosphere, even if all new sales are electric going forward. For short-term goals, this multi-decade lag is a substantial barrier to deeper emissions cuts.
To illustrate the differing pace of each sector, it’s helpful to understand how emissions reductions are distributed in the US NDC scenario, which was designed to achieve the US NDC goals. Electricity leads the pack with the most emissions reductions by 2030, with transportation lagging due to the long lifetime of the existing fleet of combustion vehicles.
As a result, states with more emissions from faster-moving emissions categories, such as electricity, will be able to demonstrate greater near-term emissions reductions than regions with a greater proportion of slower-moving sectors.
Achievable state targets require a bottom-up approach, all the way down to the billions of physical machines that need to be replaced and retrofitted by 2030. This requires detailed energy and emissions data for each state.
RMI has done the math to set AAA targets
Over the past three years, RMI and Energy Innovation partnered to build state-specific Energy Policy Simulator (EPS) models for the lower 48 states that help states assess the environmental, economic, and health impacts of diverse state energy policies. State and federal decision-makers may freely use the EPS to set targets, explore solutions, and prioritize and quantify GHG-reducing measures within their CPRG plans.
Using the EPS models, RMI recently developed climate scorecards for 20 states, a detailed sector-by-sector analysis that identifies the gaps between each state’s decarbonization progress and a target compatible with achieving the US NDC. When building these scorecards, we were faced with the challenge of how to set state-specific targets to determine if there are gaps between current policy and NDC alignment. The policy scenario underlying the NDC-aligned targets details a set of specific policy interventions that, when taken by all states, achieves the US NDC targets. The scenarios include a detailed set of about 30 policies driving decarbonization across all sectors.
We applied the NDC policy scenario to each state-specific model and calculated the resulting economywide emissions reductions in 2030 relative to a 2021 baseline. One exciting feature of this approach is that we know exactly what set of policies and actions can achieve the emissions reductions, though multiple pathways could be used to achieve them.
The results tell a clear story. The same policy pathway has an uneven impact — about half the states reduce emissions by a greater percentage than the national average, while the other half reduce emissions by less than the national average. States with lower percentage targets have a higher proportion of emissions coming from slow-moving sectors. In contrast, on the high end are states that have more emissions from fast-moving sectors and sources.
Some states that have lighter goals for this decade are in that position because they already took action previously to embrace clean energy. This rightfully makes their 2030 goals easier to achieve — and also means that they have more opportunity to exceed those goals and be an ambitious leader.
My state already has a target. Is it too high, too low, or too slow?
States such as Washington, Colorado, Massachusetts, Maryland, and many others have set ambitious, legislated goals to cut emissions roughly in half by 2030 relative to 2005 or a comparable year. These targets, especially for states that are dominated by emissions sources with long equipment lifetimes, may be more ambitious than RMI’s analysis. If these states are able to meet the legislated targets they have set, they will be the true climate leaders that help tip the balance and bring the United States closer and closer to its NDC target.
To understand the best policy pathway to meet their target, states should consider creating sector-specific emissions reduction targets that account for different sectoral speeds — checking that these targets add up to the economywide goal. If a state finds its legislated goal is out of reach, it will need a plan in place to address the gap. But the key insight is to break the problem down by sector and subsector to determine if each piece of the puzzle is on track to decarbonize at the pace needed.
For states with existing targets that are lower than RMI’s analysis (or without targets), policymakers can work with other stakeholders to align on ambitious legislated targets that do their fair share to meet US climate goals, considering the state’s unique mix of faster-moving and slower-moving sectors. RMI’s targets can serve as a helpful starting point.
States have the information at hand to set AAA climate targets
By using AAA target setting, states can develop climate action plans that are primed for success. In addition, the EPA has an opportunity to consider these AAA targets to award competitive implementation grants to states in a way that most effectively helps the United States reach its NDC.
Once states have set targets that are achievable, ambitious, and actionable, the next step is to identify and prioritize the highest impact actions to achieve them. RMI has identified these highest impact actions in 24 states. With the right information, US states can help the United States reach its global climate commitments.
This work was made possible by generous support from Bloomberg Philanthropies.
Acknowledgements
The authors would also like to acknowledge Jacob Corvidae and Ben Feshbach for their valuable feedback and insights.