On August 25, the California State Assembly Committee on Utilities and Energy hosted an informational hearing “Beyond New Construction: Decarbonizing California’s Existing Building Stock,” which delved into the many issues, barriers and opportunities surrounding the state’s move to reduce fossil fuel emissions in the housing and building sectors. The hearing featured a panel of experts, including Michael Wara, Director of the Climate and Energy Policy Program (CEPP) at the Stanford Woods Institute for the Environment.
Residential and commercial buildings account for about 25% of the greenhouse gas (GHG) emissions in the state. Building decarbonization, which is the process of reducing GHGs from buildings, can include everything from energy efficiency improvements, getting rid of natural gas in buildings, and reducing energy usage. Though much of the focus has been on new construction, most of California’s housing stock was created before 1980 and is not in keeping with modern building energy efficiency standards.
“The question today is how can we reduce emissions from our existing buildings, and what are the challenges ahead?” asked Assembly Member Chris Holden, who chairs the Assembly Committee on Utilities and Energy, in his opening statement.
“In order to achieve our ambitious climate goals, we have to take bold actions, and we must begin or continue to decarbonize our existing building stock,” said Assembly Member Luz M. Rivas, Chair of the Assembly Committee on Natural Resources, emphasizing the need to address emissions at all buildings and housing in the state.
In a recent whitepaper “The Costs of Building Decarbonization Policy Proposals for California Natural Gas Ratepayers: Identifying Cost-effective Paths to a Zero Carbon Building Fleet,” Alison Ong, Ph.D. student in the Emmett Interdisciplinary Program for Environment and Resources, Michael Mastrandrea, Research Director at CEPP, and Wara quantified the potential increases in residential natural gas rates associated with building decarbonization approaches being considered by California policy makers. Focusing on existing buildings brings both greater emissions reductions, but also greater energy rate increases. The study warns that many options pose serious long-term affordability challenges to consumers, exacerbating existing affordability issues for lower income communities. However, the study also finds that strategically shrinking the size of the natural gas distribution system while moderating rate increases could be a promising path forward.
“Our conclusion and recommendation is that branch pruning or strategic decommissioning is really the best strategy at this point in time to examine,” said Wara. “We should be looking for opportunities within the gas system to avoid investments that are upcoming, select areas where decommissioning could occur and assist homeowners and commercial entities to make the transition as necessary.”
A webinar featuring Stanford researchers in June presented the research and discussed identification of targeted geographic areas for decarbonization as a preferred strategy from a cost and emissions perspective. The research team previously conducted a legal analysis of this approach and provided suggestions for removing barriers.
“We argue that even as we see cost effective pathways to move forward, it’s important that the state, the PUC, the Energy Commission, partner with communities to make sure that these choices are taken in partnership with an opportunity to have public discussion and debate,” said Wara, highlighting the need to include those most impacted in the decision-making process.
In July, the California Energy Commission released the AB 3232 California Building Decarbonization Assessment Report outlining key strategies for decarbonizing existing building stock, including building electrification, energy efficiency improvements and decarbonizing the gas system. Overall, discussion at the hearing centered on the need to address decarbonization with an eye toward equity, cost-effectiveness and feasibility.
“We’ve done this before in California. There are numerous examples from history, most notably the transition from manufacturer gas to natural gas where major interventions by utilities were made to switch the way that energy services were being provided to residential and commercial customers. There are precedents there. They’re challenging. They require significant effort and coordination between local government, utilities that serve customers and the state,” said Wara. “And we’re hopeful that can occur, and that we can see a future where buildings are doing their part to help us achieve our 2030 and 2045 climate targets.”
Other experts on the panel represented an array of housing, energy, and government stakeholders and included Andrew McAllister, Commissioner of the California Energy Commission, Jose Torres, California Director of the Building Decarbonization Coalition, Srinidhi Sampath Kumar, Sustainable Housing Policy and Program Manager for the California Housing Partnership, Joshua Greene, Corporate Vice President of Government and Industry Affairs at A.O. Smith Corporation, and Yuri Freedman, Senior Director of Business Development at Southern California Gas Company.