California's Alternative Fuels Plan
The U.S. House of Representatives is scheduled to debate legislation today aimed at reducing our dependence on foreign oil, and I am glad to see Washington finally focus on this vital issue.
But in California, we're not waiting for Washington to act. We are moving forward on our own because the issue is too important to wait for someone else to lead.
Under an executive order I am signing today, California will establish the world's first carbon standard for transportation fuels. This is a follow-up to the historic global warming legislation I signed last September, and it has the benefit of being great for the environment and great for the economy and national security. Our global warming act set the most ambitious targets in the world for reducing the greenhouse gas emissions that cause global warming. It commits California to reduce climate change emissions to 1990 levels by 2020 -- a 25 percent reduction. By 2050, we will reduce emissions to 80 percent below 1990 levels. The plan goes farther than the Kyoto Protocol, as those targets only extend to 2012. And the Kyoto target is to reduce green-house gas emissions 12.5 percent below 1990 levels by 2012. We will do this while creating jobs and raising incomes. But to achieve these goals, we must reduce our dependence on oil for meeting our enormous transportation needs. That's where my new executive order comes in.
We have more than 24 million registered motor vehicles in California (and more registered drivers than anywhere else in the nation) and 96 percent of the fuel they use is high-carbon-content gasoline.
Because of that, transportation fuels are responsible for 41 percent of our greenhouse gas emissions. We can't possibly meet our climate change goals if we keep burning high-polluting oil in our vehicles.
Being so dependent on oil also leaves our economy -- and therefore our national security -- dangerously vulnerable to price shocks caused by world events or actions by oil cartels outside our control. When oil prices jump, sales and wages fall. Money flows offshore instead of into our domestic economy. No business can afford to be hostage to a single supplier for its most critical raw materials. Nor can any state or any nation. To protect our jobs and wages -- and clean our air -- we must diversify our fuel sources and reduce our oil dependence.
By 2020, my executive order will require a reduction in the carbon content of transportation fuels sold in California that reduces greenhouse gas emissions by more than 13 million tons a year. It will replace 20 percent of our on-road gasoline consumption with lower-carbon fuels, the equivalent of taking 3 million cars off the road. The size of the state's renewable fuels market would more than triple during this time, and California would become home to more than 7 million alternative fuel or hybrid vehicles.
The new standard will dramatically expand investment in alternative fuels by using the enormous market power of our economy. It will also restrain government from picking which alternative fuels win. Whether it is ethanol, electricity, hydrogen or some other fuel, we want innovators and consumers making those decisions. California is one of the largest economies in the world. Creating a market for alternative fuels in an economy this large will move world markets. Entrepreneurs around the world are investing tens of billions of dollars in clean technologies and alternative fuels. With this initiative, we're saying invest those billions with California in mind. To reach the carbon-reduction target at the lowest cost and be responsive to consumer choice, fuel suppliers will decide how best to meet the standard. Refiners could choose to blend low-carbon biofuels into gasoline, purchase credits from electric utilities that supply infrastructure for electric cars, diversify to hydrogen and more. It will be in suppliers' interest to take the lowest-cost path to meet consumer demand while complying with the standard. It will be the state's job to work out a process that insures suppliers meet the standard.
In his State of the Union Address in 2006, President Bush said we must end our addiction to oil. I could not agree more. But efforts to address our addiction at the national level have been stalled by fears that protecting our environment will cost jobs. I could not disagree more. The European Union is now debating an alternative fuels policy. It's high time America followed suit. California has already shown that we can protect the environment and grow the economy at the same time. In 2005, we attracted more clean-tech investment -- $484 million -- than any other state, with much of it going to energy generation and efficiency.
The University of California estimates our greenhouse gas emissions goals will increase our gross state product by $60 billion and create more than 20,000 new jobs. The time is now for America to transition to a clean-energy economy. Once again, I am very pleased to be able to announce that California is leading the way.
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