Tech Policy

California commits billions of dollars to climate tech in broader climate push

State lawmakers approved a record $54 billion in spending for climate programs.
article cover

Demerzel21/Getty Images

· 3 min read

Stay up to date on emerging tech

Drones, automation, AI, and more. The technologies that will shape the future of business, all in one newsletter.

Just days before a record-breaking heat wave hit the state, California’s Legislature added to its already bold list of climate policies by passing a spate of new measures.

Among other things, the new legislation aims to help accelerate the deployment of climate tech, from the grid to EVs, in the state and potentially beyond.

Climate spending: Lawmakers in California approved a record $54 billion for climate programs on August 31. The money will be used to meet the state’s new goal of cutting greenhouse-gas emissions by at least 85% by 2045.

  • More than $8 billion will go toward decarbonizing and stabilizing the power grid.
  • The funding also includes $6.1 billion for EVs and battery-powered school buses, as well as $14.8 billion for transit, rail, and port projects.
  • Earlier in the month, the state approved a ban on the sale of most gas-powered cars by 2035.

Housing and transportation: Along with funding for EVs and transit, the Legislature passed measures to encourage denser housing and eliminate parking requirements for dwellings near bus or train stops.

  • The state will reward car-free low-income Californians with a $1,000 tax credit.

Existing energy sources: Other provisions in the legislation address maintaining or cleaning up power generators that are already operating in the state.

  • California lawmakers approved a $1.4 billion loan to PG&E that will allow the Diablo Canyon nuclear plant to continue producing power for five years past its original 2025 closure date.
  • The plant provided more than 9% of the state’s electricity and ~15% of its clean energy production last year.
  • In addition to passing restrictions on how close to homes, schools, and hospitals new oil and gas wells can go, a separate bill directs the California Air Resources Board to develop regulations for carbon capture, utilization, and storage projects at polluting industrial sites such as oil refineries.

Big picture: When combined with the Inflation Reduction Act and the CHIPS Act, these funds in California bring US commitments for climate tech spending to nearly $600 billion this year.

California is the fifth-largest economy in the world and has been a leader in climate policy, so these moves could encourage other states to follow suit. But the remaining question is how the state will meet these ambitious goals, especially since it’s behind on meeting its 2030 greenhouse-gas reduction targets.

“In my view, they still don’t have a realistic plan for implementation, and that’s the most important part,” Danny Cullenward, policy director at CarbonPlan, a nonprofit group that evaluates climate solutions, told the New York Times.

Stay up to date on emerging tech

Drones, automation, AI, and more. The technologies that will shape the future of business, all in one newsletter.