HomeMy WebLinkAboutStaff Report 6566City of Palo Alto (ID # 6566)
City Council Staff Report
Report Type: Study Session Meeting Date: 1/25/2016
City of Palo Alto Page 1
Summary Title: Sustainability/Climate Action Plan Study Session
Title: Study Session Regarding Ongoing Preparation of a
Sustainability/Climate Action Plan (S/CAP) to Update and Replace the City's
2007 Climate Protection Plan
From: City Manager
Lead Department: City Manager
Recommendation
Staff recommends that the Council review and discuss the City’s developing Sustainability and
Climate Action Plan (S/CAP), including the proposed Greenhouse Gas (GHG) reduction goals and
key measures regarding transportation, energy, and water.
Note: This is the first in a series of Council meetings on this subject scheduled for the spring of
2016. No Council action is proposed ay this time, but has been scheduled in the aftermath of
the S/CAP summit to allow for Council discussion.
Summary
The Office of Sustainability, working with consulting partner DNV GL, has collected input from
the community of Palo Alto, researched global best practices for greenhouse gas (GHG)
emission reductions and resource conservation, and evaluated the cost/benefit ratios for a
range of carbon reduction strategies. Based on that work, staff is pursuing development of a
multi- faceted plan to deliver pace-setting GHG reductions and energy use strategies in ways
that enhance quality of life, prosperity and resilience in Palo Alto. These measures should also
reduce operating costs when implemented holistically, and deliver tangible economic, quality of
service, and quality of life benefits to all residents.
This overview of the draft S/CAP includes potential key elements for Council’s consideration
and comment, with the understanding that the S/CAP is a long-term plan with varying time
horizons for potential changes. It is clear that transportation and natural gas present our
biggest challenges -- road transportation accounts for more than 61% of Palo Alto’s remaining
carbon footprint, while natural gas accounts for more than 25%—and that Palo Alto will be
unable to achieve the State of California GHG reduction goals of 80% by 2050 without
significantly reducing emissions from both these categories. (Key elements are summarized
here, and described in more detail in the Discussion session that follows.)
•Transportation: Make it more convenient not to drive by developing responsive,
multimodal, service-focused transportation services—and ending subsidies such as
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free parking or shifting them to support non-SOV travel—to reduce congestion and
climate impacts.
•Electricity: Support a systematic shift from natural gas to all-electric systems
powered by carbon neutral electricity, wherever technically and legally feasible and
cost- effective. Given the consumer costs and stranded costs to the Utility, this may
require various transition strategies over time.
•Buildings: Explore building stock upgrades to Zero Net Energy or Net Positive
through design, efficiency, renewables and bundled services packages, and (if
technically and legally feasible and directed by City Council) encourage all-electric
new construction.
•Resource Efficiency: Aggressively cut energy and water demand in buildings and
operations, reduce emissions and impacts and save money for the residents,
business, and the City with an emphasis on integrative design1 and policy
approaches to drive large gains in resource efficiency2.
•Sustainable Water Management: Balance water importation, rainwater
harvesting, groundwater management, recycled water use and onsite treatment
options in an integrated, long-term strategy.
•Municipal Operations: Embed sustainability in city procurement, operations and
management, including “default to green,” adoption of internal carbon pricing
and reporting of sustainability impacts in staff reports, capital improvement
project proposals and management reports.
•Financing Strategies: Finance cost-effective initiatives by pricing carbon, applying
a portion of parking revenues to mobility alternatives, and channeling local and
external investment in support of these goals.
Note that the legal and financial implications and cost-effectiveness, and degree of public
support of these elements, and other elements throughout this report, will require detailed
careful consideration and review, and are subject to Council direction.
Future staff analysis and reports will focus on:
•Sea Level Rise Response: Build resilience through risk mapping, mitigation,
adaptation and, where necessary as a secondary response, retreat strategies.
•Ecosystem and Human Systems Protection: Provide a healthy, resilient
environment where all species can thrive and enjoy life.
•Buildings: Rapidly upgrade the resource efficiency of residential and commercial
building stock
•Utility of the Future: Adapt CPAU to the business model challenges facing the
utility industry
•Information systems: Advance “smart city” platforms for transportation, utilities,
buildings, operations, finance, etc.
1 “The conventional definition of integrated design is that project team members from all disciplines work together early and
often throughout the project design process. The enhanced definition presented here includes what goes on when the
design team gets together - the synthesis of climate, use, building design and systems.”
http://designsynthesis.betterbricks.com/what-integrated-design
2 http://www.rmi.org/rmi/Whole%20System%20Thinking%20and%20Integrative%20Design
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•Community engagement, Support household practices and behavior change and
including expanded potential to reduce “scope three” emissions.”3
Relationship to Comprehensive Plan
Staff received instruction from Council to synchronize with the City’s ongoing Comprehensive
Plan Update and provide a holistic approach to sustainability and climate action across all City
activities. The City Council has also -- on several occasions -- indicated its desire to reflect
sustainability and climate adaptation in the vision and goals of all elements of the
Comprehensive Plan Update. Integration of these two plans will provide a policy framework
and a roadmap for achieving emission and consumption reduction targets, and support the
City’s efforts to maintain ecosystems and biodiversity in our parks, gardens, forests and food
systems, and provide a clear process for addressing community needs with high quality
services.
As part of its review of the Comprehensive Plan, Council will want to discuss the format in the
plan for linkage to the S/CAP and adopted sustainability goals.
Staff is asking Council to consider a portfolio of GHG emission reduction strategies that could
collectively achieve GHG reductions at a faster pace than proposed by the State of California,
which has set a reduction target of 80% by 2050, and an intermediate target of 40% by 2030.
Could—and should—Palo Alto, which has already reduced emissions by an estimated 35%, seek
to achieve the State’s 80% reduction goal to be achieved earlier than 2050? What should that
target be and what would be the requirements and implications of doing so?
As Council and community discuss the S/CAP and the options before us, we will need to
consider several key questions:
Leadership: What level of GHG emission reduction goals will Palo Alto target?
Pace: How fast will Palo Alto attempt to achieve these reductions? Implementation: Which
measures will Palo Alto enact to achieve these reductions? Invest: How much will Palo Alto
invest?
Funding: How will Palo Alto fund those investments?
Criteria: What factors will Palo Alto use to make these decisions?
Organization of this report
Background: The Climate Challenge. Technology and the Pace of Change. Palo Alto History and
Opportunities. Why Act Now. Objectives.
Discussion: Footprint. Ten Realms of Action. Key Levers: Rethinking Mobility; Electrifying Our
City; Water. Other Levers: Buildings; Municipal Operations; Palo Alto Utilities; Information
Technology; Engaging the Community; Ecosystems. Potential Sources of Funds. Key Questions.
Timeline: Next Steps/Plan.
Environmental Review
NOTE: This staff report provides a summary of the S/CAP, which is still a work in progress and
3 Indirect emissions, such as those resulting from purchased goods and services and air travel
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provides substantially more detail than presented here. Given the complexity of the issues
discussed, staff decided not to complete and circulate a draft plan until benefiting from Council
and community input on general directions and issues. The full draft will be presented for future
study sessions, at which Council will have the opportunity to go deeper into specific issues, the
extensive quantitative analysis that supports them, and the requirements of both a 15-year
strategic plan (including goals, key strategies and decision criteria) and a series of five-year
action plans to implement them. The focus of this initial study session is to lay out the key
components of the SCAP and strategies under consideration-- focusing more on identifying
aspirations, priorities and concerns rather than detailed assessment of specific actions--and
then come back to Council for deep dives on transportation, energy, water and adaptation (and
other issues that Council may direct).
Background
Palo Alto is at the heart of the region that drives the eighth largest economy in the world, and
what is created in Palo Alto has influence far beyond its borders. Palo Alto has made
remarkable progress toward reducing its carbon impacts, GHG emissions and resource
consumption since establishing one of the first Climate Protection Plans in the US in 2007.
In the eight years since then, the world has gotten hotter, the west has gotten dryer, and more
cities have stepped into the ranks of climate leadership.
As the climate heats up, cities will need to act wisely in order to ensure the wellbeing of their
communities in the face of the challenges ahead. Palo Alto can help show the way ahead,
improve our community’s quality of life and inspire changes elsewhere. Cities around the world
are ratcheting up their own sustainability initiatives, and we can also learn and be challenged by
their efforts.
In the course of developing this new Sustainability and Climate Action Plan, we face two
fundamental choices with regard to climate:
- Will we move from carbon neutral electricity to a carbon neutral utility to
eventually become a carbon neutral city (which will require major changes in
transportation as well as energy use)?
- And how quickly will we do that?
The Climate Challenge
Science: The International Panel on Climate Change (IPCC) has determined that “we risk severe,
pervasive and irreversible impacts” from climate change, and need “substantial” greenhouse
gas emissions reductions (of 40-70% or more) by mid-century. The International Energy Agency
has asserted that 80% of proven fossil fuel reserves must “stay in the ground” if the planet is to
avoid the worst climate change projections. Meanwhile, climate disruption records continued
to be broken in 2014, which was the warmest year recorded since 1880. Munich Re America
reported that “Insured winter storm losses in the United States in 2014 were the highest in
eight years, at $2.3 billion, while insured losses due to severe thunderstorm events exceeded
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$10 billion for the sixth year in a row.”4 The UN World Meteorological Organization (WMO)5
reported that high ocean temperatures contributed to exceptionally heavy rainfall and floods in
many countries and extreme drought in others. Twelve major Atlantic storms battered the
United Kingdom in early months of 2014, while floods devastated much of the Balkans
throughout May. Crippling droughts have struck large swathes of the continental United States
while Northeast China and parts of the Yellow River basin did not reach half of average summer
rainfall, causing severe drought.
State of California: Assembly Bill 32 (the California Global Warming Solutions Act of 2006),
committed the State to reduce its GHG emissions by 20% from 1990 levels by 2020, and
Executive Order S-3-05, signed in June 2005, set an aspirational goal to reduce emissions 80%
by 2050. The first scoping plan by the California Air Resources Board (CARB) detailed ways to
achieve the AB32 goal; CARB’s recent update addressed the need to accelerate reductions to
meet the 2050 goal, and the need for local jurisdictions to meet or exceed the State’s goals.6
Then in April 2015, Governor Jerry Brown issued Executive Order B-30-15 establishing a
California GHG reduction target of 40% below 1990 levels by 2030.7 Recent revisions to
California’s Title 24 will require that all new residential buildings be Zero Net Energy (ZNE) by
2020, and all new commercial buildings by 2030; this will apply to retrofit projects above
certain thresholds.8 Meanwhile, Governor Brown has challenged the state to increase the
renewable portfolio standard (RPS) to 50% of needs, reduce petroleum up to 50% and double
the efficiency of existing buildings by 2030.9 A milestone climate change bill, SB 350, which
passed in 2015, enshrined most of these proposals into law (though it was stripped of the goal
to reduce petroleum use by 50% before it was passed). A companion bill, SB 32, which would
have made the state’s long-term targets for carbon emissions reductions, currently set by
executive order, a matter of law, did not garner sufficient support and staff expects it will be re-
introduced in 2016.
United States: President Obama’s March 19, 2015 Executive Order10 requires the federal
government to cut GHG emissions by 40% by 2025 from 2008 levels and increase Federal
renewable energy sources to 30%; budget savings from these initiatives are estimated at $18
billion. Several major federal suppliers, including Lockheed Martin, General Electric, and IBM,
announced new voluntary GHG reduction commitments; IBM says it will cut energy-related
GHG emissions 35% (against 2005 levels) by 2020. (Among local companies, HP has set a goal to
reduce the GHG emissions from operations 20% by 2020 compared to 2010 levels and SAP
plans a 51% reduction in its total GHG emissions from its year 2007 published baseline levels.)
Europe: The European Union has adopted an emissions reduction target of 40% below 1990
levels by 2030. The United Kingdom has committed to reduce its emissions by 50% below 1990
4 http://www.claimsjournal.com/news/national/2015/03/04/262111.htm
5 http://www.un.org/apps/news/story.asp?News=49970#.VRm-yvnF-So
6 First Update to the Climate Change Scoping Plan: Building on the Framework Pursuant to AB32 – The California Global Warming Solutions
Action of 2006
7 http://gov.ca.gov/news.php?id=18938
8 http://cleantechnica.com/2014/04/15/californias-net-zero-energy-building-will-reshape-us-construction-industry/
9 http://gov.ca.gov/news.php?id=18828
10 https://www.whitehouse.gov/the-press-office/2015/03/19/executive-order-planning-federal-sustainability-next-decade
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levels within the 2022–2027 timeframe, and Germany has set 2030 emissions target of 55%
below 1990 levels.
Other cities: Other cities around the region and around the world have been actively engaging
this issue, with innovative programs around flexible transportation systems, congestion
management, electric vehicles, energy efficiency, and renewable power development—and in
many ways have been leading ahead of their national governments. Examples include:
Table 1: Examples of Climate Action Goals of Other Cities
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Figure 1: Climate Neutral Cities Alliance (CNCA) Goals
Technology and the Pace of Change
Rapid technology change and behavior shifts make the usual practice of planning based on
extrapolation of past trends a bit uncertain. For example, Vehicle Miles Travelled (VMT), the
widely used transportation metric, has risen steadily for decades, but recently shows signs of
turning down, as Millennials buy fewer cars (and reportedly even forego getting drivers’
licenses); car buying by the 18-30 demographic in the US peaked in 1983. The chart below
shows recent projections from the US Department of Transportation, which indicate a
flattening of historically rising VMT projections, with a downturn expected.
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Prices for solar photovoltaic (PV) systems, electric vehicles (EVs), batteries, autonomous vehicle
controls, sensors and many other technology categories have been plummeting for years. Tony
Seba, Stanford lecturer and author of Clean Disruption, asserts that this combination of trends
portends a profound shift in US automobile culture, with potentially rapid displacement of
internal combustion engine (ICE) vehicle by EVs, perhaps by 2030, and potentially a dramatic
reduction in private vehicle ownership in the same time frame. Such trends could make
conservative planning risky; for example, ExxonMobil’s 2014 projection of battery prices in
2040 will likely be reached in the market by 2020.
This makes the job of transportation planners, for example, and parking garage developers,
uncertain and challenging. How will we determine what, where and how much to build in the
face of these trends, and neither overbuild nor underbuild?
Palo Alto History and Opportunity11
For more than 20 years, Palo Alto has been an internationally recognized leader in
sustainability innovation, with a wide range of initiatives—citizen-led, staff-initiated, and
council-directed—that have in many cases raised the bar on urban sustainability. This status is
well deserved, given our community's deep-rooted environmental values and City's early
climate initiatives.
Early actions like our 2007 Climate Protection Plan (one of the first five city climate plans in the
US), bold recent actions like carbon neutral electricity, and systematic improvements ranging
from water conservation and EV readiness to green building ordinances and safe routes to
schools, and hundreds of other measures12 have put Palo Alto in the forefront of sustainability
leadership internationally. Based on annual data for the calendar year 2014, the community of
11 Transportation Research Institute, University of Michigan. National trends.
12 https://www.cityofpaloalto.org/civicax/filebank/documents/45024
Figure 2: Changing Vehicle Miles Travelled Forecasts
11
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Palo Alto has cut its overall greenhouse gas (GHG) emissions by an estimated 34% from 2005
levels and 35% from 1990 levels13—one of the largest reductions of any city in the world.
Because of its community commitments and past accomplishments, Palo Alto is uniquely
positioned to advance a world-leading climate plan.
Some of the needed initiatives are within the capacity of City government. Some will require
the active collaboration of neighboring jurisdictions. All will require the support, commitment
and actions our entire community.
While many people still assume that “sustainability” is expensive, and that the initiatives
identified here would require sacrifice of money, comfort or both, the evidence that staff has
reviewed from cities and businesses around the world suggest that well designed and managed
sustainability programs can be fiscally prudent, cost effective and in many cases can yield
attractive returns on investment of public resources.
13 These are revisions of previous estimate, due to an August 2015 modification of their 2013 estimate of 1990 and 2012-2014 transportation
emissions by consultants Fehr and Peers.
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Figure 3: Palo Alto Community-wide GHG Emissions (net of Renewable Energy Credits)
Extrapolating from its historic GHG reduction trend suggests that Palo Alto is well on its way to
an estimated 47% reduction by 2030 and 80% reduction by 2050; note however that this
trend includes the one-time drop in reportable GHG emissions that resulted from the carbon
neutral electricity policy in 2012 and 2013.14 Staff estimates that existing initiatives (including
EV-ready and PV-ready mandates and the electrification initiatives that Council has directed
staff to explore) could bring those reductions still lower.15)
14 The estimate of a 47% reduction by 2030 is calculated by staff based on extending Palo Alto’s 2005-2012 rate of GHG reductions forward to
2030; it excludes the dramatic one-time reduction gained by the City’s carbon neutral electricity policy. There is of course no guarantee that
Palo Alto will sustain that rate of reduction; it may achieve less, or, as proposed in this report, may achieve greater reductions. Note that
the Draft EIR being prepared for the Comprehensive Plan Update will contain a more conservative (i.e. lower) estimate for purposes of
compliance with the California Environmental Quality Act (CEQA).
15 Placeholder estimate. Will be refined by consultant work authorized by Amendment 1 to S/CAP consultant DNV GL’s contract, December 14
2015. Staff anticipates having those results in advance of this January 25 study session.
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Why Act Now
The International Energy Agency has determined that 80% of fossil fuels need to “stay in the
ground for the 2°C target to be within reach. ExxonMobil recently predicted “catastrophic”
climate change, with global temperatures rising 5-7°C. The global climate agreement reached at
the COP21 conference in Paris in December 2015 saw nearly 200 countries agree to common
action on climate.
The New York Times noted (quoting from the agreement) that
The Agreement 'calls for “holding the increase in the global average temperature
to well below 2°C above pre-industrial levels and to pursue efforts to limit the
temperature increase to 1.5°C above pre-industrial levels....” This language
recognizes the scientific conclusions that an increase in atmospheric temperatures
of more than 2 degrees Celsius, or 3.6 degrees Fahrenheit, would lock the planet
into a future of catastrophic impacts...But it also recognizes the scientific
conclusions that warming of just 1.5 degrees Celsius, or 2.7 degrees Fahrenheit,
could present an existential threat to low- lying island nations that would be
inundated by sea level rise at that rate of increase.'
The existing national plans submitted for the conference 'would probably result in
an increase above 3 degrees Celsius.'
'When countries update their commitments, they will commit to the “highest
possible ambition,” but the agreement does not set a numeric target.'
Objectives
In the wake of the Paris conference—where Canada and other countries called the 2°C target
inadequate and proposed a 1.5°C target—we may expect to see changes in global expectations,
and perhaps in California climate policy.16
There are multiple reasons for Palo Alto to pursue the sustainability and climate initiatives
outlined in this plan:
to improve the living standards, quality of life and value delivered to residents;
to save the City and community money through improved efficiency;
to reduce future risk from climate related events and their impacts on the community;
to balance fiscal responsibility with other community values;
to attract and retain innovative clean businesses;
to make our contribution in support of State and international commitments to reducing
global emissions;
to provide a leadership example to other cities and the community for which Palo Alto
is known.
16 Note also that the “80% reductions by 2050” that stands as the global reference target, and California’s stated goal, was a political
consensus based on the “the scientific conclusions that an increase in atmospheric temperatures of more than 2 degrees Celsius, or 3.6
degrees Fahrenheit, would lock the planet into a future of catastrophic impacts”—in other words, a minimal rather than maximal goal,
though many today consider it a “best practice.” In view of the 1.5 degrees Celsius target that was proposed at the Paris COP by Canada
and other countries, that reference target may change. In any case, it may be advisable to consider “80x50” a minimal rather than a maximal
goal.
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Meeting or exceeding California’s GHG reduction goal of 80% by 2050 will require both staying
the course on our current efforts, and building on, intensifying and evolving them in the face of
changing technologies and conditions.
Solutions appropriate for Palo Alto will need to address specific local economic considerations
and community needs. This in turn requires understanding the specific needs of the City and
community related to energy and resource consumption, transportation, development and the
considerations of daily life. And it requires the data systems that provide this view into the
systems that produce the experience of living and working in Palo Alto.
Discussion
For the past year, hundreds of Palo Altans have provided input to the S/CAP planning process,
contributing their ideas regarding objectives of the plan as well as emission reduction measures
that could be used to achieve meaningful GHG reductions and other measures that could
achieve sustainability objectives related to water conservation, adapting to climate change, and
other issues.
Based on this input, the Office of Sustainability considered three possible emission reduction
targets17: 80% emissions reduction by 2050, or “80X50,” consistent with the State’s goal; 80%
emissions reduction by 2030 or “80X30”; or 100% reduction (to carbon neutral or better) by
2025 or “100X25.” In each case, staff identified and started to evaluate (technically and
economically) the mix of strategies that could achieve each goal. Interestingly, staff found that
each target could be achieved with similar strategies implemented at a very different pace.
Based on this analysis, this staff report presents potential strategies for Council consideration
and discussion, and asks whether the Council is interested in further planning to develop an
S/CAP that exceeds the State’s goal, and if so, by how much? Specifically, staff invites Council to
consider whether to:
- Set a goal of reducing GHG emissions by at least 80% by 2030—20 years ahead of
California’s 80% goal, and achieve that goal by:
- Building, step by step, on Palo Alto’s historic Carbon Neutral Electricity Plan to next
become a Carbon Neutral Utility18, by encouraging electrification (and other measures) to
eliminate the impact and eventually the use of natural gas,
- Becoming a Carbon Neutral City soon after by working with its own resources and in
collaboration with neighboring jurisdictions to dramatically reduce dependence on
the internal combustion engine and private vehicles
- Advocating for policies that advance climate positive initiatives across the Bay Area
and the state.
17 Note that in all these scenarios, reductions are partially driven by factors outside our control, including Federal and state policy, legal
and regulatory constraints, cost-effectiveness of measures and technology, the pace of technology innovation, and behavioral changes
by our population. In this way, the S/CAP may be similar to California Air Resources Board’s (CARB’s) update to the State’s scoping plan,
which suggests that near-term actions and targets need to be specific, quantifiable, and within an agency’s control, while longer term
actions and targets may require changes in technology and/or actions by others, and could be less precise.
18 A Carbon Neutral Utility could be achieved in an estimated 15-20 years through the efficiency and electrification strategies discussed
below, or immediately by using carbon offsets as a bridging strategy modeled on Palo Alto’s use of RECs to accelerate the transition to
Carbon Neutral Electricity. Note that this would mean significant economic changes for the gas utility, and could require a full or partial
exit strategy for the gas utility. (This is a “back of the envelope” estimate. S/CAP consultants are producing a more refined estimated
under a Contract amendment authorized by Council December 14 2015.)
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Footprint
Palo Alto has systematically reduced its GHG emissions through a series of measures, many of
them predating the 2007 Climate Protection Plan (CPP). The figures below show Palo Alto’s
emissions reduction trajectory in relation to the State of California’s declared 2050 trajectory,
and the 80x30 trajectory proposed for consideration here.
Figure 4: Projected Emissions Based on Current Palo Alto Trends vs Emissions Reductions
Required to Meet State of California Targets: 1990-2050
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Figure 5: Projected Emissions Based on Current Palo Alto Trends vs Emissions Reductions
Required to Meet State of California Targets: 1990-2030
These historic reductions have been achieved most significantly though the CNE initiative,
ongoing CPAU efficiency and incentive programs; the Green Building Ordinance (GBO) and
Energy Reach Code (which are perhaps the most aggressive in the state and nation) including its
EV-ready and PV-ready requirement; operational improvements at the RWQCP; the ZeroWaste
and Environmentally Preferable Purchasing initiatives; the Urban Forest Master Plan; and more.
Initiatives already in motion or under consideration will drive additional reductions:
electrification analysis; the next green building ordinance (GBO), including potential “zero net
energy” requirements; “default to green” purchasing policy, including rapid electrification of
the City fleet; launching the Downtown Transportation Management Association (TMA) to
achieve a City Council initiated goal of reducing single occupant vehicle (SOV) trips in and
around the City’s commercial centers by 30% or more19; build-out the City’s adopted bicycle
and pedestrian plan; implementing parking technologies to better manage existing downtown
parking supplies; initiating a paid parking study for downtown; and establishing Transportation
Demand Management (TDM) requirements on new development projects.20
It is clear from the chart that transportation and natural gas present our biggest challenges:
road transportation accounts for more than 61% of Palo Alto’s remaining carbon footprint,
while natural gas accounts for more than 25%—and that Palo Alto will be unable to achieve the
State of California goals without significantly reducing emissions from both these categories.
Ten Realms of Action
Staff and consultants have examined ten realms of action: Transportation, Energy, Water,
Buildings, City operations, Palo Alto Utilities, Infrastructure, Adaptation/Resilience, Ecosystems
and Engaging the Community. Key strategies and actions are summarized in Figure 6 and Table
19 https://www.cityofpaloalto.org/civicax/filebank/documents/39106, 2/24/14
20 https://www.cityofpaloalto.org/civicax/filebank/documents/46324
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2; Others are summarized later in this report. This staff report focuses on three: transportation
and energy, because they represent the vast majority of Palo Alto’s emissions (excluding “scope
three” emissions, which are not considered in this analysis), and water, because of the
challenges of the current drought and potential risks of long-term drought. The others are
summarized here but will be addressed in detail in future reports.
Figure 6: S/CAP Levers, Goals and Strategies
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Table 2: Key Actions—Summary
As noted earlier in this staff report, any specific proposals that are developed to implement the
above listed “realms of action” and “key actions” would need to be assessed for their cost-
effectiveness, potential policy trade-offs and legal constraints that might influence the
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design of any such proposal or identify areas where the City could intervene at the federal,
state or local level to advocate for constitutional, statutory or regulatory change.
Investment and Impacts
The charts that follow summarize the investments and impacts associated with the strategies
presented below.21
This “waterfall chart” shows the current estimates of the GHG reductions that could result from
each initiative (in metrics tons of CO2 equivalent, or MTCO2e).
Figure 7: "Waterfall" Chart Showing Potential GHG Reductions from Each Measure
This “McKinsey chart” shows the estimated “mitigation cost” (in $/MTCO2e reduced) for each
strategy.
21 The methodology behind these analyses is explained in Attachment A.
600,000
500,000
400,000
300,000
200,000
100,000
0
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Figure 8: McKinsey Chart": Estimated "Mitigation Cost" (in $/mTCO2e reduced)
It is evident from these charts that the greatest GHG reductions are likely to come from
electrification of vehicle fleets (largely through provision of EV charging infrastructure),
encouraging all-electric new construction, electrification of water and space heating, and
pricing parking; the most economic reductions are to be gained from encouraging all- electric
new construction, issuing universal transit passes, electrification of water heating, pricing
parking, and electrification of vehicle fleets. The intersection of these lists provides an initial set
of priority actions for Council consideration.22
Key Levers: Detail
1.Key Levers: Rethinking Mobility
Road transportation represents about 61% of Palo Alto’s carbon footprint—and a headache for
everyone. Palo Alto’s Comprehensive Plan calls for reducing reliance on the automobile, and
22 Note: The quantities displayed here are estimated, using analytical models based on projections of the potential impacts of different
actions, and assumptions of the potential rates of adoption that could be achieved. As with all such models, it would be prudent to
assume that near term projections (such as the next five years) are more accurate than linger term projections (such as the next 15 or
even 35 years), and staff recommends revisiting and recalibrating the S/CAP every five years—or more often, as new information
warrants. The potential impacts of some actions—like replacing natural gas water heaters with electric heat pump water heaters
(HPWH)—are relatively straightforward to analyze with a high degree of confidence; the potential impacts of other actions—like
advanced mobility strategies—are much more difficult to analyze, because causal relationships for new technologies are not yet
well understood, and because the academic literature often used as a basis for these technologies generally lags the technologies.
As such, these should not be taken as predictions of what will happen, but as a portfolio of strategies that could potentially achieve the
targets set. The S/CAP consultants have constructed these models to be transparent and flexible; it’s relatively straightforward to modify
assumptions and observe the effect those modifications have on outcomes.
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we've made progress in some areas: for example, 44% of high school students commute by
bicycles. Beyond our borders, federal CAFE standards have reduced the carbon intensity of the
US vehicle fleet. But congestion continues unabated, and the majority of Palo Altans, and
commuters to Palo Alto, still make Single Occupancy Vehicle (SOV) trips.
Traditional approaches to transportation—adding capacity by building roads and parking—send
the wrong signals, encourage SOV travel and add pain. But what if we asked a different
question: How could we make it more convenient for anyone, anywhere, anytime to not have
to get into a car and drive?
Issue(s): Emissions. Congestion, Quality of life.
Goals: Reduce congestion. Reduce emissions. Increase convenience. Triple bike share, double
walk mode share and reduce SOV trips 30% in the Downtown area by 2020. Eventually,
eliminate 80- 100% of road transportation emissions, while increasing mobility and
convenience
Levers: Expand non-automobile mobility options. Expand transit facilities and services. Create
the right incentives.
Strategies: Reduce GHG/VMT by shifting vehicle fleets (City owned, privately owned and
commercially owned) from fossil-powered to electric. Phase out automobile subsidies by
requiring drivers to pay for parking. Reduce trips and vehicle miles travelled (VMT) by
developing mobility services that make not driving more convenient than driving. Collaborate
with regional partners.
Barriers/concerns/unknowns: Significant dependence on external factors including technology,
policy, other actors. Possible reluctance to change behavior. Possible resistance to paying for
parking directly (as opposed to indirectly). Significant investments in transit, rideshare, and
non-SOV incentives may be required (though much of this could come from other actors than
the City).
GHGs from road travel are a function of two factors: Vehicle Miles Travelled (VMT), and the
carbon intensity of that travel (GHG/VMT). Reducing GHG/VMT is largely a function of vehicle
technology, driven for example by Federal CAFE standards, state policy, improved fuel
efficiency, electrification and customer adoption. Most of these factors are outside the purview
of cities, but Palo Alto has some ways to influence VMT, by developing attractive alternatives to
SOV trips, and GHG/VMT, largely by encouraging electrification of City, resident and commuter
fleets.
The City supports a number of emerging transportation demand management (TDM) initiatives
including its first Transportation Management Association (TMA)23 to develop, manage, and
market transportation programs to reduce single occupancy vehicle trips in the Downtown Core
area. The Comprehensive Plan Update also provides an opportunity to establish policies that
outline when TDM should be applied and programs that specify how compliance will be
periodically measured and enforced. TDM plans for individual development projects can
establish TDM requirements and set enforceable SOV mode-share targets. TDM plans would
establish a list of acceptable TDM measures that include transit use, prepaid transit passes,
commuter checks, car sharing, carpooling, parking cash-out, bicycling, walking, and education
23 http://www.paloaltotma.org/
City of Palo Alto Page 20
and outreach to support the use of these modes. They should provide a system for
incorporating alternative measures as new ideas for TDM are developed.
Staff has identified seven strategies for addressing these goals, each with one or more specific
strategies: Expand non-auto mobility options; Expand transit facilities and services; Facilitate
shared transportation; Provide universal transit access; Phase out SOV subsidies by charging for
parking; Ensure that any new development addresses and mitigates its impacts (e.g. through
trip caps or other TDM initiatives); Reduce the carbon intensity of vehicular travel. The most
significant strategies (in terms of potential impact and cost) are summarized here.
Actions
1.a. Reduce the carbon intensity of vehicular travel by encouraging shift to EVs
Expanding the percentage of trips taken in EVs would have the largest impact on emissions
from road transportation, which is in turn the largest category of Palo Alto emissions. Palo Alto
has one of the highest rates of EV ownership in the country (estimated by staff at 2-3% of
registered vehicles), but several factors limit EV adoption, including price (which is dropping
rapidly), total cost of ownership (often poorly understood), and vehicle performance—
especially “range anxiety.”
The City has undertaken a number of measures to address those limitations, including hosting
periodic “ride and drive” events to provide staff and residents direct experience of EV
performance and economics; analyzing total cost of ownership; establishing an “EV first”
preference for the City fleet; and working to expand EV charging infrastructure in Palo Alto by
parking garage operators, employers and potentially third party providers.
City ordinances require all new construction and significant renovations for commercial and
multi-family buildings to pre-wire and allocate parking spaces for Electric Vehicle Supply
Equipment (EVSE), or EV chargers, at specified rates. The City has been adding additional public
charging stations, with grant support from regional agencies; third party providers of charging
systems could enable flexible expansion of charging infrastructure without requiring
commitment of City funds. (The City may want to consider flexible rather than maximal
approach to charging infrastructure, since as the range of available EVs expands, the
importance of “away from home” charging may become less significant, and if private vehicle
ownership continues to decline, as some have suggested, saturation may be achieved at a
lower volume of chargers.)
1.b. End incentives to private car use.
Ending parking subsidies and significantly increasing the cost of parking all over Palo Alto is a
strategy that could reduce reliance on the private automobile and encourage residents and
employees to use transit, ride-hailing services, biking, walking, or other modes. Use parking
revenues to finance non-SOV alternatives, modeled on the “Stanford Engine”.24
Palo Alto provides approximately 4,000 off-street and 7,000 on-street parking spaces in the
downtown and California Avenue areas. A quick web survey of other workplaces and shopping
24 Stanford’s commute alternatives program finances the Marguerite shuttle and other services from a $3/day parking fee. The program
is responsible for reduction of SOV rates from 78% to 48%; it also saved $107m in capital not spent on parking garages that were no
longer needed (and freed land for more academically pertinent uses).
City of Palo Alto Page 21
districts suggests approximately 30,000 additional spaces. The on-street spaces are provided at
no cost to drivers (in contrast to many other cities in the region), and the publicly- owned off-
street spaces are provided at either no cost (short-term parking) or at a cost that is below
comparable rates in neighboring communities (long-term parking).
Given the actual cost of creating and maintaining on- and off-street parking spaces (an
estimated $3,600/year for parking garages, based on the amortized cost of providing parking
spaces at a capital cost of $60,000 per space), free parking provides a significant incentive for
SOV trips, despite the City’s long-standing policy commitment (as noted in the 1998
Comprehensive Plan) to reduce those trips. Instituting and/or requiring parking fees
commensurate with this cost would remove that incentive, reduce SOV trips, and provide a
funding source for programs that make the use of alternative modes easier for all. Potentially,
in combination with other strategies listed here and the shift in driving trends already noted, it
could also reduce the need to build additional parking structures (as has been the case at
Stanford).
Preliminary analysis, based on parking rates in surrounding jurisdictions, suggests that Palo Alto
could potentially realize parking revenues of $5-15 million per year25, which would in turn
provide substantial resources for the programs discussed here. The City has contracted for a
paid parking study, now getting underway, that will provide additional insight into Palo Alto’s
options and more closely examine costs and revenues.
1.c. Provide low cost transit benefits to all Palo Alto residents and employees
A universal EcoPass provides one of the most economical ways to reduce emissions. (See
mitigation costs chart.) EcoPasses are transit passes sold by VTA that enable the carrier to use
their bus system. Presently EcoPasses are available to employers similar to GoPasses (for the
train), and could potentially be made available to residents in transit served areas. The EcoPass
(and comparable passes from other transit providers) could be provided at relatively modest
cost, potentially funded by parking revenues and employer “feebates,” and provide residents
and workers with free access to select transit services. A variant of this approach, already being
explored by the Downtown Transit Management Association, would provide discounts for use
of ride-hailing services like Lyft and Uber as a “first and last mile” solution for commuters.
1.d. Develop “Mobility as a Service” (MaaS) in Palo Alto and the region:
Financial incentives are not the most effective level to change behavior, unless convenience is
addressed as well.
“Mobility as a Service” (MaaS) is a concept that proposes to shift the focus from fixed
transportation to flexible, responsive transportation services designed to meet people’s diverse
and changing needs by providing seamless regional multi-modal mobility services, including
improved transit, and bike share; dynamic, on-demand shuttles; flexible first & last mile
solutions; and walkable/bikeable communities. The full MaaS concept, articulated most fully by
Tekes, the Finland technology funding agency and the Finland Ministry of Transportation and
Communications (with which Palo Alto has developed a collaboration) and the SV MaaS
initiative which Palo Alto initiated with Joint Venture Silicon Valley (JVSV), envisions one or
more “Mobility Aggregator” services that provide subscription-based, customer-centered
25 This is a wide range, estimated by staff by applying a range of regional parking rates to the quantity of Palo Alto’s on street and off
street parking spaces.
City of Palo Alto Page 22
experience that provides “plan/book/buy/ride” access to multiple transportation modes in
a single unified smartphone app with easy fare payment, one-stop billing and integrated
employer subsidies.26
The elements of MaaS are increasingly familiar, as Transportation Network Companies (TNCs)
like Lyft and Uber and responsive shuttle services like Chariot and Bridj grow in familiarity and
market share, and transit agencies struggle to adapt to shifting rider expectations.27
In response to Council’s challenge to reduce SOV trips 30% for key commercial centers by 2020,
staff are exploring pilots of such programs, initially through “first and last mile” programs being
developed by the Downtown TMA, enhancement the City’s own commute alternative program
for employees, and developing an RFP for technology providers that could develop a mobile
app or “wallet” allowing the user to conveniently plan, book, access and pay for a bundle of
transit/rideshare services. (Companies at the Stanford Research Park are exploring comparable
programs.)
1.e. Evaluate what would be required to achieve bicycle mode share levels being
t targeted by other cities, ranging from Portland and Copenhagen and LA.
Palo Alto is a bicycle-friendly city, and the City is making a significant investment in new bicycle
boulevards and other improvements included in the adopted Bicycle and Pedestrian Plan.
However, bicycle ridership is low compared to cities like Portland and Copenhagen and the next
iteration of the Bicycle and Pedestrian Plan could set higher goals and seek to achieve higher
bicycle and pedestrian mode share levels. Provisioning protected bike lanes can be expensive in
terms of GHG mitigation, but provides health and quality of life benefits as well. On the other
hand, expanding surface area for bike at the expense of surface area for cars may prove
controversial, at least until the potential decline in VMT and automobile demand becomes
apparent and palpable to more people.
1.f. Explore “zero impact” standards in residential and commercial development
Adopt plans that target future residential and commercial development in specific transit-
friendly districts. Impose “no net impact” caps for energy, GHGs, water--and trips.
Scenario Four of the Comprehensive Plan EIR contemplates this approach. The cities of Menlo
Park, Mountain View, Sunnyvale, and Cupertino and Helsinki and others have begun to impose
trip caps; for example, developments in North Bayshore in Mountain View are required—as a
condition of permitting—to provide transportation amenities that will keep SOV rates under
45%.
A combination of these four caps is unprecedented (as far as we know), and could provide a
powerful incentive to property owners and developers to build innovative, efficient and
affordable buildings and developments.
26 SV MaaS is testing and refining, with major Silicon Valley employers, a three-pronged strategy to reduce incentives for SOV commutes and
make non-SOV travel increasingly convenient—that could readily scale to other employers throughout the region. The key elements:
a. Gradually increasing the price for parking at major employers.
b. Application of parking revenues to non-SOV transportation alternatives. (Parking pricing + incentives = revenue-neutral
workplace feebate--a self-financing system of charges and rebates to encourage environmentally-preferable practices.)
c.Smart applications (apps) to increase non-SOV convenience for commuters and benefits tracking/management for employers.
27 The Shared Use Mobility Center has developed databases and interactive maps of “shared use mobility” services, programs and policies across
the country. http://www.sharedusemobilitycenter.org/
City of Palo Alto Page 23
Embrace “tactical urbanism”
Many of the innovations in transportation planning and land use encourage small, fast local
experiments are new, some unprecedented, and would benefit by a more flexible and agile and
experimental planning and learning process. (Tactical urbanism is an umbrella term used to
describe a collection of low-cost, temporary changes to the built environment, usually in cities,
intended to improve local neighborhoods and city gathering places. Tactical Urbanism is also
commonly referred to as guerilla urbanism, pop-up urbanism, city repair, or D.I.Y. urbanism.28)
Leverage existing Open Data & Smart City initiatives to support mobility services
Real time access to relevant data is essential to efficient platforms for public & private mobility
service providers. Palo Alto should provide open access to its own transportation data. Since
transportation issues are regional, Palo Alto should work with other communities in the region
to share data and develop common or compatible protocols. Palo Alto should encourage
mobility providers to share their data in turn (or perhaps require that as a condition of
operation.)
Benefits:
These transportation-focused strategies will provide both direct and indirect benefits. Direct
benefits include reduced congestion, reduced GHG emissions, and health and economic
benefits to commuters and developers. Indirect benefits include, for example, reduced CapX
and OpX for roads and parking structures; less capacity pressure on roadways enabling release
of some surface area to bicycle and pedestrian modes; more permeable surfaces as road
demand declines, enabling enhanced storm water capture (see “green infrastructure,” below)
and reduced heat island effect.
2.Electrifying our City
Key Levers: Energy (general)
Issue(s): Natural gas emissions currently represent ~25% of Palo Alto’s carbon footprint.
Natural Gas (i.e., methane, is a potent greenhouse gas, with a global warming potential (GWP)
at least 23 times that of CO2.29 Carbon Neutral Electricity opens the option of fuel switching
from natural gas.
Goals: Reduce or eliminate emissions from natural gas. Reduce costs. Increase comfort,
reliability and resilience.
Means: Efficiency. Renewables. Electrification. Expand PPAs and distributed generation &
storage. Build the “smart grid.” Set a price on carbon. Adapt CPAU’s business model to the
challenges facing the utility industry.
Levers: Staff has identified several “levers” for addressing these goals, each with one or more
specific strategies: Reduce demand through resource efficiency and conservation electrification
of heating and cooking functions currently provided with natural gas; encourage zero net
energy, zero net carbon and all-electric design in new construction; periodically evaluate the
suitability of biogas as pipeline gas; and, potentially, use of carbon offsets as a bridging
28 https://en.wikipedia.org/wiki/Tactical_urbanism#cite_note-1
29 Recent research indicates that the impact natural gas may be 180% of current analysis, due to leakage throughout the supply chain and the
lifecycle of methane in the atmosphere.
City of Palo Alto Page 24
strategy.
Actions:
Set high energy & carbon performance standards for new construction and renovations.
Accelerate retrofits, including electrification.
Raise efficiency & RPS goals; aggressively market toward them; challenge staff and
community to improve efficiency 10% per year for the next ten years.
Develop contingency plans to maintain carbon neutral electricity in face of potential reduced
reliability of hydroelectric power
Explore microgrid and district energy strategies in key districts
Proactively explore “utility of the future” strategies to take advantage of potential disruptive
change facing the industry30
Benefits: Emissions. Savings. Health31. Agility. Resilience.
Palo Alto has made remarkable progress in decarbonizing its electricity sector. In addition to
the City’s purchase of hydro-electric power resources, CPAU has worked actively to develop its
renewable electricity portfolio. In 2013, Palo Alto approved a Carbon Neutral Electric Resource
Plan committing Palo Alto to using carbon neutral electric resources from that year
on—through purchase of Renewable Energy Credits (RECs) for the “brown power” portion of
CPAU’s portfolio that will largely be replaced by 2017 with expanded purchases of renewable
power. However, low hydro production may necessitate the purchase of brown power and
RECs after 2017 as well.
Many CPAU programs are already under way to reduce energy usage in homes and local
businesses, through education and outreach, incentive programs and energy use disclosure
requirements. But the results have been modest and inconsistent. Palo Alto should accelerate
those efficiency gains (to reduce pressure on CPAU’s renewable capacity), drive down natural
gas usage and shift to carbon neutral electricity.
Further reductions in GHG emissions associated with utility energy consumption could be
achieved through:
Breakthrough efficiency in electricity consumption to reduce city’s overall energy
demand and the need for continued energy purchases through power purchase
agreements (PPAs) for renewable power.
Innovation technically and financially to move the city away from natural gas by
both reducing natural gas consumption as much as possible, partly through energy
efficiency, and electrification of traditionally gas uses (i.e. heating) combined with
increase local energy generation and, potentially, transitional use of offsets.
There are potential concerns regarding “complete” electrification, including:
Induced demand. In the absence of adequate energy storage, morning and evening
demand peaks in Palo Alto, which would not be met by local renewables, would call
upon the resources of the existing grid, which would be met by fossil resources; in
30 Discussed at UAC April 1, 2015: http://cityofpaloalto.org/civicax/filebank/documents/47849
31 E.g., indoor air quality and health benefits from electrifying appliances such as stove tops and clothes dryers that are located IN the home due
to reduced hydrocarbon fumes.
City of Palo Alto Page 25
this scenario, according to some, electrification intended to reduce GHG emissions
could potentially increase them.)
Redundancy/resilience. If CPAU customers shifted most or all natural gas demand
to electricity, the city system could be more vulnerable to electrical outages. Micro-
grids, for example, could reduce that risk, but the risks should to be evaluated as
part of any electrification strategy.
CPAU economics. A successful electrification strategy could greatly reduce natural
gas revenues; yet CPAU would still need to maintain the integrity of the natural gas
infrastructure. (See “Utility of the Future,” below.)
Regulatory constraints. Publicly-owned utilities operate in a complex, highly
regulated legal environment with respect to almost every aspect of the utility
business from rate design to safety and reliability to required program and service
offerings. Investor- owned utilities (like PG&E) operate under a different legal and
regulatory construct, particularly with respect to rate setting. Proposals to address
GHG emissions must always harmonize discrete policy proposals with legal and
regulatory constraints, cost-effectiveness and cost of service principles, and the
overall safety and reliability principles that are at the core of the utility’s mission.
In August 2015, the City Council authorized an electrification (a/k/a “fuel switching”) work
plan32 to research and analyze ten specific electrification strategies; that work is underway and
will yield analytic findings and recommendations over the course of 2016 and early 2017.
Key Actions: Natural Gas [broken out from energy for clarity]
2.a. Encourage all-electric in new construction
Because new construction of advanced alternatives is generally more economic than retrofits,
this strategy is one of the most cost-effective evaluated.
2.b. Make PA GreenGas “opt out.”
Shift PAGG from an opt-in program to an opt-out, which would bring Palo Alto to 40% GHG
reductions—California’s 2030 target—now!).33
2.c. Reduce energy use through efficiency measures and equipment replacement
Continue to support and, where feasible, consistent with legal and regulatory requirements,
and cost-effective, accelerate aggressive energy efficiency and accelerated retrofit cycles
through building codes and CPAU incentives. Develop programs that take advantage of natural
equipment life cycles by encouraging CPAU customers, through focused marketing and/or
predictive analytics, to upgrade at time of replacement to most efficient technology,
determined on a total cost of ownership basis.
2.d. Pursue and apply electrification feasibility analysis.
Encourage “fuel switching” where cost effective from GHG-emitting natural gas to carbon
neutral electricity. Initial analysis of the cost-effectiveness of fuel switching strategies identified
residential water heating (replacing hot water heaters with heat pump water heaters (HPWH)
32 http://www.cityofpaloalto.org/civicax/filebank/documents/48443
33 Emission offsets are controversial, but may play a successful transitional role in reducing natural gas-related emissions. Other options
include: (1) Make the PAGG portfolio the default gas portfolio (2) Explore investing a portion of those funds in qualified local offsets to
fund other S/CAP initiatives, using offsets as “bridging” strategy as the City has done with carbon neutral electricity
City of Palo Alto Page 26
and some EVs as “cost-effective” within current parameters. CPAU plans to begin a pilot
program testing HPWH replacement strategies and customer response in early 2016.34
Other electrification opportunities, including residential space heating electrification,
commercial water heating and space heating electrification, and commercial cooking
electrification, are less cost effective at this time when assessed as individual measures, but
may be more cost-effective when offered as bundled services. (For example, Boulder CO is
developing an integrated service offering that combines energy audit, weatherization, efficient
appliances, rooftop solar and an EV in a single bundle that lowers monthly cost to the customer
and is paid for through on-bill financing. The offering may be target marketed using predictive
analytics, based on customer use patterns and permit data, to identify the customer who would
benefit the most.)
Related actions: Build capacity to serve expanded electrical demand through efficiency, local
generation, and continued renewable power purchase. Adjust rate tiers in order to not penalize
fuel-switchers. Note that all rates must be based on the cost to provide service. Any rate design
proposal must be specifically analyzed for legal, regulatory, and cost-effectiveness issues, or
other barriers (e.g. operational implementation) that may impose constraints on using rates as
a tool to implement or otherwise incentivize or subsidize fuel switching.
2.e. Monitor biogas options.
Biogas (or methane generated from crop or waste resources) is part of the strategy mix in
California’s PATHWAYS analysis. CPAU has determined biogas is not an economically viable
option for Palo Alto at this time, and PG&E has expressed concerns about the safety and quality
of biogas if this commodity is introduced into its pipeline transmission system.
2.f. Monitor the long-range viability of CPAU’s natural gas business.
As customers shift away from natural gas, CPAU’s natural gas revenues will decline, while the
Utility will still need to maintain the safety and integrity of its natural gas pipelines and systems
and retain qualified workers. This could generate financial stress at some point in the future
and leave stranded assets.
2.g. Infrastructure considerations for the natural gas utility
Longer-term implications of moving away from natural gas in Palo Alto need to be studied in
further detail. For instance, natural gas utility estimates for long-term infrastructure planning
costs and anticipated infrastructure upgrades need to be assessed relative to costs and benefits
of electrification for specific natural gas distribution areas and neighborhoods. Aging natural
gas infrastructure needs to be considered as part of assessing electrification opportunities.
Steps may include:
Identifying natural gas distribution areas requiring costly network upgrades
Developing plans to target these areas for electrification and associated electrical
upgrades needed with aggressive, targeted incentives
Assessing whether and how avoided cost of infrastructure upgrades could pay for
34 In addition to cost-effectiveness hurdles, electrification programs may be legally constrained as well. For example, efforts to shift
customers from natural gas to electricity, which will have investment and revenue impacts on each enterprise fund, may raise issues with
regard to Prop 26, which prevents municipal utilities from “cross- subsidizing” electricity and gas customers. This will need to be evaluated
as part of developing electrification strategies.
City of Palo Alto Page 27
electrification
Benefits: Emissions. Savings. Agility. Resilience.
3.Key Levers: Water
Background/Issue(s): Palo Alto has done an outstanding job of meeting annual water use
reduction requirements of the current “drought.” But both potable water supplies and
hydroelectric needs could be challenged by long-term shifts in California’s precipitation regime.
With shifting climate patterns35, significant uncertainty exists related to whether the drought
conditions are the “new normal” for California However, all climate projections show increases
in average temperatures and reduced snowpack where Palo Alto sources much of its water—
which could impact Palo Alto’s hydroelectric power and thus its carbon neutral electricity
strategy.
Under state law36, City of Palo Alto Utilities (CPAU) must prepare an Urban Water Management
Plan every five years. The Plan must assess the reliability of Palo Alto’s water sources over a 20-
year planning horizon and report its progress on a 20% reduction in per-capita urban water
consumption by the year 2020.37
CPAU’s 2010 Urban Water Management Plan presumes continuation of modern California
precipitation regimes, which might not accurately represent the future we face. CPAU is
beginning development of the 2015 plan (due June 2016 to the State). Given current climatic
projections, long-term increases in water supplies from San Francisco Public Utilities
Commission (SFPUC) appear highly unlikely, and any tapping of groundwater supplies, even
with the new storage facilities, would only provide emergency short term relief. The key is
therefore to reduce consumption of water while rapidly increasing the availability and use of
recycled water.
Goals: Safe and reliable water supply for the possible “new normal” of less (and less reliable)
precipitation
Means: Efficiency. Recycled water. Green infrastructure for local storm water capture and
storage. Onsite wastewater treatment.
Strategies: Reduce potable water consumption. Supplement existing water supplies.
Actions:
Develop long-term efficiency goals, and aggressively market toward them Incorporate net
zero water standards in future Green Building Ordinances
Evolve Palo Alto landscapes to adapt to changing precipitation trends, and allocate water
resources to protect our urban canopy
Develop and incent local water capture and storage, from household to social scale Pilot and
evaluate onsite wastewater treatment technologies
Pursue recycled water production and use Benefits: Resilience. Savings.
Strategy: Reduce potable water consumption.
35 The California Department of Water Resources (http://www.sei-international.org/news-and-media/3252), the Association of California
Water Agencies (http://www.acwa.com/events/2016-executive-briefing-defining-new-normal) and others are examining the potential
impacts of Climate Change on Hydrologic Trends and Water Management.
36 Water Conservation Bill of 2009
37 http://www.water.ca.gov/urbanwatermanagement/
City of Palo Alto Page 28
In Palo Alto, overall water use per account decreased by 27% between 2000 and 2010, and all
customer classes showed a reduction in annual water use per account. The relative share of the
total water usage made up by the residential customers has continued to grow with residential
single-family users increasing their share from 41% to 47%. Overall water consumption in the
residential sector in total increased its share from 50% to 62% of total citywide consumption.
Palo Alto’s drought response has to date achieved reductions of well over 25% in 2015
compared with 2013 levels.
Long-term water reduction strategies should focus not only on implementing these procedures
during times of drought, but also using the incentives and policy drivers the water management
plan to drive sustained water consumption reduction, which will require structural changes in
water demand (such as building design and landscaping choices) as equipment and fixture
upgrades and behavioral choices.
Strategy: Supplement Existing Water Supplies
New sources of both potable and non-potable water to support redundant supplies for water
security requires 1) increasing ground water capture through capturing rain water, storm water
retention and encouraging ground water recharging through green infrastructure investment,
design criteria and policies, 2) maximizing the potential for water recycling from the Regional
Water Quality Control Plan (RWQCP), and potentially 3) careful exploration of on-site waste
water treatment technologies (such as those in use at Moffett Field).
Ground water capture and management is critical to provide sufficient on-call reserves during
severe droughts, and to maintain sustainable ecosystems. Policies to maximize capture also
reduce the risk of storm water outflow and flooding. Policies the city should promote for
ground water capture include:
Green stormwater infrastructure. Promote the design of green streets and alleys
to promote the integration of green infrastructure elements into the street and/or
alley design to store, infiltrate, and evapotranspire stormwater.
Set policy and codes to require permeable pavement installation on new and
retrofit of commercial building and residential projects. These pavements are
particularly cost effective where land values are high such as in Palo Alto and where
flooding is a problem.
Promote rainwater and greywater harvesting. Address through building policy or
legally compliant, cost-effective utility incentives the capturing rainwater and
greywater and using it for landscape watering needs reducing the use of potable
water for landscape irrigation.
Incent downspout disconnection. Address through building policy or legally
compliant, cost-effective water utility incentive the disconnection of rooftop
drainage pipes to drain rainwater to rain barrels, cisterns, or permeable areas
instead of the storm sewer.
Develop recycled water (and potentially direct delivery of purified water) capacity
and uses, from both the RWQCP and onsite waste water treatment.
City of Palo Alto should also maximize water recycling from the RWQCP. Under current upgrade
plans, the RWQCP could produce as much as 27 million gallons per day, of which approximately
33% meets quality standards for “unrestricted use” and 19.4 MGD of restricted water use.
City of Palo Alto Page 29
The City continues to examine methods to expand the use of recycled water. Completion of the
Recycled Water Market Survey and Facility Plan is a step in that direction. The City expects that
the costs of implementing expanded recycled water use can be reduced through a combination
of regional coordination and state and federal matching funds.
Other Actions [Summary]
These “other actions” are listed in brief summary form, and will be addressed in detail in future
study sessions.
4.Key Levers: Buildings
Goals: “Net Positive,” healthy, productive, efficient built environment
Means: Building ordinances and reach codes. Performance benchmarking and disclosure.
Education & outreach to realtors, developers, building trades, financiers
Actions:
Set & enforce building standards >15% above California’s.
Establish a “loading order” for efficiency & ZNE measures: New buildings > Major retrofits >
Ownership transfer
Apply retro-commissioning and performance benchmarking to ensure and incentivize high
performance. (Retro-commissioning is a systematic process to ensure that a building performs
as designed. Performance benchmarking is comparing one building’s performance to
performance of comparable buildings.)
Ensure that City buildings meet green building requirements. Conduct regular building audits,
set performance improvement goals, assign accountability
Assess and accelerate electrification transition (with CPAU). Use “predictive analytics” to
identify and engage likely candidates for retrofit and equipment upgrades, based on expected
end-of-life of existing equipment
Benefits: Reduced emissions. Operating cost savings. Enhanced asset value. Grid resilience and
more manageable energy demand curve.
5.Key Levers: Municipal Operations
Efficiency, low carbon and other sustainability initiatives can save money, improve operating
performance, reduce emissions, and provide leadership by for the community.
Goals: “We go first”
Means: Procurement. Procedures. Accountability. Training.
Actions:
“Default to Green” in procurement (For example, City policy requires that City management
procure EVs as first choice, and select fossil fueled vehicles only if appropriate EVs are not
available.)
Embed sustainability commitments and criteria into CIP process, building construction,
renovation and operation
Establish internal carbon targets and trading, pricing to increase GHG-reduction
City of Palo Alto Page 30
accountability.38
Apply retrofits to cut resource use 5-10%/year—performance contracting. Reinvest operating
savings into further sustainability initiatives
Collaborate with other cities to share best practices & advance regional initiatives
Benefits: Footprint. Cost savings. Happy customers. Lead by example.
6.Key Levers: Palo Alto Utilities
Goals: Reliable, safe, economical, sustainable and resilient services
Means: Lead the charge. Adapt business model to changing industry dynamics.
Actions:
Promote—and monetize—radical resource efficiency.
Increase PPA contracting to hedge hydro uncertainty, subject to the City’s Risk Management
Policies and Procedures; maximize local solar+storage as resilient complement to grid solar.
Deploy Smart Grid as key part of “smart and connected city”
Restructure rates to not penalize increased electrical demand
Explore and develop microgrids; prepare to upgrade grid to meet rising demand from
electrification.
Adapt CPAU business model to service-focused, Distributed Generation/Storage
Benefits: Leadership. Resilience. Savings.
7.Key Levers: Adaptation & Resilience
This is a large topic, addressed here only briefly. Santa Clara County has conducted extensive
analysis of these topics in their SV 2.0 project. SCAP consultants have provided detailed
assessment of risks and potential responses. City staff have several related workstreams
underway, some of which will be presented in a parallel study session currently scheduled for
January.
Goals: Reduce vulnerability to Sea Level Rise (SLR), flooding, rising temperatures, extreme
weather events
Means: Inform, protect, retreat. Build resilience into City planning.
Actions:
Continue to pursue “green infrastructure” as required by the Regional Water Quality Control
Board and as warranted by staff analysis; include supporting policies in the Comp Plan
Update aimed at increasing storm water infiltration.
Pursue policies and projects to reduce storm and flood vulnerability
Evaluate and if needed strengthen SLR and flooding concerns into planning, zoning,
permitting and insurance requirements
Address the vulnerability of City assets to sea level rise (SLR)
Benefits: Survival of critical assets and services. Reduced costs, public safety.
38 More than 400 companies, 40 nations and 23 cities, states and regions have established internal carbon pricing, as a way of incorporation
climate plan goals into management and operating decisions.
City of Palo Alto Page 31
8.Key Levers: Information Technology
Goals: Enable staff, residents and business to understand trends innovate programs
Means: City as platform: Provisioning data and information services that support operational
efficiency and program innovation
Actions:
Extend open data initiatives to include mobility, utility, operations & environmental quality
Provide visual performance dashboards that simplify tracking and benchmarking
sustainability performance—and support effective action
Accelerate smart grid deployment. Enable customer and 3rd party access to accurate, timely
data. Protect privacy.
Benefits: Agility. Participation. Learning. Data-driven decisions.
9.Key Levers: Engaging the Community
Goals: Broad community engagement, participation, guidance, initiative
Means: Inform & convene. Support individual & collaborative action. Disclose & report impacts.
Actions:
Pilot “CoolBlock” collaborations to support neighborhood cooperation toward sustainability
and resilience goals
Deploy/encourage dashboards and “fitbit for sustainability” apps Estimate/report “scope 3”
emissions, to seed conversations about consumption Benefits: QOL, savings, accelerated GHG
reductions, conviviality, political support
10.Key Levers: Ecosystems
Goals: Protect and enhance the regenerative capacity of ecosystems
Means: Value and enhance the common wealth.
Actions:
Use “ecosystem functionality” layers in planning processes.
Expand and protect canopy, biodiversity, soil health and water capture; adapt canopy and
parklands to changing climatic regimes
Value and enhance the common wealth for future generations.
Benefits: Quality of life. Adaptation/resilience.
Potential Sources of Funds39
Staff has identified a variety of potential sources of funds to finance the initiatives that Council
may choose to purse, though all of these sources (including private financial vehicles) need a
more complete assessment of applicable legal and regulatory requirements and the risks and
obligations associated with the various approaches. These include operating savings, parking
feebates, utility rates, revolving loan funds, local offsets, carbon tax or fee, voluntary
contributions, as well as green bonds and private financial vehicles.40 There is evidence that
39 The City of Palo Alto has just been award an $85k grant from USDN for a multi-city exploration of potential sustainability financing
strategies
40 This despite a common misperception: Most people who have not been deeply engaged in sustainability work assume that low-carbon and
other sustainability initiatives will necessarily require financial, performance or quality of life sacrifices, because “better usually costs
more.” As we’ve seen in the world’s product innovation, green building, and corporate eco-efficiency, this is not necessarily the case; in
City of Palo Alto Page 32
market demand exceeds supply for well-
constructed sustainability and climate related investment opportunities; as a result some
initiatives discussed here may be financeable through private investors. (Subject to Council
selection of goals and measures, the strategies outlined here could yield Net Present Value in
the hundreds of millions of dollars.)
Key questions
As Council and community discuss the S/CAP and the options before us, we will need to
consider several key questions:
Leadership: What level of GHG reduction goals will Palo Alto target?
Pace: How fast will Palo Alto attempt to achieve these reductions?
Implementation: Which measures will Palo Alto enact to achieve these reductions?
Invest: How much will Palo Alto invest?
Funding: How will Palo Alto fund those investments?
Criteria: What factors will Palo Alto use to make these decisions?
Legal Issues
Subsequent Study Sessions and Council Reports will address the cost implications and policy
trade-offs of various mandates and proposals, and identify and assess any constraints that may
exist (including any imposed by legal, statutory or regulatory requirements) in more detail.
All measures and actions identified in this broad overview of the current state of the S/CAP
process must be specifically analyzed and considered in the context of all applicable legal,
statutory and regulatory requirements, including, for instance, constitutional limitations on
utility rates and use of ratepayer funds imposed by Californians when they adopted Proposition
26, obligations set forth in the Cap-and-Trade regulations adopted by the California Air
Resources Board, and other miscellaneous requirements embedded in the California Public
Utilities Code.
Timeline: Next steps/Plan
Staff proposes a series of events over the course of the spring, to support Council and
community in developing and reviewing the draft S/CAP and deciding together how to proceed.
- A community summit on January 24, 2015 to engage several hundred Palo Altans (and
most of the Council) in an open discussion of the potential goal and the critical
elements of Transportation, Energy and Water.
- This study session, which can explore the overall strategic sweep and key elements of
the entire SCAP, and begin a high level conversation to surface aspirations and identify
concerns, and frame the study sessions which will follow.
fact a growing body of evidence documents that attractive returns on investment are possible from well-designed and well-executed
sustainability initiatives. In the words of the late Ray C. Anderson, founder and CEO of Interface Flor, “If you think sustainability is too
expensive, you’re doing it wrong.”)
City of Palo Alto Page 33
- A series of study sessions over the course of the year, to enable deeper consideration of
these three elements, and develop understanding of the requirements of both a 15
year strategic plan and a five year action plan.
- The annual Earth Day Review of City sustainability initiatives in late April.
- An action item—potentially in the early fall— to adopt goals and strategies, appropriate
initial funding, establish criteria by which Council will allocate funding in response to
specific staff proposals, and identify next steps.
Resource Impact
This study session has no resource impact beyond the staff and consultant time required to
prepare and review this staff report, and participate in the meeting. Climate plan updates are
significant undertakings for any jurisdiction, and since 2014 the City of Palo Alto has invested
time and resources in this project. The need to allocate multiple members of City staff,
significant time on the City Council’s agenda, and financial resources for consultant assistance
and event/meeting programming will continue until the adoption of the updated Climate Plan
(and its companion environmental document). Implementation of the Climate Plan will require
investment of public funds, in amounts to be determined based on selection of goals and
strategies, across the various funds of the organization.
Policy Implications
The Sustainability and Climate Action Plan will set forth proposed City policies and actions with
regard to the topics addressed, and a framework for future discussions regarding these topics.
The S/CAP Plan addresses many issues that are also addressed by the Comprehensive Plan.
While staff has attempted to coordinate the two work streams as much as possible, there are
inevitable differences, given the nature of each initiative, which will need to be reconciled as
the planning processes advance in 2016. The Comprehensive Plan is an update of Palo Alto’s
1998 Comprehensive Plan, and has been underway since 2008; it will build on the existing plan,
and incorporate goals, policies, and programs addressing climate change and climate adaption
for the first time. The EIR for the Comp Plan Update will take a conservative look at potential
GHG emissions through the year 2030.
The S/CAP is a de novo undertaking, commenced in 2014; it is disruptive in nature, presenting
possible strategies for making Palo Alto more sustainable in 2030 and beyond. As is typical for
such planning efforts, near term actions can be specific and quantifiable, while longer term
actions are necessarily more aspirational and specific, focusing on externally driven goals and
attempting to determine if and how to meet them. These two different processes will converge
on some matters, and not others; however staff recognizes that the two plans must ultimately
work together to express the community’s vision for the future, and establish specific policies
and strategies to guide future investments and decisions. Staff has not attempted to resolve all
these differences as the staff level, since many of them are a matter of political, not
professional, judgment, and thus within the purview of Council and community, not staff.
City of Palo Alto Page 34
Environmental Review
Adoption of a Climate Plan will require review pursuant to the California Environmental Quality
Act (CEQA). While some sustainability measures have been included in the Draft EIR that is
being developed for the Comprehensive Plan Update, the final S/CAP may include strategies
that have not been adequately addressed by the Update. Thus the final S/CAP will have to be
reviewed to determine the appropriate level of CEQA review required. This review may utilize
the Comprehensive Plan EIR, or require preparation of an Initial Study/Negative Declaration, or
even preparation of an additional EIR, depending on the strategies and commitments it
contains.
Attachment:
ATTACHMENT A: Stabilization Wedges and Analytical Assumptions (DOC)
Attachment: Stabilization Wedges and Analytical Assumptions
The projected GHG reductions presented in this CMR are based on extensive analysis,
summarized in these “stabilization wedges” and tables of assumptions.
The wedges, based on the methodology developed by Robert Socolow of Princeton
University, illustrate the GHG reductions delivered over time by each element of a
portfolio of strategies.
The wedges are driven (through an Excel model not presented here, but available for
review) by these tables of assumptions, which show the target implementation levels
and adoption rates for each measure. As these assumptions are changed, projected
GHG reductions change, as shown by the accompanying charts.
These projections were developed using analytical models based on projections of the
potential impacts of different actions (in turn based on engineering analysis or published
research), and assumptions of the potential rates of adoption that could be achieved.
As with all such models, it would be prudent to assume that near term projections (such
as the next five years) are more accurate than longer-term projections (such as the next
15 or even 35 years), and staff recommends revisiting and recalibrating the S/CAP every
five years—or more often, as new information warrants.
Note that the potential impacts of some actions—like replacing natural gas water
heaters with electric heat pump water heaters (HMWH)—are relatively straightforward
to analyze with a high degree of confidence. The potential impacts of other actions—like
advanced mobility strategies—are much more difficult to analyze, because causal
relationships for new technologies are not yet well understood, and because the
academic literature often used as a basis for these technologies generally lags the
technologies themselves.
As a result, these should not be taken as predictions of what will happen, but as a
portfolio of strategies that could potentially achieve the targets we set. (These
projections should be considered estimates within perhaps a +/-20% range.) The S/CAP
consultants have constructed these models to be transparent and flexible; it’s relatively
straightforward to modify assumptions and observe the effect those modifications have
on outcomes.
The target implementation levels and adoption rates shown here are aggressive, and
would require focused and consistent effort to achieve (for example, replacing most gas
water heaters at end-of-life with HPWHs, rather than a few). But these rates provide
one possible roadmap for achieving the 2030 target, and a basis for discussion of what
we choose to accomplish.
Transportation (City & Community GHG Emissions, mTCO2e)
Strategy Name Selected?
(Yes/No) Assumptions Implementation
Level
Target
Year
Annual
Adoption
Rate
BAU -
Transportation
Build out bike
network Yes
Convert all class II bike
lanes to protected bike
lanes (PBL)
Increase bike boulevard
mileage from 22-32 miles
Expand bike share to 28
stations per square mile
40% 2030 2.7%
Expand transit
facilities and
services
Yes
Caltrain modernization
ridership targeted in 2040
achieved
Expand SamTrans, VTA and
Palo Alto shuttles by 100%
El Camino Real and
Dumbarton Bus Rapid
Transit
60% 2030 4.0%
Facilitate shared
transport Yes
Dynamic ridesharing based
on San Francisco casual
carpool rates, with Palo
Alto share proportionate to
Palo Alto Caltrain ridership
60% 2030 4.0%
Provide eco-
pass/universal
transit pass
Yes
Expanded Universal Transit
Pass (UTP) - Caltrain
GoPass, SamTrans
Way2GoPass, and VTA
Ecopass, for all residents
and employees
100% 2030 6.7%
Utilize parking
pricing and
management
approach
Yes
All employment sites
institute parking pricing,
parking cash-out, parking
feebate equivalent to
market price of parking
Full cost pricing of
residential parking
(unbundling or eliminating
minimum parking
requirements)
50% 2030 3.3%
Adopt a
"balanced
community"
approach for
growth
Yes
Target a jobs-housing
balance of 1.44 with growth
in specific areas (e.g.,
Stanford Research Park,
downtown core, Stanford
Shopping Center, etc).
15% 2030 1.0%
Convert Palo Alto
vehicles to EV Yes
Incentives, rebates and
programs to encourage
electric vehicle adoption by
Palo Alto residents
90% 2030 6.0%
Convert all other
vehicles to EV Yes
Offer charging stations, and
other incentives for people
coming into Palo Alto to
drive EVs
80% 2030 4.0%
Carbon offsets No Purchase carbon offsets 0% 2030
Natural Gas (City & Community GHG Emissions, mTCO2e)
Strategies Selected? (Yes/No) Implementation
Level
Target
Year
Annual
Adoption
Rate
BAU - Natural Gas
Residential water heating
electrification Yes 100% 2030 7%
Residential space heating
electrification Yes 70% 2030 5%
Commercial water heating
electrification Yes 85% 2030 6%
Commercial space heating
electrification Yes 85% 2030 6%
Commercial cooking electrification Yes 50% 2030 3%
Restrict natural gas hook-ups/
require ZNE new construction Yes 100% 2030 100%
Carbon offsets No 0% 2030 0%
Biogas No 0% 2030 0%