HomeMy WebLinkAbout2026-09-04 Climate Action and Sustainability Committee Agenda PacketCLIMATE ACTION AND SUSTAINABILITY COMMITTEE
Regular Meeting
Friday, September 04, 2026
Community Meeting Room & Hybrid
2:00 PM
Climate Action and Sustainability Committee meetings will be held as “hybrid” meetings with the
option to attend by teleconference/video conference or in person. Information on how the
public may observe and participate in the meeting is located at the end of the agenda. The
meeting will be broadcast live on YouTube https://www.youtube.com/c/cityofpaloalto.
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Meeting ID: 853 8091 8387 Phone: 1(669)900-6833
PUBLIC COMMENTS
General Public Comment for items not on the agenda will be accepted for up to three minutes
or an amount of time determined by the Chair. In-person comments will be heard at the
beginning of the agenda and remote comments will be heard at the end of the agenda. In-
person general public comment will be heard for 30 minutes. Additional in-person public
comments, if any, will be heard at the end of the agenda. Public comments for agendized items
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determined by the Chair. Requests to speak will be taken until 5 minutes after the staff’s
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CALL TO ORDER
IN PERSON PUBLIC COMMENT
Members of the public may speak to any item NOT on the agenda. 1-3 minutes depending on number of speakers. In-person
comments will be heard at the beginning of the agenda and remote comments will be heard at the end of the agenda. In-person
Public Comment is limited to 30 minutes. Additional in-person public comments, if any, will be heard at the end of the agenda.
STANDING VERBAL REPORTS
A. Staff Comments
B. Committee Member Comments and Announcements
ACTION ITEMS
1. Preliminary Review of the 2025 Greenhouse Gas Inventory and Overview of Scope 3
Emissions; CEQA Status - Not a Project
2. Overview of Approaches to Achieving the City's Carbon Neutrality Goal and Committee
Feedback on Areas for Further Staff Analysis; CEQA Status - Not a Project Late Packet
Report Added
FUTURE MEETINGS AND AGENDAS
Members of the public may not speak to the item(s)
VIRTUAL PUBLIC COMMENT
Members of the public may speak to any item NOT on the agenda. 1-3 minutes depending on number of speakers. In-person
comments will be heard at the beginning of the agenda and remote comments will be heard at the end of the agenda. In-person
Public Comment is limited to 30 minutes. Additional in-person public comments, if any, will be heard at the end of the agenda.
ADJOURNMENT
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PUBLIC COMMENT INSTRUCTIONS
Members of the Public may provide public comments to teleconference meetings via email,
teleconference, or by phone.
1.Written public comments may be submitted by email to city.council@PaloAlto.gov.
2.For in person public comments please complete a speaker request card located on the
table at the entrance to the Council Chambers and deliver it to the Clerk prior to
discussion of the item.
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CLICK HERE TO JOIN Meeting ID: 853 8091 8387 Phone: 1(669)900-6833
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California Government Code §84308, commonly referred to as the "Levine Act," prohibits an
elected official of a local government agency from participating in a proceeding involving a
license, permit, or other entitlement for use if the official received a campaign contribution
exceeding $500 from a party or participant, including their agents, to the proceeding within the
last 12 months. A “license, permit, or other entitlement for use” includes most land use and
planning approvals and the approval of contracts that are not subject to lowest responsible bid
procedures and have a value over $50,000. A “party” is a person who files an application for, or
is the subject of, a proceeding involving a license, permit, or other entitlement for use. A
“participant” is a person who actively supports or opposes a particular decision in a proceeding
involving a license, permit, or other entitlement for use, and has a financial interest in the
decision. The Levine Act incorporates the definition of “financial interest” in the Political Reform
Act, which encompasses interests in business entities, real property, sources of income, sources
of gifts, and personal finances that may be affected by the Council’s actions. If you qualify as a
“party” or “participant” to a proceeding, and you have made a campaign contribution to a
Council Member exceeding $500 made within the last 12 months, you must disclose the
campaign contribution before making your comments.
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Climate Action and Sustainability Committee
Staff Report
Report Type: ACTION ITEMS
Lead Department: Public Works
Meeting Date: September 4, 2026
Report #:2608-6642
TITLE
Preliminary Review of the 2025 Greenhouse Gas Inventory and Overview of Scope 3 Emissions;
CEQA Status - Not a Project
RECOMMENDATION
This is a discussion item; no action or recommendation is requested.
EXECUTIVE SUMMARY
The City has made significant strides in implementing the Sustainability and Climate Action Plan
(S/CAP) to meet its sustainability goals, including reducing greenhouse gas (GHG) emissions by
80% below 1990 levels and achieving carbon neutrality by 2030. Preliminary calculations show
that by 2025, Palo Alto had reduced total citywide GHG emissions by 49.1% from the 1990
baseline, despite a 20.5% population increase during the same period. This is a slight emissions
increase from 2024, when GHG emissions reductions were 50.2%. For municipal operations,
preliminary calculations show that in 2025 the City emitted a total of 15,023 MT CO2e, a
roughly 62.9% reduction from the 2005 baseline, although an equivalent comparison cannot be
made due to significant changes in methodology.
BACKGROUND
In June 2023, City Council adopted the 2022 Sustainability and Climate Action Plan (S/CAP),1
certified the Comprehensive Plan Environmental Impact Report Addendum: Update to the
Sustainability and Climate Action Plan,2 and accepted the 2023-2025 S/CAP Work Plan.3 The
1 2022 Sustainability and Climate Action Plan;
https://www.cityofpaloalto.org/files/assets/public/v/1/sustainability/reports/2022-scap-report_final.pdf
2 Comprehensive Plan Environmental Impact Report Addendum: Update to the Sustainability and Climate Action
Plan, 2023; https://www.cityofpaloalto.org/files/assets/public/v/1/agendas-minutes-reports/agendas-
minutes/city-council-agendas-minutes/2023/2023comprehensive-plan-environmental-impact-report-addendum-
update-to-the-scap.pdf
3 2023-2025 S/CAP Workplan, 2023;
https://www.cityofpaloalto.org/files/assets/public/v/1/sustainability/reports/2023-2025-scap-work-plan_final.pdf
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S/CAP aligns with several goals of the 2030 Comprehensive Plan Implementation Plan, as well
as the City Council Value of “Climate Leadership and Environmental Stewardship”.4
The 2025 Greenhouse Gas (GHG) Inventory calculates Palo Alto Citywide and Municipal GHG
emissions for calendar year 2025. Preliminary calculations show that, due to various City-led
initiatives, programs, and activities focused on sustainability and climate action, by the end of
2025 Palo Alto had reduced total citywide emissions by 49.1% from the 1990 baseline, despite a
20.5% population increase during the same period. Due to changes in methodology, it is not
possible to make an equivalent comparison of the 2025 Municipal GHG Inventory with previous
inventories. However, by the end of 2025, the City reduced total municipal GHG emissions by
roughly 62.9% from the 2005 baseline. A full GHG Inventory analysis will be provided at a City
Council meeting later this fall.
ANALYSIS
The City is committed to a sustainable future. The City owns, operates, and maintains a full-
service utilities portfolio that provides electric, natural gas, fiber, water, refuse, and wastewater
services to residents and businesses in Palo Alto. Palo Alto’s continued leadership in advancing
sustainability commitments has succeeded mainly because of ongoing collaboration among
community stakeholders, City departments, and the City Council.
One way the City tracks its progress on achieving the goals of the Sustainability and Climate
Action Plan (S/CAP) is through a comprehensive accounting of greenhouse gas (GHG) emissions
in a GHG Inventory. GHG inventories calculate, quantify, and assess community-associated
emissions and their sources.
Generation-Based Greenhouse Gas Inventory
There are two types of GHG emissions inventories:
1.Generation-based GHG inventory – This measurement method helps a community
understand its level of emissions based on community energy use. It includes 1) direct
consumption of energy, 2) consumption of energy via the electrical grid, and 3)
emissions from the treatment/decomposition of waste. This is the industry-accepted
methodology for quantifying community GHG emissions, with emissions reported by
emission source category.5
2.Consumption-based GHG inventory – This measurement method helps a community
understand its level of emissions based on consumption. It offers an alternative, more
holistic approach to quantifying emissions from a community’s activities and the
4 2030 Comprehensive Plan; https://www.cityofpaloalto.org/Departments/Planning-Development-
Services/Housing-Policies-Projects/2030-Comprehensive-Plan
5 There are two reporting frameworks commonly used by cities: the U.S. Community Protocol and the Global
Protocol for Communities (GPC). Palo Alto uses the GPC framework.
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consumption of goods and services (including food, clothing, electronic equipment, etc.)
by city residents, with emissions reported by consumption category. It includes
emissions associated with production, transportation, and disposal of products and
services consumed by a community over a given period.
Like most cities, Palo Alto completes a generation-based GHG inventory. In 2014, the World
Resources Institute, C40 Cities Climate Leadership Group (C40), and ICLEI – Local Governments
for Sustainability (ICLEI) partnered to create a global standard protocol for generation-based
GHG inventories.6 The Global Protocol for Community-Scale GHG Emissions Inventories (GPC)
provides a robust framework for accounting and reporting city-wide GHG emissions for a
generation-based inventory. The GPC Protocol is the official protocol specified by the Global
Covenant of Mayors and defines what emissions must be reported and how.
For generation-based GHG inventories, GHG emissions from community activities are classified
into three main sectors:
•Stationary Energy (e.g., building electricity consumption, fugitive natural gas emissions)
•Transportation (e.g., on-road passenger vehicles, off-road equipment)
•Waste (e.g., solid waste disposal, wastewater treatment and discharge)
Activities within a city can generate GHG emissions both inside and outside the city boundary.
The GPC groups emissions into three categories based on where they occur:
•Scope 1: GHG emissions from sources located within the city boundary, such as
stationary fuel consumption.
•Scope 2: GHG emissions occurring due to the use of grid-supplied electricity, heat,
steam, and/or cooling within the city boundary.
•Scope 3: All other GHG emissions that occur outside the city boundary because of
activities taking place within the city boundary.
Figure 1. shows the sources and boundaries of GHG emissions for a generation-based
inventory.
6 Formerly the International Council for Local Environmental Initiatives, renamed in 2003 to ICLEI – Local
Governments for Sustainability.
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Figure 1. Sources and Boundaries of GHG emissions for a Generation Based Inventory.
Palo Alto’s first generation-based citywide inventory was completed for 2005 and then
extrapolated for 1990 (the baseline year). Beginning in 2010, new citywide GHG inventories
were completed annually, enabling Palo Alto to track progress over time.
Palo Alto’s 2025 Citywide Greenhouse Gas Emissions Inventory
The 2025 Palo Alto Citywide GHG inventory follows the calculation and reporting standards
outlined in the GPC BASIC reporting level.7 This inventory follows the city-inducted framework
in the GPC protocol, which totals GHG emissions attributable to activities taking place within
the geographic boundary of the city.8 Preliminary calculations show that in 2025, Palo Alto
emitted an estimated 406,607 metric tons (MT) of carbon dioxide equivalent (CO2e) from the
residential, commercial, industrial, transportation, waste, water, and municipal sectors.
Compared with the 1990 base-year emissions, these emissions represent a 49.1% decrease in
total community emissions, despite a 20.5% population increase during the same period.
Emissions in 2025 equated to 6.0 MT CO2e per capita. The California Air Resource Board’s 2017
Scoping Plan Update recommends a goal for local governments of 6 MT CO2e per capita by
7 GPC Executive Summary; https://ghgprotocol.org/sites/default/files/2022-12/GPC_Executive_Summary_1.pdf
8 GPC Protocol; https://ghgprotocol.org/sites/default/files/standards/GHGP_GPC_0.pdf
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2030 and 2 MT CO2e per capita by 2050.9 To achieve an 80% reduction in GHG emissions,
Citywide GHG Emissions need to be 160,000 MT CO2e.
Of the GHG emissions reductions to date, 47.4% came from providing carbon-free electricity for
the City’s electricity portfolio, 22.3% from declines in transportation emissions, 16.3% from
reductions in natural gas (methane) consumption, 11.9% from declines in solid waste emissions,
and 1.9% from declines in wastewater-related emissions.
In 2025, 64.3% of citywide GHG emissions were from Transportation and Mobile Sources, 31.9%
from Natural Gas (Methane) Use, and the remainder from other sources. As shown in Figure 2,
the two largest categories of emissions are Transportation and Mobile Sources (including On-
Road Transportation, Airport Emissions, Off-Road Vehicles and Equipment, and Caltrain
Commuter Rail) and Natural Gas (Methane) Use (including Residential, Commercial, and
Industrial).
Figure 2: 2025 Palo Alto Citywide Greenhouse Gas Emissions by Sector
The majority of GHG emissions,
64.3% (261,430 MT CO2e), are
attributed to Transportation and
Mobile Sources. The main driver
of these emissions is fuel
combustion from internal
combustion engine (ICE)
vehicles, specifically passenger
vehicles (72% of all
transportation emissions),
commercial vehicles (17% of all
transportation emissions), and
buses (2% of all transportation
emissions). Since electricity in
the City is carbon-neutral, there
are no GHG emissions attributed
to passenger, commercial, or bus electric vehicles (EVs). Off-road vehicles and equipment
account for 8% of all Transportation and Mobile Sources GHG emissions, while Aviation Fuel
accounts for 1%. Additionally, since Caltrain fully electrified the line serving Palo Alto in 2025
and now powers it with 100% renewable electricity, there are no GHG emissions associated
with commuter rail.
9 California Air Resources Board 2022 Scoping Plan Appendix D Local Actions, November 2022;
https://ww2.arb.ca.gov/sites/default/files/2022-11/2022-sp-appendix-d-local-actions.pdf
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The second major contributor to GHG emissions is stationary combustion and the leakage of
natural gas (methane). Together, these account for 33% (134,123 MT CO2e) of communitywide
GHG emissions. About 43% of total Natural Gas (Methane) GHG emissions are attributed to
residential natural gas combustion, 48% is attributed to commercial natural gas combustion,
and 6% is attributed to industrial natural gas combustion. Natural gas leakage from distribution
infrastructure occurs upstream of individual gas meters and is associated with community-wide
gas use. Therefore, it is included in the inventory. Natural gas leakage accounts for 3% of total
Natural Gas (Methane) GHG emissions.
As shown in Figure 3, total GHG emissions steadily decreased between 1990 and 2021.
However, emissions increased between 2021 and 2022 and slightly increased between 2022
and 2023. The main driver of the increase in 2022 was On-Road Transportation, in part due to
the shift away from pandemic-level (reduced) driving frequency, returning to the office after
working from home, and economic recovery. These effects likely persisted into 2023 as
employers continued to adjust hybrid work policies and economic and travel activity shifted.
Figure 3: Palo Alto Citywide Greenhouse Gas Emissions by Sector, 1990 and 2019-2025
GHG emissions from Transportation and Mobile Sources are estimated to have increased 2.5%
between 2024 and 2025 but remain 25% lower than 1990 Transportation and Mobile Sources
emissions. Within Transportation and Mobile Sources, On-Road Transportation (passenger
vehicle, commercial vehicle, and bus emissions) increased 5.5%. A notable factor contributing
to the increase in On-Road Transportation emissions is the update from the California Air
Resources Board’s EMFAC2021 to EMFAC2025 emissions factors model. Between the two
model versions, the Santa Clara County passenger vehicle emissions factor increased by about
8%, and the commercial vehicle emissions factor increased by over 1%. While emission factors
typically decrease year over year as the vehicle fleet becomes cleaner and more fuel-efficient,
this increase is attributable to a methodology update in EMFAC2025 that likely also
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incorporates more recent vehicle registration data from the Department of Motor Vehicles.
This update reflects accuracy improvements rather than an actual increase in per-mile GHG
emissions. Another factor to note is that vehicle miles traveled (VMT) data for 2025 are not
available; however, VMT data will be available for 2026. City staff and external experts
calculated a preliminary estimate of 2025 VMT by scaling 2023 per capita VMT (the most recent
year VMT data is available) based on 2025 population for passenger vehicles and service
population for commercial vehicles and buses. This estimate reflects demographic growth and
may not capture actual VMT trends.
Electric vehicle (EV) adoption continued to grow significantly in 2025 across all vehicle
categories. Internal-internal passenger EV VMT share doubled from approximately 10% in 2024
to 20% in 2025 (vehicles that have an origin and destination within Palo Alto), and internal-
external passenger EV VMT share nearly doubled from 7% to 15% (vehicles that have an origin
or destination inside Palo Alto and a destination or origin outside of Palo Alto). Commercial EV
VMT share also grew substantially, from less than 1% to approximately 2% for all trip types. Bus
EV VMT share increased from 2% to 7%. Table 1 shows the number of residential electric
vehicles registered in Palo Alto since 2018.
Table 1: Palo Alto Residential Registered Electric Vehicles (EVs)
Residential Registered
Vehicles 2018 2019 2020 2021 2022 2023 2024 2025
Battery EVs (BEV) 2,762 3,253 3,550 4,142 5,062 6,475 7,929 11,599
Plug-in Hybrid EVs (PHEV) 1,038 1,194 1,301 1,357 1,434 1,544 1,744 1,844
Total BEVs and PHEVs 3,800 4,447 4,851 5,499 6,496 8,019 9,673 13,443
All Vehicles 57,340 55,911 50,004 50,192 49,963 50,000* 50,000* 52,170*
Percentage EV share 6.7% 8% 9.7% 10.7% 13% 16% 19.3% 26.9%
% of New Car Sales that are
EV
* Estimate, not actual numbers from the Department of Motor Vehicles
A significant methodological change in the 2025 inventory is the 100% reduction of Caltrain
commuter rail emissions. Caltrain completed full electrification of the line serving Palo Alto in
2025 and operates it on 100% renewable electricity, resulting in zero direct GHG emissions.
Accordingly, commuter rail emissions, which were 6,331 MT CO2e in 2024 due to diesel
combustion, are reported as zero in 2025. Off-road diesel emissions increased by 5%, while off-
road gasoline decreased by 2%, and aviation fuel emissions increased by 4% compared to 2024.
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Natural Gas (Methane) combustion emissions increased by 2.2% in 2025 compared to 2024,
driven by an 8.1% increase in commercial natural gas emissions. Residential natural gas GHG
emissions decreased by 1.5% and industrial natural gas emissions decreased by 11.6%
compared to 2024. These fluctuations reflect variability in natural gas consumption driven by
weather conditions, energy efficiency improvements, occupant behavior, and community
growth. Overall, Natural Gas (Methane) emissions were 31.9% below 1990 levels. Figure 4
shows historical trends in residential natural gas (methane) GHG emissions.
Figure 4. Palo Alto Residential Natural Gas (Methane) Greenhouse Gas Emissions
The City’s electrification programs have contributed to the decrease in residential natural gas
(methane) emissions. Table 2 shows the progress in replacing gas water heaters and gas
heating, ventilation, and air conditioning (HVAC) systems with electric heat pump water heaters
and electric heat pump HVAC systems, as well as the number of all electric homes, through City
programs.
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Table 2: Progress in Electrifying Gas Appliances & All Electric Homes through City Programs
City Electrification Program 2019 2020 2021 2022 2023 2024 2025
Heat Pump Water Heaters (annual units
installed) 3 25 24 27 206 276 213
installed) 2 99
Palo Alto’s 2025 Municipal Greenhouse Gas Emissions Inventory
The 2025 Municipal GHG Inventory follows the calculation and reporting standards outlined in
the International Council for Local Environmental Initiatives’ (ICLEI) Local Government
Operation (LGO) Protocol,10 which aligns with the Global Protocol for Community-Scale GHG
Emissions Inventories (GPC) local government operations protocol.11
Under the LGO Protocol, GHG emissions from the City’s municipal operations can also be
classified into discrete subsectors related to five main sectors:
•Buildings and other facilities: Electricity use, natural gas combustion, water-energy
consumption
•Streetlights and Traffic Signals: Electricity use
•City vehicle and equipment fleet: On- and off-road mobile combustion and electricity
use from electric vehicles (EVs)
•Wastewater facilities (e.g., wastewater treatment and discharge): Indirect nitrous oxide
emissions, process nitrous oxide emissions, electricity use, natural gas combustion
•Indirect emissions: Employee commuting, landfilled solid waste generation
Preliminary calculations show that in 2025, the City emitted a total of 15,023 MT CO2e from
municipal operations, a 3% increase over 2024. GHG emissions from Palo Alto’s municipal
operations are from five main sectors: Buildings and Other Facilities, Streetlights and Traffic
Signals, Wastewater Facilities, City Vehicles and Equipment, and Indirect Emissions. Since the
methodology has changed significantly for certain sectors since the first Municipal GHG
Inventory was conducted in 2005, it is no longer possible to do an equivalent comparison with
previous Municipal GHG inventories. However, the methodologies for Buildings and Other
10 LGO Protocol Rulebook. Available at: https://icleiusa.org/resources/local-government-operations-lgo-protocol/
11 GPC Inventories for local government operations. Appendix B. Available at:
https://ghgprotocol.org/sites/default/files/standards/GPC_Full_MASTER_RW_v7.pdf
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Facilities, Streetlights and Traffic Signals, and City Vehicles and Equipment are sufficiently
similar to allow rough comparisons across these sectors. By the end of 2025, the City reduced
total municipal GHG emissions by roughly 62.9% from the 2005 baseline.
The Municipal Greenhouse Gas Emissions Inventory is still being finalized, so further analysis
will be provided at a City Council Meeting later this fall. Preliminary results indicate that the
largest contributor to municipal GHG emissions, about 38.9%, is the Regional Water Quality
Control Plant (RWQCP). Since the RWQCP is owned and operated by the City, 100% of the GHG
emissions are attributed to the City. RWQCP emissions increased by 9% compared to 2024 due
to higher effluent discharge fugitive emissions, but are 48.2% below 2005 levels. As the City
works to bring online renovated aeration basins through the Secondary Treatment Upgrades
project, the Plant’s ammonia (and therefore total inorganic nitrogen) is fluctuating more than
normal and the Plant saw some decreased removal (more ammonia in the discharge) when
comparing 2024 to 2025. This is expected as the City starts to bring online a new secondary
treatment system that focuses on full nitrogen removal and not just conversion of ammonia to
nitrate. Elevated ammonia concentrations in the discharge are expected to continue until all
four aeration basins are renovated and the system stabilizes. Once the system is fully
optimized, N₂O emissions should decrease significantly. Based on the current schedule, startup
is anticipated in 2027, material improvement is expected in 2028, and the full benefit should be
realized around 2030.
The second major contributor to GHG emissions is attributed to the Indirect Emissions Sources
sector, or the City’s Scope 3 sources. These indirect sources account for about 32.5% of total
municipal GHG emissions and include employee commutes and methane from landfilled solid
waste. Indirect Emissions Sources increased by 2.4% in 2024, driven by higher employee
commute emissions.
The largest reduction in municipal GHG emissions is in Buildings and Other Facilities, which
decreased 6.2% from 2024 and 72.3% from 2005, due to reductions in Natural Gas (Methane)
Combustion.
Since electricity in the City is carbon-neutral, there are no GHG emissions from electricity
consumption in City-owned buildings and facilities, streetlight and traffic signals, EVs, or City
water-energy consumption.
The City continues to make progress in replacing internal combustion engine passenger vehicle
and light duty truck fleet vehicles with electric vehicles whenever they are due for retirement,
provided a suitable EV model is available in the marketplace. Table 3 shows the number of
electric vehicles in the City fleet.
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Table 3: Electric Vehicles in City of Palo Alto Fleet
Palo Alto Fleet Electric Vehicles (EVs) (# of vehicles)
Number of New EVs Purchased 2 2 19 7 6
Total Active EVs in Fleet 4 6 17 33 41
EV% of Passenger Vehicles and Light Duty Trucks 2.5% 4% 11% 22% 27%
Consumption-Based Greenhouse Gas Inventory
As previously discussed, there are two types of GHG inventories – generation-based and
consumption-based. A generation-based emissions inventory is generally best suited to track
GHGs and to inform policies related to energy use in buildings and transportation, as well as
emissions from in-city waste sources. A consumption-based emissions inventory is more useful
for understanding where embedded emissions generated outside city boundaries constitute a
significant portion of the carbon footprint of household and government consumption. These
embedded GHG sources include all emissions associated with the production, transportation,
distribution, and disposal of the goods and services consumed. A consumption-based emissions
inventory can lead to insights about where local consumption gives rise to emissions outside a
city’s borders and suggests additional opportunities for reducing emissions.
Unlike generation-based emissions inventories, there is no standard protocol for calculating a
consumption-based emissions inventory. The California Air Resources Board (CARB) was tasked
with developing an implementation framework and accounting to track consumption-based
emissions over time, but progress updates are not currently available.12 In particular, this
framework needs to address how to account for the embodied emissions in the food, goods,
and services the community purchases that are not covered by generation-based GHG
inventories.
At the most basic level, the calculation of a consumption-based emissions inventory entails two
main inputs: a measure of what is consumed, multiplied by a measure of the GHG emissions
associated with each unit of consumption.13 For example, if a community consumes one million
tons of cement each year, and producing and transporting each ton of cement releases 1 ton of
CO2, the community’s consumption-based emissions inventory would include 1 million tons of
12 Executive Department State of California. (2019). Executive Order B-55-18 to Achieve Carbon Neutrality.
https://www.ca.gov/archive/gov39/wp-content/uploads/2018/09/9.10.18-Executive-Order.pdf.
13 Stockholm Environment Institute Consumption Based Emissions Inventory Guidebook.
https://sustainableconsumption.usdn.org/climate/cbei-guidebook/overview
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CO2 associated with cement consumption, regardless of whether that cement was produced
inside or outside the community’s jurisdictional boundaries.
A full consumption-based emissions inventory would, in principle, do something similar for all
the products and services consumed in a city. However, this can prove challenging in practice
because calculating consumption-related emissions precisely is highly complex. Communities
consume thousands of different products and services, and the emissions associated with each
are affected by many decisions made by different actors throughout their life cycles. It takes
substantial effort to understand the emissions associated with every consumption decision in
order to create an accurate consumption-based emissions inventory. Any precise estimate is
likely to become obsolete quickly as production processes and supply chains change over time
(sometimes month-to-month or week-to-week).14
Consumption-based emissions inventories can provide useful insights, but they can also paint
an incomplete picture of urban emissions patterns. Most consumption-based emissions
inventories lump consumption into categories, which can mask the fact that some goods are
more emissions-intensive than others. For example, meat production has a larger emissions
footprint than other foods. Such categorization also treats all residents’ consumption as equal,
whereas in reality, consumption levels tend to vary widely within cities. For example, research
shows that high-income households typically have a larger consumption footprint than lower-
income households. In addition, most emissions associated with different goods and services
can occur at different life-cycle phases. For instance, for food, most emissions are associated
with production, whereas for appliances, most of the emissions result from use. These
distinctions can be important when considering and prioritizing policy interventions.
The City does not currently complete a consumption-based GHG inventory, however, efforts
are underway to better understand the impact of specific Scope 3 emissions. The City adopted a
Low Carbon Concrete Ordinance which went into effect on January 1, 2023. The Ordinance
limits the amount of cement used in construction projects to reduce GHG emissions. It requires
all new construction projects to use concrete that meets strict, lower cement and embodied
carbon limits. While we do not yet have data quantifying the concrete volumes (in cubic yards)
for each building, the City began requesting concrete quantities and mix designs in June of 2025
and is developing a strategy to collect detailed data on larger commercial projects, where
multiple elements (e.g., walls, slabs, beams, footings, and piers) often use different concrete
strengths. To date, there are 270 new residential and commercial buildings that must comply
with the City’s low-carbon concrete requirements. 119 projects were completed and 151
permits were issued for projects under construction.
14 Stockholm Environment Institute Consumption Based Emissions Inventory Guidebook.
https://sustainableconsumption.usdn.org/climate/cbei-guidebook/overview
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FISCAL/RESOURCE IMPACT
No funding is being requested.
STAKEHOLDER ENGAGEMENT
Stakeholder engagement for S/CAP implementation is broad-based and coordinated across
multiple departments. Efforts include direct engagement, webinars, social media and other
digital marketing/outreach, website updates, public signage, participation in Sustainability and
Climate Action Committee meetings, leveraging the City’s communication platforms, and more.
ENVIRONMENTAL REVIEW
The Climate Action and Sustainability Committee’s preview of the 2025 Greenhouse Gas
Inventory does not meet the definition of a project requiring CEQA review under Public
Resources Code section 21065, since it will not cause a physical change in the environment. In
June 2023, City Council certified the Comprehensive Plan Environmental Impact Report
Addendum: Update to the Sustainability and Climate Action Plan. The strategies proposed in
the 2026-2027 S/CAP Work Plan are consistent with the Sustainability and Climate Action Plan
(S/CAP), the 2023-2025 S/CAP Work Plan, and the Comprehensive Plan. Potential
environmental impacts of this project were studied in the June 5, 2023, S/CAP Addendum to
the 2017-2031 Comprehensive Plan EIR.
ATTACHMENTS
None
APPROVED BY:
Brad Eggleston, Director Public Works/City Engineer
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Climate Action and Sustainability Committee
Staff Report
Report Type: ACTION ITEMS
Lead Department: City Clerk
Meeting Date: September 4, 2026
Report #:2608-6662
TITLE
Overview of Approaches to Achieving the City's Carbon Neutrality Goal and Committee
Feedback on Areas for Further Staff Analysis; CEQA Status - Not a Project
This item will be a late packet publication on 8/27/26.
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Climate Action and Sustainability Committee
Staff Report
From: City Manager
Report Type: ACTION ITEMS
Lead Department: Public Works
Meeting Date: September 4, 2026
Report #:2607-6581
TITLE
Overview of Approaches to Achieving the City's Carbon Neutrality Goal and Committee
Feedback on Areas for Further Staff Analysis; CEQA Status - Not a Project
RECOMMENDATION
This is a discussion item and no action is requested. Staff will present an overview of
approaches to achieving the City’s Carbon Neutrality Goal and seek Climate Action and
Sustainability Committee feedback on approaches for staff to focus on and types of offsets to
consider.
EXECUTIVE SUMMARY
The 2026-2027 Sustainability and Climate Action Plan (S/CAP) Work Plan, Work Item CA-15,
involves investigating how to achieve community carbon neutrality by 2030, offsetting
emissions from buildings and vehicles in advance of their electrification. Staff will present
various approaches and request feedback on which to explore further. Almost all remaining
community emissions come from either natural gas use or transportation, and the City’s gas
utility already offsets the natural gas emissions associated with the City’s purchase of gas
distributed to ratepayers. Possible strategies for offsetting the 261,600 metric tons of carbon-
dioxide equivalent (MT CO2-e) per year of transportation emissions include finding a funding
source for the City to use to purchase offsets, instituting a voluntary purchase program, or
focusing on carbon neutrality of City operations. Purchasing offsets that avoid emissions
elsewhere, like those associated with the City’s gas utility purchases, would cost about $10 per
MT CO2-e, or about $2.1 to $3.1 million per year. Removing carbon from the atmosphere,
whether in Palo Alto or outside it, is substantially more expensive.
BACKGROUND
The City Council has adopted two emissions reduction goals for the community: a goal of
reducing emissions 80% from 1990 levels by 20301 and a goal of carbon neutrality by 2030,2
1 City Council, April 18, 2016; Agenda Item #10; SR #6754,
https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=79086&dbid=0&repo=PaloAlto
2 City Council, October 3, 2022; Agenda Item #9; SR #14720,
https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=82036&dbid=0&repo=PaloAlto
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with the intent of reducing local emissions as much as possible and neutralizing the remaining
emissions. As of the end of 2025, the City had reduced emissions 49% from 1990 levels,
resulting in 2025 emissions levels of about 407,000 MT CO2-e per year. Of that, about 134,000
MT CO2-e per year comes from natural gas. The City’s gas utility charges gas users to offset
these emissions. To achieve carbon neutrality based on 2025 emissions levels would require
offsetting the remaining 273,000 MT CO2-e, 96% of which come from transportation, with the
remainder from waste and wastewater processing.
ANALYSIS
Staff has identified three potential strategies for offsetting transportation emissions:
Identify a funding source for the City to use to purchase offsets
Create a voluntary purchase program
Carbon neutrality for City operations
Having the City purchase offsets to neutralize community emissions is the simplest option, but
finding the $2.1 to $3.1 million per year needed from existing revenues is a challenge, given City
budget constraints and the limited availability of other funding sources. A voluntary program
could pay for itself with enough participation but would be unlikely to fully achieve the
community carbon neutrality goal. Staff recommends focusing further exploration on carbon
neutrality for City operations and a voluntary purchase program for community members.
For City operations, the simplest approach would involve buying offsets to cover the
approximately 15,000 MT CO2-e per year in municipal emissions while simultaneously
continuing to prioritize direct emissions reductions. Staff could also research whether there are
other innovative approaches to managing operations to offset emissions intensity.
With adequate funding from a source to be identified, the lowest cost option for offsetting the
community transportation emissions included in the City’s GHG inventory from residents,
commuters, and visitors are offsets meeting California Air Resources Board (CARB) standards
for use in the Cap and Invest program, which can currently be purchased for about $10 per MT
CO2-e, though market prices change. These are the type of offsets purchased by the gas utility
to offset City gas customers’ natural gas use. These offsets fund emissions reductions
elsewhere through activities like preserving forests, converting methane from livestock
operations to carbon dioxide, reducing its greenhouse gas impacts, destroying refrigerants, or
reducing methane emissions from coal mines. These types of offsets serve as stopgap
measures, offsetting local emissions temporarily, giving time to electrify local vehicles and
building equipment to achieve durable, long-term emissions reductions.
If funding were raised through a voluntary program, staff preliminarily estimates that would
require charging about $3-$4 per month for residents owning gasoline vehicles and less than
one cent per month per square foot for non-residential community members, if such a charge
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were assessed on the basis of non-residential square footage to cover the cost of commuter
and visitor gasoline vehicle emissions. These numbers are provided solely to give a sense of the
scale of the funding needed and do not necessarily reflect the way a future program would be
designed.
It is also possible to buy credits or invest in projects that remove carbon from the atmosphere
permanently, such as reforestation or industrial carbon dioxide removal. The lowest cost
approach, reforestation, costs three to seven times more than offsets, and industrial carbon
removal, such as biochar or direct air capture, can cost more than ten times as much, often far
more, since most technologies are still being commercialized.
Local approaches to carbon dioxide removal do exist, though they only have the potential to
achieve at most 1% of the reductions needed, and cost far more than offsets. Of local options
explored, expanding the urban canopy seems most feasible because it aligns with an existing
municipal program. Other options identified include a local biochar plant, reforestation in the
Foothills, an algae farm, or wetlands expansion.
FISCAL/RESOURCE IMPACT
A program using CARB-certifiable offsets results in a portfolio cost of $2.1 to $3.1 million per
year. If 1% of the offset portfolio came from local sources, it would raise that cost 5% to 10%,
since local offsets are more expensive. If funding were raised through a voluntary program staff
preliminarily estimates it would require charging about $3-$4 per month for residents owning
gasoline vehicles and less than one cent per month per square foot for non-residential
community members. Investment in carbon neutrality focusing on City operations would
involve about $150,000 in costs per year to offset about 15,000 MT CO2-e per year in municipal
emissions, but these emissions result from wastewater operations, employee commute across
all operations, and buildings and facilities, many of which are associated with Enterprise Funds
rather than the General Fund. Regardless, these investments could continue to put pressure on
operating and capital costs, despite being a more incremental approach.
STAKEHOLDER ENGAGEMENT
Staff will review these approaches with the Climate Action Working Group stakeholder group
and report feedback from that discussion at the September 4, 2026 Climate Action and
Sustainability Committee meeting.
ENVIRONMENTAL REVIEW
Discussion of approaches to carbon neutrality and areas of focus for future staff exploration is
not a project subject to review under the California Environmental Quality Act (CEQA).
ATTACHMENTS
None
APPROVED BY:
Brad Eggleston, Director Public Works/City Engineer
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