Gavin Newsom: California to Phase Out Gas-Powered Cars by 2035 Transcript

Mary Nichols: (00:00) Odd that makes people sick. And also at the same time, try to get ahead of this escalating climate problem. We have in our agency a tremendous record going back to the late 60s of having seen what technology could do, and particularly with a focus on the kinds of technology that affect mobility because California is, as the governor was saying, a state that's all about mobility. I myself did not have the opportunity to grow up in California. I moved here as an adult. My kids are native California, so they can take it for granted, but I can never forget what an amazing revelation it was to come to this place and to be able to live in a climate, which means weather but it means more than that because that's a social and economic climate of innovation and openness. It is what brought me here. And it's what brought so many other people here. Mary Nichols: (01:01) And so we know we have an obligation to keep on working to clean up the air and to make it as clean as it can be, and to be ahead of the curve when it comes to technologies knowing where industry can go, where we can help them to go, maybe sometimes with a push, but always by setting a standard that's based on technology and science that then the private sector and the consumers can step up and embrace. So that's what we're doing here with an executive order that will transform the California transportation picture completely. Mary Nichols: (01:45) In 15 years, it will have dramatically reduced the emissions from this industry. And it brought in a whole new generation of cleaner, more efficient vehicles that are exactly the kind of vehicles that people around the world want. And we get to be at the head of the line of places that will be getting them because we've had the vision, the leadership of our governor and the opportunity because of our state's... in spite of everything, our ability, and willingness to step up and take bold actions. So I really want to thank the governor for having given us the direction to help us to implement this executive order. And I just could not be prouder personally of my agency and the people that I work with for being ready when the call came to step forward with some language and some ideas, which we believe are going to actually make this work. So thank you very much, sir. And I'll let you get on the signage. Gavin Newsom: (02:56) Thank you, Mary. Okay. If I can just sum this up, I recognize and I think a lot of us do that there's a little bit of goal fatigue as it relates to climate policy and we're hesitant to establish even more goals. We are now committing ourselves to implementing those goals. We have gone from the what to the why, and now we need to focus on the how business. And so that's the big announcement. Today is a bold step forward to target the number one sector of our economy in terms of emissions, and that is in our transportation sector and to encourage other states to take similar leadership and this nation to move forward boldly to do exactly the same. Gavin Newsom: (03:44) We want more choice. We want more competition. We want more innovation. We want more economic growth. We want more inclusion in terms of those policies. We want cleaner air, cleaner water. We want to reduce healthcare costs and we want to increase our manufacturing base and our exports. That's what we believe we are significantly advancing here today. With that though, we advanced nothing if we don't marry advance to the cause that brought us here and that's signing this executive order. Mary Nichols: (04:17) I'm just a little worried. I want it signed. Gavin Newsom: (04:20) This means nothing unless we sign it. So why don't we go back there? We're going to pick the Ford only because we're appreciating Bill Ford's leadership. Everybody come on up. This is slightly strange place to sign something. I don't know if the governor has ever signed on a car. All right let's do it. Thank you Mary. Gavin Newsom: (05:40) With that, happy to take any questions. Where are we? Oh, there we are. Dustin Gardner: (05:45) Thank you, Governor. I'm Dustin Gardner from the San Francisco Chronicle and I'll be asking questions on behalf of the Press Corps. Several people have asked about your conversations with automakers. Manufacturers have long been concerned about the prospect of having to make one car for California and another car for the rest of the country. What sort of reaction do you anticipate from them? Gavin Newsom: (06:04) Well, we have six car companies, some of the largest manufacturers in the world that happened to be American automobile manufacturers that have voluntarily agreed to join California in our efforts to maintain the Obama era vehicle emissions and tailpipe emissions standards, regardless of the efforts by the Trump administration to roll them back. That says everything you need to know. And that's a direct answer to your question. These companies get it, and they're getting it done by putting billions and billions of dollars of investment in research and development because they recognize the trend lines around the rest of the world. They recognize that they're not going to be able to compete on a global scale unless they're creating cars that people want and countries are demanding. And so that's why we believe this only advances that cause, creates clarity, create some certainty. It's a 15 year process, which creates the opportunity to bring down costs, advance innovation, and create an opportunity for these manufacturers to become once again, best in class from a globally competitive perspective. Dustin Gardner: (07:08) Next question from Alejandro Lazo, Wall Street Journal. Why are you pursuing this zero emissions policy through executive order versus through passing legislation? Could this approach possibly lead to more legal challenges? Gavin Newsom: (07:21) Well, we're moving forward expeditiously because this moment demands leadership, it demands movement. The California Resources Board and its well-established standards of responsibility and well-established framework of constitutional authority will advance the next steps in this effort, similarly what they just did on the clean truck mandate. It is tried and true well-established rule of law and an effort that advanced under the clean truck rules that is also now being replicated by 15 other states, at least committed a replication of 15 other states. So we believe in the power of emulation. We believe successful policy leaves clues and we believe the adaptation and adoption in other states is inevitable. Dustin Gardner: (08:10) We have quite a few questions about fracking and oil drilling permits. You referred to possibly working with the legislature to take some action there to end fracking. Do you not have that power now through executive order? Why do you not do that now if you have that ability? Gavin Newsom: (08:25) Well, we simply don't have that authority. That's why we need the legislature to prove it. We put in this executive order specific timeline in terms of transitioning and ending fracking in the state of California. I want to put fracking in perspective, it's less than 2% of the production in the state of California. It is substantive, but it also is symbolic. We have to do more on the demand side and that's why today we think we've made a bold and big step in advancing that cause. Gavin Newsom: (08:52) We also have advanced the cause a number of months ago to take scientific approach to analyze and this is what we believe. We believe in science, not anecdote, not opinion. We believe in science. We're driven by science. This relates to our health policies and our response to COVID and it relates to climate and climate change. We believe in science based rulemaking. And that rulemaking is underway through CalGEM, which is the regulatory agency in this space to put in place a framework around health and safety standards as well, and the possibility of mitigation zones, buffer zones to advance the cause of public health and safety as well in addition to the efforts around fracking. Dustin Gardner: (09:33) Next question from Lauren Sumner, NPR News. Given that electric cars are still a small share of the market, what incentives do you plan to put in place to encourage Californians to buy EVs? Gavin Newsom: (09:46) Well, again, we're 50% of the market in the United States. So the adaptation is significant in this state. It's grown exponentially over the last number of years. More models, more choice for consumers coming out, the costs beginning to decline. We're just a few years away from parody. We believe this policy 15 years hence will accelerate that adaptation of new technologies, which will be breakthrough technologies, bringing down costs, increasing choice, creating economic opportunities. And so we'll continue the tried and true policies in this state to incentivize through credits, incentivize through vouchers and rebates, efforts to advance not just again, electric vehicles in the state, but zero emission vehicles. We are not wedded to one particular technology. We just want to fundamentally reconcile the fact we're no longer living in the 19th century and we don't need to drill things, extract things in order to advance our economic goals and advance our mobility needs. Dustin Gardner: (10:49) Building on that question about electric vehicle rebates, the current budget cuts funding for rebates. Why is that? And what sort of strategy do you have in mind for a new rebate structure? Gavin Newsom: (11:00) Yeah. And we've been struggling as everybody knows the $54.3 billion shortfall, simply without precedent to go from a $6.6 billion projected surplus just a few months ago to an unprecedented shortfall a few months later. And as a consequence, we've had to review our commitments across the spectrum, but I can assure you this. We are committed to not just the short-term, but the medium and longterm in achieving these goals in a way that incentivizes adoption and adaptation. And you'll be seeing a lot more in this space in my January budget. Gavin Newsom: (11:38) And we look forward now that we're getting some stability back in the economy to more robust results from our cap and trade auctions, which will also aid and advance these efforts. The last auction produced much better results than the previous auction, which will also provide more resources to invest in precisely those programs that you're referring to. Dustin Gardner: (12:00) Next question, Tony Barboza, LA Times. How would California be able to carry out this zero emissions mandate if the Trump administration's relocation of the state's federal emissions waiver holds up in court? Gavin Newsom: (12:13) I'm going to have my legal advisor answer that question. Mary Nichols: (12:17) Thank you. So we are challenging the interpretation of the law by the Trump administration. We believe the Clean Air Act gives us the authority to set exactly the kinds of standards that we have set since the late 60s, and therefore we look forward to being able to do that in the future. That's the answer. I mean, we're in court. We'll get there eventually, but in the meantime, we continue to lay out the course and gather support. We have more states now than ever who have joined with us. So we have over half the states in the United States who filed legal briefs supporting California's position here. I don't think Congress wants to amend the Clean Air Act to take away California's leadership role, which we've had since the very beginning. In fact, we see the opposite being the case, that they're increasingly looking to the states and giving us the opportunities to move forward where we can do that ahead of the federal government. Gavin Newsom: (13:18) And I think it's very telling that these six automobile manufacturers have joined that cause. So the question is, "Who's bidding is the president and the administration doing? If the assertion is they're doing it on behalf of manufacturers, well, why is Volvo and BMW, why is Honda and Ford joining our efforts? Why are they committed to stay in the course?" And that is a question that I look forward to being answered by this administration and the incredible vandalism that's been done to the Environmental Protection Agency in the last three and a half years. Dustin Gardner: (13:57) Next question comes from Nicole Nixon at Cap Radio News. She asks, "Environmental groups are calling for phasing out electric vehicles by 2030. Why are you sticking with the 2035 timeline?" Gavin Newsom: (14:09) Oh, we're doing something that no other state has ever done in history and arguably, this is the most significant effort its kind anywhere in the world because it comes with the California Resources Board it's backing. So forgive us. We're very proud of this effort. And to the extent we need to do more and do better, none of us are ideological. Dustin Gardner: (14:32) Wilson at the Desert Sun. How does your executive order and climate initiative address ongoing large oil spills in California, spills that release greenhouse gases and harmful air pollution while often generating profits for the polluters? Gavin Newsom: (14:49) Well, we've been very aggressive in terms of our enforcement. We've substantially invested in CalGEM, put together new guidelines and new staffing, new requirements, more aggressive oversight, new leadership at CalGEM, who's responsible in that space. And we put together this scientific based study to look at the impacts of health and safety that will be concluded, the fruits of that effort, at the end of the calendar year, in addition to the two studies on just transition one that has to do with transportation fleets, the others that have to do with issues of fossil fuel broadly, not just fracking specifically. Those two studies are backed by $3 million of investment and are being conducted by our own University of California. First draft of those studies come out on November 1st. Dustin Gardner: (15:41) How would this order affect hybrids, plug-in hybrids specifically? That's actually the most popular model of EV in the state right now. Would they still be allowed under this order? Gavin Newsom: (15:53) I'll have Mary who can talk more specific about makes and models. Mary Nichols: (15:56) Yeah, so we're transitioning away from hybrid and in the direction of full zero emission, but that's a 15 year process. And in the meantime, for some people, it's a lot more comfortable to try out a hybrid first. But what we're seeing is as hybrids get more and more advanced, they become closer and closer to zero emissions. When I first started, the Toyota Prius was the most advanced car anybody had ever seen and it didn't have a plug, and then eventually they moved in the direction of having a small electric engine. And then their customers said, "Wait a minute, I like driving on electric. I want more because it improves my fuel economy." So we see this 15 year period as one during which, by the end of it, people will recognize that yes, they can find a full zero emission vehicle that meets all of their needs. Dustin Gardner: (16:48) People have asked about affordability of these models especially for low income buyers. Some of the models you're standing in front of costs $30,000 or more. What in the new rebate structure will the state provide to make sure there is equity for low income buyers? Mary Nichols: (17:07) Well, I think you heard earlier that there was an announcement yesterday from Tesla about things that they're doing to bring the cost of batteries down. The main element in the cost of an electric vehicle is the battery cost. Batteries have been getting both a lot more capable in terms of their range and mileage range and also more capable of doing it with a smaller volume and a lower cost. Now, that was just one manufacturer, but there's an arms race going on here. It's an electric race to get to cheaper and more effective batteries, and it's one that manufacturers around the world are competing in because that's the prize is the zero emission vehicle that's affordable by everybody. And you're going to be seeing announcements. I think there was one actually occurred this morning on the part of Volkswagen, which a couple of years ago we were citing for violations of emission standards with their diesel engines. Mary Nichols: (18:13) They've already announced their plans to become a fully electric company, only making electric vehicles. And today they unveiled a new model, which is the first compact SUV that's fully electric. I haven't had a chance to drive one, but I know for a price they'd let me put down a reservation. They're ready to sell them. So I think they're seeing a really quick transition here and it's in the direction of affordability. But in addition, I want to say that we aren't just waiting for the price to come down. Many people can't afford a new car, whatever the price is and the need to place electric vehicles in places where people can utilize them and enjoy the benefits and the whole community can enjoy the benefits of zero emissions is important too. Mary Nichols: (19:04) So we have programs underway to encourage electric bicycles, electric scooters, used electric vehicles, community shared electric vehicles, organizations that will be helping to provide carpooling that's fully zero, and last but not least, our transit agencies which are now in very sad shape because of the recession and which also need to be making the transition to zero emission buses. We need to be working with them directly and that's not just CARB, it's Cal Style, the transportation agency, Caltrans and others who are really working creatively to figure out ways to help more people utilize our transit system. So it's an all of the above. Gavin Newsom: (19:47) And I appreciate Mary bringing that up because in the executive order we talk in terms of our streets. We talk bicycle. We talk about transit. We also call out specifically the work that we've been doing. Mary led on previous administration led on low carbon fuel standards and the transition of some of our largest refineries in the state of California. I'd point to two examples recently. Phillips 66 and marathon refineries that are beginning to transition their fuels and their manufacturing facilities. That's happening in real time. That's an extraordinary proving to the opportunity to transition, create jobs and do so in a sustainable way. Gavin Newsom: (20:26) And we specifically in this executive order call out strategies to move away from red tape in that space to a red carpet mentality in terms of securing and encouraging that transition in a much more expeditious manner. But the bottom line is this when it comes to cost, just consider these two proof points, just in the last decade, the cost of wind has dropped in half and the cost of solar just in the last decade has dropped 85%. The cost question is dissipating significantly. That gap is beginning to go away. And just in the next few years, you will see price parody in this space with these new cars. And again, our mandate is 15 years hence, and I think the issue of costs will substantially be, and may I say this intentionally in our rear view mirror. Dustin Gardner: (21:21) Last question here and again, this is from Janet Wilson at the Desert Sun. She asks about steam fracking, "Your order addresses hydraulic fracking. Steam fracking is also shown to be a dangerous technique to workers and wildlife. Why does your executive order not address this extraction technique?" Gavin Newsom: (21:38) Well, we put a moratorium on cyclic steam fracking number of months ago. We have strategies in place that are being advanced specifically by CalGEM on the regulatory side, but I would be remiss because he is standing to my right, not to have the person responsible in this space not answer that question with a little bit more clarity, the head of our natural resource agency, Wade Crowfoot. Wade Crowfoot: (22:05) Thanks Governor. Well, the Governor is absolutely right. He has made it clear that there is a zero tolerance policy for these inland oil spills that are also called surface expressions. CalGEM is implementing right now a strengthened rule to ensure the surface expressions don't happen that passed in April and is being implemented. Likewise, the Governor mentioned that we have placed a moratorium on that high pressure cyclic steam practice that we believe led to the surface expression in Kern County that gained a lot of attention in recent months. So our CalGEM experts are very focused and heeding the Governor's very clear direction to us, which is a zero tolerance policy moving forward for these types of oil spills. Gavin Newsom: (22:57) Is that it? Well, with that, let me thank everybody for the privilege of your time, privilege of being here with Mary Nichols and our entire environmental leadership team, Tom Stier and others. And thank you all for this opportunity to explain this executive order and subsequent actions by the California Resources Board. But I will conclude by making a point and emphasizing the following. We're just getting started. We are working on a series of additional executive orders. We are committed more broadly on the whole spectrum of climate change to look at energy efficiency, to look at biodiversity, which is an area that often is under valued and under focused and looking at other areas to strengthen our bonds in terms of our commitment and our resolve to advance our low carbon green growth goals to radically changed the way we produce and consume energy here in the state of California. Last words, I think it was Plato who said, "If there's any hope for the future, those with lanterns will pass them on to others." Gavin Newsom: (24:05) And I just want to express appreciation. I reference Ronald Reagan 1967, and the work that was done in partnership with a Republican president by the name of Richard Nixon, George HW Bush advancing cap and trade to deal with acid rain, Republican governor with the name of Arnold Schwartzenegger putting into effect the largest cap and trade program, the only fully functioning cap and trade program in the United States of America, Governor Davis, that actually advanced a lot of environmental goals that often is overlooked, and of course, Governor Jerry Brown, who really set the bar in not only leadership here within the state and across the United States, but globally. Gavin Newsom: (24:46) That MOU Under2, 220 jurisdictions representing 43% of the global economy signed the equivalent of the Paris accord, doubling down on their commitment and our commitment to fill the void of national leadership as it relates to climate change. And as a governor of a state whose population is larger than 163 nations, of the 196 that signed those Paris accords, I say, amen and thank you to Governor Brown's leadership. Look forward to doing a lot more and sharing those efforts with you in the near term. Thank you all very, very much.