The findings appear in the 17th annual California Green Innovation Index, published by the research group Next 10, which tracks the state’s progress toward its long-term climate goals. While the report makes clear that California remains off pace to meet its 2030 emissions targets, it also concludes that the recent acceleration in emissions reductions has narrowed the gap. At the current trajectory, the state is now projected to reach its 2030 goal in 2035, two years earlier than last year’s estimate.
“California is making significant progress reducing greenhouse gas emissions, with huge reductions coming from the electricity sector,” said F. Noel Perry, the founder of Next 10. He emphasized the broader economic context: in the same year emissions fell, California became the world’s fourth-largest economy. “Our GDP grew as emissions declined,” he said, calling it a reminder that climate policy and economic prosperity need not be in conflict.
The data suggest that decoupling economic growth from emissions is no longer theoretical. From 2022 to 2023, greenhouse gas emissions per capita fell by 2.8 percent, while inflation-adjusted GDP per capita rose by 2.3 percent. Heavy-duty vehicle emissions declined sharply over the same period, even as goods continued to move through the state’s ports, highways and distribution centers.
Still, the pace of change remains a central concern. To meet its legally mandated goal of reducing emissions to 40 percent below 1990 levels by 2030, California would need to cut pollution by an average of 4.4 percent a year. Over the past five years, the average annual reduction has been closer to 2.8 percent. That improvement matters, but it also underscores how much faster the state would need to move to meet its deadlines.
“With a federal administration that is hostile to clean energy and climate, it is up to the states to step up and show leadership,” said Hoyu Chong, lead researcher at CEC Economics. California, he argued, has an opportunity to demonstrate that firm emissions targets and sustained investment in clean energy can deliver measurable results.
Nowhere is that more visible than in the power sector. Years of investment in solar panels, wind farms and battery storage have begun to transform how electricity is generated in the state. In 2024, renewable energy sources, including large hydroelectric facilities, accounted for more than half of California’s power mix for the first time. Fossil fuels, by contrast, fell to a record low share of just over 36 percent, continuing a multiyear decline.
Non-hydropower renewables alone grew by 4.4 percent from 2023 to 2024, the largest annual increase on record. If that pace can be sustained, California could meet its target of sourcing half its electricity from non-hydro renewables by 2026, even after missing an interim goal last year. Battery storage has played a crucial role, allowing solar and wind power generated during off-peak hours to be used when demand is highest.
“California has continued to deploy renewable energy and phased down its gas generation, delivering real emissions reductions,” said Stephanie Leonard, research director at Next 10, adding that stronger political commitment could help ensure the state meets the ambitious targets it set nearly a decade ago.
Transportation, long the state’s most stubborn source of emissions, also showed signs of meaningful progress. The sector still accounted for 38 percent of total emissions in 2023, but it recorded the largest year-over-year decline, with pollution falling 4.6 percent from 2022. Much of that improvement came from heavy-duty vehicles, where emissions dropped 17 percent, driven in part by cleaner fuels encouraged through the Low Carbon Fuel Standard.
Emissions from passenger vehicles declined more modestly, by 0.6 percent, reflecting the growing presence of electric vehicles and improvements in fuel efficiency. Emissions per mile traveled reached their lowest level on record, a milestone that researchers described as encouraging but fragile.
“Transportation emissions are finally moving in the right direction,” Perry said, while warning that policy reversals — including the elimination of federal EV tax credits and efforts to weaken California’s tailpipe standards — could slow progress just as momentum is building.
Beyond power and transportation, the report highlights areas where progress has lagged. Emissions from commercial and residential buildings have risen since 2006, largely because of increased use of high-emitting substitutes for ozone-depleting substances in refrigeration and air conditioning. And even if California meets its 2030 target, the report notes, the state would need to nearly double its annual rate of emissions reductions to reach its 2045 goal of cutting pollution 85 percent below 1990 levels.
Energy efficiency offers a mixed picture. California’s electricity rates remain among the highest in the nation, particularly for residential and commercial customers. Yet total energy consumption continues to fall. Statewide energy use in 2023 was 14 percent below its 2007 peak and slightly lower than it was in 1990, despite a population increase of more than 30 percent.
Taken together, the findings paint a portrait of a state making tangible progress while confronting the scale of the challenge ahead. California’s emissions are falling faster, its economy is growing, and clean energy is reshaping its power grid. Whether those trends can be sustained — and accelerated — will determine whether the state can meet its climate promises on time, and whether its model can offer lessons to a warming world.
Register for the 2025 California Green Innovation Index Webinar with Next 10 and CEC Economics to discuss the key findings of the 2025 California Green Innovation Index on Monday, January 12, 2025 at 12pm PT. A recording of the webinar will be available here.
California’s total statewide energy consumption was 4.3% lower in 2023 than in 1990, despite the state being 31% more populous