Can Bay Area Political Leaders Solve Climate Change?

Marc Joffe

Passing laws, adopting regulations, and spending money to fight climate change are popular activities for both elected and unelected officials in the San Francisco Bay Area. But since they only govern 2.3 percent of the U.S. population, their ability to turn the tide on greenhouse gas emissions is limited. Instead, their costly and coercive policies drive up the area’s cost of living and help drive out residents.

In a previous post I described some of the high cost, low ridership Bay Area transit projects that raise local sales taxes while replacing only a handful of car trips. Since I last wrote, we have learned that San Francisco’s new $2,000,000,000 Central Subway is afflicted by serious water intrusion issues, making the travel experience less appealing for the roughly 1,000 passengers that use the Chinatown station each day.

More recently, local lawmakers have declared war on natural gas, an energy source that used to be popular with some environmentalists because it burns more cleanly than other fossil fuels. But now the intention is to fully embrace electricity even though California is unwilling to add nuclear generating capacity and lacks the enormous number of solar panels and windmills needed to fully power the state.

The war on natural gas started in Berkeley, the birthplace of many ill‐​advised policies. In 2019, the City Council banned natural gas hookups in most new buildings. This law made it effectively impossible to install gas ovens in new construction, whether residential or commercial. The latter triggered concern from the California Restaurant Association, which filed suit claiming that Berkeley’s ban was preempted by federal law. After the Association’s claim was dismissed by a District court, a panel of judges from the Ninth Circuit ruled in its favor. The judges concluded that the Berkeley ordinance conflicted with the Energy Policy and Conservation Act which prohibits “State and local regulations concerning the energy use of many natural gas appliances, including those used in household and restaurant kitchens.” Even though Berkeley did not try to regulate appliances directly, the court found that forbidding their connection to gas lines was a distinction without a difference.

Dozens of other local governments in the Bay Area and beyond have also adopted natural gas restrictions, and it now remains to be seen how these ordinances will be affected by the Ninth Circuit ruling. But attempts to restrict gas appliances at the local, state, and federal level are prompting a backlash from moderate and conservative lawmakers.

The Texas legislature passed, and Governor Greg Abbot signed a law in 2021 that prevents local governments from banning natural gas. Florida adopted similar legislation earlier this year, as have several other states.

At the federal level, the House of Representatives recently passed the “Gas Stove Protection and Freedom Act” (HR 1615) which denies the Consumer Product Safety Commission funding to implement any restrictions on gas stoves. Although this bill’s future in the Senate is uncertain, it is notable that the measure received support from several House Democrats.

It is ironic that the debate has focused on gas stoves, since these appliances account for a fraction of one percent of U.S. greenhouse gas emissions. But other gas appliances generate emissions, and these have also come under attack from Bay Area leaders.

In March 2023, the Bay Area Air Quality Management District (BAAQMD) introduced a ban on furnaces and water heaters that generate Nitrogen Oxide. BAAQMD couched this move as an air pollution reduction measure, noting that gas‐​powered furnaces and water heaters vent their exhaust to the outdoors, unlike stoves which were gas not included in the ban.

But the climate effects of natural gas appeared to be on the district’s agenda as well. It calculated that the ban would reduce greenhouse gas emissions by 4,810,000 metric tons of carbon dioxide equivalent annually by 2046. This savings amount to less than 0.1 percent of current U.S. greenhouse gas emissions.

While the new regulations will not materially affect global warming, they will impose substantial costs on Bay Area homeowners. After reviewing publicly available installation cost data, the Air‐​Conditioning, Heating, and Refrigeration Institute (AHRI) found that the average cost of buying and installing an electric water heater in the Bay Area was $8,577. Electric heat pumps (to replace gas furnaces) were even more expensive, averaging $22,745 per installation. Costs are particularly high for older homes where the main electrical service panel may lack the capacity to power additional 240v appliances, and which may also require ductwork and rewiring.

The new mandate also has implications for tiny houses. A local contractor, Dan McDunn, told me that he used to use exterior mounted, gas, on demand water heaters for the Accessory Dwelling Units (ADUs) he has been building for Bay Area homeowners in their backyards. ADUs are a favorite of YIMBYs who are trying to increase the local housing stock. Unfortunately, electric water heaters have a much larger footprint, taking up about 10‐​square feet even in a tiny home. While this may seem small, it represents close to five percent of the floor space in a 220‐​square foot ADU.

A better option to reduce nitrogen oxide and greenhouse gas emissions might have been to provide incentives for homeowners to gradually replace their gas appliances, but bans appear to be more newsworthy. And, in the Bay Area, it too often seems that developing a reputation for fighting climate change is more important than doing so cost‐​effectively.

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