Report: California Fuels Policies to Save State Residents over $10 Billion in Health, Economic Costs by 2020

May 21, 2014


Joaquin McPeek, 916-492-7173,
Tim O’Connor, 916-549-8423,
Maria Bernabe, 310-735-9184,

(Sacramento – May 21, 2014) A new report, Driving California Forward from Environmental Defense Fund and the American Lung Association in California, provides a comprehensive health and economic benefit analysis of California’s fuels policies within the voter-supported landmark climate law, AB 32.

The report finds that the state’s Low Carbon Fuel Standard (LCFS) and transportation fuels under the cap and trade (C&T) program will save Californians over $10 billion in health and societal economic costs by 2020.

“The facts show that California’s transportation fuels polices are effectively cutting pollution and protecting consumers. This report shines a light on why these policies are paramount to improving air quality and saving billions of dollars in state healthcare costs. It’s what Californians have asked for and what they deserve,” said Tim O’ Connor, Director, California Climate Initiative, EDF.

Key findings of Driving California Forward include:

  • With full implementation, the LCFS and C&T will result in cumulative benefits from avoided health costs, improved energy security, and reduced social costs of carbon valued at $10.4 billion by 2020 and $23.1 billion by 2025.
  • By 2025, the health benefits of the LCFS and C&T will save $8.3 billion in pollution-related health costs such as avoided hospital visits and lost work days. In addition, these policies will prevent 38,000 asthma attacks as well as 600 heart attacks, 880 premature deaths, and almost 75,000 lost work days – all caused by air pollution.
  • By 2025, California’s LCFS and C&T will result in reduced consumption of 21.4 billion gallons of gasoline and 11.8 billion gallons of diesel fuel, meaning over $100 billion in reduced purchases at the pump.
  • By 2025 these policies, which incentivize the adoption of low-carbon fuels, will decrease CO2 equivalent emissions by 165 million metric tons. Emissions that generate smog and soot will decrease by over 179,000 metric tons.

“As a physician, I’m all too familiar with the staggering health and financial costs associated with asthma attacks, visits to the emergency room, and lost work days triggered by unhealthy air. This report is a stark reminder that we must protect California’s landmark clean fuel policies, the Low Carbon Fuel Standard and carbon pricing for transportation fuels. These policies provide tremendous clean air and health benefits and save money for Californians,” said Dr. David Tom Cooke, Member, American Lung Association in California Board of Directors and Head of General Thoracic Surgery, UC Davis Medical Center.

The LCFS and C&T regulations are important steps in cutting pollution from transportation - the state’s leading contributor to pollution. LCFS is aimed at reducing the carbon intensity in transportation fuels as compared to petroleum-based fuels, like gasoline and diesel.

California enacted the world’s first LCFS executive order in 2007 and the law took effect in 2011. Cap and trade began operating in 2013 and will include the transportation sector starting in January 2015.

Although early savings can already be seen, the biggest benefits from the LCFS and C&T begin to accrue in the next five to ten years, once the statewide vehicle fleet achieves a major uptake of low carbon vehicles and fuels. This means that momentum to implement these policies must continue in order to enjoy these major benefits.

This report comes on the heels of the American Lung Association State of the Air 2014 report, which showed once again that California is home to the top five worst polluted cities in the country for ozone and short-term particle pollution, reinforcing the urgent need to address air pollution in the Golden State.

AB 32, and its suite of policies including the LCFS and C&T seek to address the harmful impacts of this sector by placing an economy-wide cap on greenhouse pollution in the state and reducing lifecycle emissions from transportation fuels. These policies enjoy wide support and will especially benefit lung and heart disease patients, low-income communities, children, teens and seniors, who are disproportionately impacted by air pollution and climate change.

“Driving California Forward shows that we can save lives, protect our environment, and improve our economy all at once. Cleaner air and less pollution are basic rights, not privileges in California. It’s critical we preserve the policies that strengthen the health of our communities and provide a better quality of life for future generations to enjoy,” said Dr. Robert Sawyer, Chair, Advocacy Committee, American Lung Association in California.

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American Lung Association. Now in its second century, the ALA is the leading organization working to save lives by improving lung health and preventing lung disease. With your generous support, the ALA is “Fighting For Air” through research, education, and advocacy. For more information about the ALA or to support the work it does, call 1-800-LUNG-USA or visit