Equitable low-carbon transition pathways for California’s oil extraction

Oil supply-side policies—setbacks, excise taxes and carbon taxes—are increasingly considered for decarbonizing the transportation sector. Understanding not only how such policies reduce oil extraction and greenhouse gas (GHG) emissions but also which communities receive the resulting health benefits and labour-market impacts is crucial for designing effective and equitable decarbonization pathways. Here we combine an empirical field-level oil-production model, an air pollution model and an employment model to characterize spatially explicit 2020–2045 decarbonization scenarios from various policies applied to California, a major oil producer with ambitious decarbonization goals. We find setbacks generate the largest avoided mortality benefits from reduced air pollution and the largest lost worker compensation, followed by excise and carbon taxes. Setbacks also yield the highest share of health benefits and the lowest share of lost worker compensation borne by disadvantaged communities. However, currently proposed setbacks may fail to meet California’s GHG targets, requiring either longer setbacks or additional supply-side policies. Understanding how oil supply-side policies affect extraction, emissions and communities is important for the design of decarbonization pathways. Here the authors take a modelling approach to characterizing 2020–2045 decarbonization scenarios from various policies applied to California’s oil extraction.