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Palo Alto’s Moonshot: Can It Become The First Carbon-Neutral City In US

Originally published on Rocky Mountain Institute.
By Erik G. Fowler, Douglas Miller, and Brett Bridgeland

In 1961, President Kennedy presented the challenge to land an American on the Moon in 10 years or less. This seemingly impossible goal unlocked a national spirit of ingenuity and became a reality just eight years later in 1969 when Neil Armstrong made his famous “giant leap for mankind.”

Big Ideas

Palo Alto (pop. 66,000), the heart of Silicon Valley and birthplace of Google, is eyeing today’s version of reaching the moon—becoming the first carbon-neutral city in the United States. As part of the City’s update to its Sustainability & Climate Action Plan (SCAP), several community-wide greenhouse gas (GHG) emissions reduction scenarios are being analyzed by a project team. One possible scenario is carbon neutrality for the entire Palo Alto community (scope 1 and 2 community-scale emissions). Rocky Mountain Institute (RMI) is acting as an implementation advisor and expert assistant to the City of Palo Alto, helping to develop the SCAP along with the City’s lead consultant and contractor, DNV GL, and working with the City until the plan is released in early 2015 and goes before City Council.

This Bay Area community took a big sustainability leap in 2013 when Palo Alto Utilities (the city-owned municipal utility) provided the city with 100 percent carbon-neutral electricity, a first for a U.S. city. About 40 percent of Palo Alto’s electricity comies from hydropower and 20 percent from other renewables; the City currently offsets the remaining 40 percent of fossil fuel power with renewable energy certificates (RECs). But going further, Palo Alto is now seeking to replace those RECs by 2017 with renewable energy power purchase agreements (PPAs), thus making its electricity supply essentially carbon free. Some might assume that Palo Alto’s now carbon-neutral (and soon to be all-renewable) electricity prices would be prohibitively expensive, or that the community’s well-above-average household income would easily pay for such incremental “green” cost. However, the evidence, at least to date, points to the contrary; residential electricity prices in Palo Alto are 23 percent below the California average.

Big Issues

The City and community have continued to show leadership and commitment by already surpassing California’s AB-32 requirement to reduce GHG emissions to 1990 levels by 2020. Yet, although Palo Alto’s carbon-neutral electricity supply is a noteworthy achievement, greenhouse gas (GHG) emissions from electricity accounted for just 18 percent of total emissions when the City began purchasing RECs. As the graph from the City’s recent Earth Day report shows, significant reductions from Palo Alto’s other sources of GHG emissions will be required not just to reach the California Moonshot goal of carbon-neutrality by 2025, but also for the City to achieve other scenarios such as 80 percent emissions reductions by 2030 or by 2050, both of which are also being contemplated.


Transportation to, from, and within Palo Alto accounted for 59 percent of 2013 GHG emissions and therefore represents the largest piece of the (post-RECs) GHG emissions pie. This will be a challenging number to reduce, especially given that more than 1 in 10 people commute by bike over 50 percent of the time, and that so far electric vehicle adoption has captured just 2 percent of the market in this hometown of Tesla Motors. Natural gas accounts for 29 percent of emissions, with a fairly even split between residential and commercial buildings, another challenging emissions category because solutions will likely require individuals taking uncommon actions such as fuel switching from natural gas appliances to electricity in their homes and businesses. The remaining 12 percent is a combination of wastewater processing and landfilled waste.

Nevertheless, a community with smart, innovation-minded people isn’t likely to accept half-measures in taking on one of the greatest energy and environmental challenges of our time. That’s precisely why the community is thinking about those next steps around ambitious community-wide GHG reductions. Because one or two of these emission domains are stubborn, a paradigm shift coupled with some creative, bold action will be required for the City and community to achieve their goals.

Big Challenge

In order to land an American on the Moon in less than a decade, NASA made two remarkable organizational innovations. First, it held a victory celebration on day one of the Apollo mission—imagining that the mission was accomplished—and then reverse engineered this “impossible” feat from the future to the present to determine what was needed to enable the mission to succeed. Second, it submitted design specifications for what was needed to resolve those technological challenges, which then led to answers to those seeming impossibilities.

With this spirit in mind, and led by the City’s Chief Sustainability Officer Gil Friend (a bit of a sustainability astronaut in his own right), RMI convened an ideation charrette on October 1, 2014 at the Palo Alto Art Center with local leadership and stakeholders to imagine that carbon-neutrality was achieved in 2025. We then all plotted ideas and potential strategies that enabled the “impossible” future to happen. Participants included City and utility personnel, Stanford University faculty, Silicon Valley financiers, sustainability leaders, and myriad other experts and community leaders, all of whom provided a war chest of great implementation strategies to jumpstart their new, updated SCAP.

Emphasis was placed on how to reduce vehicle miles traveled (VMTs) while increasing alternative transportation modes, how to increase electric vehicle adoption, and how to phase out and/or drive deeper natural gas efficiency with resulting implications for the electricity grid. Breakout groups developed implementation plans for the most promising strategies in each of these domains. One group also addressed the water-energy nexus given the region’s drought and ongoing supply concerns. There was even a wildcard section for everything else you can think of, and then some. Proposed solutions fell into two broad categories, with some of the solutions currently being incubated:

  • The targeted, aggressive use of traditional City, utility, and other levers such as incentives, rates, codes, etc., along with innovative community engagement and creative financing methods.
  • Providing a scalable platform for open information and standardized data exchange—especially around multimodal transit—thus enabling coordinated and informed action by independent entrepreneurs, policy makers, and individuals.

RMI’s work continues with the City, DNV, the private sector, and the community of Palo Alto to accelerate implementation of the most promising and cost-effective ideas, especially around transportation. We hope that this exciting collaboration will result in Palo Alto reaching the moon and providing for themselves—and the world—a compelling model of climate success at the City and community level.

Reprinted with permission.

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Written By

Since 1982, RMI (previously Rocky Mountain Institute) has advanced market-based solutions that transform global energy use to create a clean, prosperous and secure future. An independent, nonprofit think-and-do tank, RMI engages with businesses, communities and institutions to accelerate and scale replicable solutions that drive the cost-effective shift from fossil fuels to efficiency and renewables. Please visit for more information.


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