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The 9th Circuit's Ruling on Gas Bans Stinks. Here's How We Decarbonize Buildings Anyway.

6 pathways for state and local governments to advance building decarbonization policies in 2024

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State Climate Action

Thursday, February 29, 2024

Graphic of the 9th Circuit headquarters building on a gas stove burner.

At a Glance

States and local governments are leading the effort to decarbonize buildings, eliminate harmful indoor pollution, and build healthier communities.
But a recent decision in the 9th Circuit Court of Appeals raises some uncertainty around what options remain available for local policymaking.
Despite this ruling, states can still utilize these six tools to advance building electrification, and they need the Biden administration to help them move fast:
1. Control appliance emissions and use Clean Air Act authorities
2. Implement Building Performance Standards (BPS)
3. Set indoor air quality standards
4. Use appliance labeling to increase customer awareness of the harms of appliances
5. Use utility commission authority to drive building electrification
6. Deploy Inflation Reduction Act (IRA) funds to move electrification forward

2023 was the year the gas stove debate was put on the front burner. Whether it was due to the Department of Energy’s (DOE) household energy efficiency reforms or the embarrassing, over-the-top response from Republicans literally clinging to their gas stoves as part of yet another fake “culture war” fixation, gas-related news has been at the center of the climate and political zeitgeist.

But lost amid much of this (often absurd) back-and-forth political jockeying was a recent piece of truly important, highly relevant gas-related news that has tremendous implications for climate and public health. A big California gas utility moved to block climate progress by funding a lawsuit against Berkeley, California’s first-in-the-nation building code banning natural gas in new buildings. And because that suit went to Trump judges on the 9th Circuit Court of Appeals, the utility won—and just months ago the Court decided not to correct that flawed opinion.

You can bet that crooked utilities and the fossil industry will try to use this opinion to choke off action and attack local governments across the country trying to go fossil-free. But we won’t let them succeed because there’s so much we can still do. States and local governments can still advance much-needed building decarbonization policies, and the federal government needs to jump in to help, right now.

First, here’s what you need to know about the 9th Circuit decision, the subsequent appeals process, and why it’s central to eliminating climate pollution from our buildings.

Map showing that Alaska, Washington, Oregon, Montana, Idaho, Nevada, California, Arizona, Hawaii, Northern Mariana Islands, and Guam are under the 9th Circuit's jurisdiction. The 9th Circuit is headquartered in San Francisco, California. — States and local governments under the 9th Circuit’s jurisdiction can still advance building decarbonization policies despite the court’s ruling.

What Was the 9th Circuit’s Decision on Berkeley’s Gas Ban and Why Does It Matter?

In 2019, the city of Berkeley unanimously passed a landmark ordinance banning gas infrastructure in new buildings. A string of cities and counties followed suit, drafting and passing laws to limit climate and air pollution, including over 70 cities in California alone and many others across the 9th Circuit and beyond.

Buildings represent the nation’s largest consumer of energy, fourth-largest source of direct carbon pollution, and second-largest source of air pollution. Berkeley’s trendsetting move to ban builders from applying for entitlements including gas infrastructure (like gas piping to heat water, space, and food) was an important step forward to address this type of dangerous, planet-warming pollution and promote all-electric new construction, which is more resilient to power outages and cleaner than gas.

But later that year, the California Restaurant Association (CRA) sued the city over the ban, kickstarting multi-year litigation—backed and paid for by none other than the well-funded, well-organized gas industry.

Pie chart showing greenhouse gas emissions by sector. From most to least: Transportation, Electric Power, Industry, Commercial & Residential, and Agriculture. — Buildings represent the nation’s fourth-largest source of direct carbon pollution.

The Fight for Building Electrification Reveals a Familiar Villain: SoCalGas

On the surface, the Berkeley gas ban debate centered on restaurant claims that some foods, like charred vegetables, barbequed meats, and stir fry cooked on a wok, were impossible to prepare without an open flame. But dig deeper, and you’ll see this dispute was also about protecting the country’s largest gas company—SoCalGas’—profits.

Does that name sound familiar? It should.

Monopoly utility SoCalGas and its trade association, the American Gas Association (AGA), have a long and ongoing history of funding lobbying and public relations campaigns to block and slow down electrification efforts. Their interference in climate and public health policy mirrors the playbook of electric utility companies and their dangerous and influential lobbying group Edison Electric Institute (EEI)—something we’ve documented extensively.

The 9th Circuit case was no different. SoCalGas saw the gas ban as a threat to its bottom line, so it manufactured outrage, misinformation, and a false narrative. It funded studies attempting to debunk published, peer-reviewed studies on the harmful effects of gas appliances on indoor air pollution and covered legal fees for CRA’s litigation.

And their backdoor efforts paid off—for the gas industry, not its customers. SoCalGas not only bankrolled the case but billed their unwitting, beholden customers $1.1 million in legal fees used by CRA to sue the city of Berkeley—all of which is illegal under federal and California law.

9th Circuit Decision Limits State and Local Regulation on Energy Efficiency Standards

Beyond public antics and utility malpractice, the core of the CRA’s legal argument was the claim that it was “preempted” (or precluded) by the decades-old Energy Policy and Conservation Act (EPCA), which gives the federal government the sole ability to set energy-efficiency standards for appliances. This argument focuses on a crucial distinction: The EPCA preemption issue only covers appliance energy efficiency and use—not pollution standards. We will come back to this point later.

In 2023, the three-judge panel of the 9th Circuit, notably made up of a Reagan appointee and two Trump appointees, aligned with the EPCA preemption argument at least for building codes like the Berkeley one—dealing a blow to climate and public health activists. This decision applies to the 9th Circuit region, covering 11 Western states, including California, Washington, and Oregon, but has also raised doubts elsewhere on what decarbonization policies might be viable in the eyes of the court.

Berkeley requested a rehearing, and in January 2024, the court narrowly denied this request. However, the panel did amend the opinion in a few small but notable ways:

Limitations on the scope: The new opinion removed its broad statement implying EPCA preempts “any building codes that regulate gas use,” which implies a potential ban of all regulation of any type of energy. They reduced the opinion's impact on state and local regulation of gas distribution and specifically focused on preempting local building codes that barred new distribution pipelines. Together, this clarified that state and local governments have many more options to protect their residents’ health and safety and promote clean energy.
A group of judges, led by the Chief Judge, filed a dissenting opinion: In the dissent, the judges laid out why the court’s opinion was mistaken, which should help limit the use of the 9th Circuit decision as rationale to block similar building decarbonization efforts across the country.

Composite photo of former President Donald Trump and 9th Circuit Judge Patrick Bumatay. — 9th Circuit Judge Patrick Bumatay (right corner) was one of two Trump-appointed judges on the Berkeley gas ban case.

So, Where to from Here?

Several cities have followed in Berkeley’s footsteps, and many more want to. But given this legal saga, there’s some uncertainty around what options remain open for state and local governments to push building decarbonization policies. Fortunately, there are still many lawful avenues for advocates to pursue.

First, it’s important to remember that the court’s decision only applies to some building codes for newly constructed buildings in the 9th Circuit. And while the 9th Circuit covers a large and influential portion of the U.S., many local governments, including those in California, are choosing to fight back. Though some cities in California have retracted their gas bans to avoid potential legal risks, other major cities like Los Angeles and San Francisco have thus far kept their bans in place. Ultimately, it’s up to individual local governments, their budget, and their appetite for legal risk on whether or not they feel comfortable pushing forward a Berkeley-style gas ban.

6 Ways States and Local Governments Can Take Action to Cut Climate Pollution from Buildings

Beyond the limitations set by the 9th Circuit, states and local governments within their jurisdiction can still pursue these six options to electrify buildings:

1. Emission-based appliance standards through State Implementation Plans (SIPs)

Remember the EPCA preemption concern raised in the 9th Circuit case? Well, that only applies to regulating energy efficiency and use. But emission standards are notably not building codes subject to EPCA, and the Clean Air Act (CAA) and local air codes have supported appliance pollution standards for years. It’s time to deploy that approach, and lots of legal room remains. By replacing fossil fuel appliances with zero-emission electric alternatives, state regulators can dramatically cut building pollution, improve public health, and increase resilience to extreme weather. In fact, this is the pathway that New York City took to building electrification by prohibiting newly constructed buildings from combusting any substance that exceeds a threshold of carbon pollution.

Second, and crucially, emission standards are required by the CAA to be “harmonized” with EPCA, rather than preempted by it. In this way, states not only have the option to regulate air pollution by setting strong emission-based standards, they are actually obligated to. The CAA requires states to come up with “State Implementation Plans” (SIPs) to comply with federal air pollution limits. The Environmental Protection Agency (EPA) reviews individual SIPs and then chooses to approve or disapprove them. Once they are approved, they effectively become—and have the force of—federal law.

Federal EPA, including its regional offices that administer SIPs, needs to step up and start approving zero-emission standards into SIPs. And it can start with a zero-emission standard in the Bay Area, which will show industry that the path to zero, including in the 9th Circuit, remains open.

2. Building performance standards (BPS)

Building performance standards are a relatively new policy tool to address pollution in existing buildings. In major cities like New York City and Washington, D.C. older buildings can cover up to 70 percent of the area’s carbon pollution. While not all residential buildings are covered by a BPS, those that are are required to reach specific energy performance targets, and set a predefined time frame to reduce or eliminate carbon pollution.

3. Indoor air quality standards

Despite overwhelming evidence of the negative effects of fossil fuel appliances on environmental and public health, indoor air quality is essentially unregulated at the federal level. While the emission-based appliance standards discussed above primarily concern outdoor air pollution, there are also opportunities for states to advance building decarbonization policies by establishing indoor air quality standards. An indoor air quality standard could be a powerful tool for addressing the health impacts of fossil fuel combustion from appliances in existing buildings by setting limits on indoor air pollution and specifying pathways for compliance with those limits. This standard-setting process could mimic existing ones at the federal level, like the process EPA adheres to for its outdoor air quality standards.

4. Appliance labeling to increase customer awareness of the harms of appliances

In early February, a new bill (AB-2513) was introduced in the California State Assembly, which would prohibit the sale of gas stoves, unless the stove is labeled with a statement outlining the health risks and air pollutant emissions (for nitrogen oxides and carbon monoxide) associated with gas stove use, beginning in January 2025. This action was taken in response to a growing body of research that highlighted the negative health impacts of gas stove use. Unlike the previous options, this policy targets consumer awareness as a key lever to advance building decarbonization, as the health risks of gas stove use become more widely accepted.

5. Utility Policy to Electrify Buildings

There’s also much to do to align utility behavior and rates with the path forward. Not only can states bar corrupt utility lobbying practices with our ratepayer money, but they can also move forward with the full suite of tools states and utility commissions have long used to design the power grid and gas transmission system. Ultimately, states clearly have the power to decide whether gas pipelines get extended, how to drive job growth by building out power grids instead, and how to fund the removal of old, costly, and dirty gas infrastructure. It should be full speed ahead to design the system for zero emissions and bring the utilities in line.

6. Deploy IRA Funds to Move Progress Forward and Bring Companies on Board

Appliance manufacturers have already committed to partner with states to move electrification forward, and the Inflation Reduction Act offers states and local governments millions in funding to electrify buildings in an equity-forward way. This is the right time for state and federal funders to move those funds as ambitiously as possible and to seek clear commitments from manufacturers, builders, landlords, and local governments to electrify buildings regardless of Trump-judge-created legal churn. It’s time to make progress on the ground.

The fact of the matter is that despite this latest ruling, building cleaner, safer homes, schools, and workplaces is still possible. And it’s on local and state governments to seize the opportunity and get it done. For a deeper dive into building decarbonization and opportunities to slash indoor air pollution by using existing regulatory authorities, new funding opportunities, and cross-cutting program guidance, check out our latest buildings policy memo.