1 big thing: California's transportation challenge

California is on the cusp of enacting a law to have 100% carbon-free electricity by 2045. But amid the hoopla, a new report underscores an arguably tougher challenge: Wringing CO2 out of transportation. Why it matters: Transportation emissions have been rising in recent years — even as the state's overall CO2 output has dropped over the last decade — and ticked up another roughly 2% from 2015–2016. Cars, trucks and other vehicles now account for just over 40% of greenhouse gases in the state that's the world's fifth-largest economy, the report from Beacon Economics and the group Next 10 says. Where it stands: Modest gasoline prices, a shift in consumer preferences toward pickups and SUVs, and declining transit usage all contribute. But, so does something less obvious — California's housing crunch. "While fuel economy standards have done much to reduce emissions, there are more cars on the road today and, in the last few years, those cars have been driving farther distances as housing costs push people farther from job centers," the report states. The intrigue: Bloomberg's Eric Roston notes that the report "could become part of an expected confrontation between the state and White House." That's because the Trump administration recently floated draft auto mileage and emissions rules that would freeze Obama-era increases in 2020 rather than allow them to keep tightening. And, crucially for California, the plan would revoke the state's power to impose tougher mandates. The big picture: The report — called the California Green Innovation Index — is a detailed look at California's climate and energy picture in light of policies that go back over a decade. The state reached a key goal — cutting emissions to 1990 levels by 2020 — 4 years ahead of schedule, it notes. "Between 2006 and 2016, California had greater emissions reductions (-11.1%) than the U.S. as a whole (-10.2%) while also achieving greater economic output (15.9% growth compared to 11.6%)," the report finds.