Washington Moves to Reduce Carbon: A First Step but More Work Remains

, Western states senior climate analyst | October 12, 2016, 4:03 pm EST
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Eastern Washington was ablaze with wildfires this August as Governor Inslee declared a state of emergency for twenty counties. And the 2015 fire season was the state’s worst on record. Many factors can increase wildfire risk, and the state of Washington and external experts acknowledge that hotter, drier conditions due to climate change is one of them. It’s against this burnt landscape that the Department of Ecology (or Ecology) released its final Clean Air Rule last month to cap and reduce Washington’s carbon pollution.

Chiwaukum Fire, 2014 Tag: Confronting Climate Change in Washington (2015) Tag: Climate

Deep reductions in heat-trapping emissions in Washington and globally are necessary to reduce the risks of climate change, like wildfires. Photo Credit: Washington State Department of Natural Resources

With this rule, the Evergreen State has shown that states do not need to wait for Washington, DC to take action on climate. It is a first step, but much works remains to ensure the rule is effective. Looking ahead, Washington must take further action to contribute to the deep reductions necessary globally to limit the risks of climate change – like wildfires – and protect the public’s health. Here we offer some additional thoughts and questions for Ecology’s consideration as they move to implementation and beyond.

A brief overview of the Clean Air Rule

Since the Clean Air Rule is the first-of-its-kind in the United States, it’s helpful to start with a brief overview of the rule. It regulates heat-trapping emissions from the largest emitting natural gas distributors, petroleum fuel producers and importers, and stationary sources, like power plants and pulp and paper mills, in Washington. Collectively, they account for two-thirds of the state’s emissions. Ecology estimates total cumulative reductions of more than 16 million metric tons of greenhouse gases through 2035

             Individual emission limits

Each facility gets its own emission reduction pathway that begins with its average baseline emissions in 2012-2016 and decreases by an average of 1.7 percent each year. Every three years, it must demonstrate that it met its reduction goals or face penalties. At the outset, the rule covers 24 facilities, and gradually expands to cover 60 to 70 facilities by 2035. “Energy-intensive trade-exposed” industries, like aluminum smelters or pulp mills, start compliance later and can use an alternative emissions reduction formula. Because these industries are highly competitive globally and use a lot of energy, this option is intended to help reduce the likelihood that they’ll move their operations or emissions out-of-state due to the rule.

             Meeting the targets

Facilities have flexibility to find the most cost-effective reductions to meet their individual caps. Ideally, a facility would achieve the majority of its reductions on-site, but the rule provides three other ways to comply as well. They can purchase emissions credits from other facilities with emissions below their caps or from voluntary participants; buy allowances from other multi-sector carbon markets in North America, like California; or procure credits from/invest in an approved set of projects or programs in Washington from the energy, transportation, industrial, livestock and waste and wastewater sectors (or ‘offsets’).

Since facilities can use an unlimited number of offsets for compliance, they may have less of an incentive to reduce emissions on-site. There’s also a risk that these reductions are inadvertently counted twice or ‘double-counted’ since offsets can come from sectors covered by the rule.

            Emissions reserve

The rule does not set an explicit overall limit or clear line that total emissions cannot exceed. But it does take an important step towards an implicit limit by establishing an emissions reserve to accommodate business growth in Washington without increasing overall emissions. It serves a few other key purposes too, such as minimizing ‘double-counting’ and supporting environmental justice-related projects.

            Unique approach

The Clean Air Rule’s overall approach is called a “baseline and credit system.” It differs from other cap-and-trade programs in the United States, like California’s program and the Regional Greenhouse Gas Initiative, in important ways. The latter use a more established approach that sets an explicit declining economy-wide or sector-wide emissions cap. The cap is then divvied up into emissions allowances that are either allocated or auctioned. Facilities must hold allowances equal in number to their total emissions. They also differ in their approach to offsets since they place a limit on the number that can be used for compliance and do not allow credits from covered sectors. These and other differences could hinder the Clean Air Rule’s ability to link with other cap-and-trade systems.

Looking Towards Implementation and Beyond: Some Questions to Consider

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Several questions remain for Ecology’s consideration as the rule moves to implementation. Photo Credit: Virtual EyeSee/Flickr

UCS worked closely with our allies in Washington to advocate for a strong rule with significant emission reductions. We appreciate Ecology’s efforts to address the concerns that we and other stakeholders raised during the rule’s development. And we have identified several questions for Ecology’s consideration during implementation and subsequent updates to help ensure that the Clean Air Rule is robust and realizes substantial reductions.

  • How can the rule better incentivize on-site reductions? Because facilities can rely solely on off-site credits like unlimited offsets to meet their emission reduction goals, many could have little incentive to reduce emissions on-site. Facilities should be encouraged to address their carbon intensive practices and rely less on alternative credits. These types of transformational changes are key for Washington’s transition to a low carbon economy and other important local benefits.
  • Do the credits from offsets and voluntary participants represent real additional reductions? Emission reductions from approved projects or programs must meet several criteria, including decreasing emissions beyond what’s required by rule or law. However, best practice for determining whether the reductions are beyond business-as-usual goes further to require reductions that would not occur absent the rule. Similarly, it’s unclear whether the credits from voluntary participants would represent reductions beyond business-as-usual practices or increase overall emissions.
  • Will the emissions reserve, as currently structured, be adequate to meet its important goals? The reserve gets its credits from the emission reductions generated when facilities intentionally shut down or reduce production, and a small fraction of the reductions achieved by covered facilities. Given potential demand, it is possible that there may not be enough emissions credits to continually cover all of the reserve’s multiple uses. If this happens, its ability to help preserve an implicit aggregate limit or address double-counting – critical features of the rule – would be compromised.
  • How will implementation ensure equitable reductions for all Washingtonians? The rule establishes an Environmental Justice Advisory Committee to award reserve credits to specific projects. It could also serve as a powerful conduit for the perspectives of low-income communities and communities of color during implementation. Air and water quality should also be protected from backsliding, especially in pollution hotspots that are often in frontline communities.

Keeping the ‘Evergreen’ in Washington

Recent studies project that the average acreage burned each year in the Evergreen State could double by 2040 with rising temperatures and drier conditions. That’s why we need to act now and take steps to limit these risks. UCS supports strong climate policies in Washington that reflect the magnitude of the climate challenge facing the state and help shape its transition to a clean energy economy. While the Clean Air Rule is a first step, it alone is not sufficient. Washington can and must play a leadership role through further actions to limit its carbon emissions. Otherwise, the state risks continuing to ‘play with fire.’

Posted in: Global Warming

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  • John G

    The thing I don’t understand about the promotion of any type of pollution credit schemes like cap and trade or this Washington one is: who ends up paying the costs in the final analysis. It seems to me that no matter how complicated such schemes are, the net result must be higher costs to producers, which will simply be passed on to consumers.

    And the additional costs of setting up such a market, enforcement of the rules, monitoring of emitters, and prosecution of fraud and cheaters should also be included. In short, the net effects on consumer purchasing power should be clearly spelled out. It seems to me that the overhead costs in any such scheme will inevitably be high, the possibility of fraud and abuse of the rules (resulting in the original intent to be thwarted) is high, and the overall effectiveness would therefore be low in relation to the total costs.

    In addition to that, the complicated details of this type of solution seem to make various assumptions which will translates into room for error.

    Citizens’ Climate Lobby’s revenue neutral carbon tax, known as Carbon Fee and Dividend, seems to me to be a better solution because it is very efficient and it protects consumer purchasing power. All aspects of it are simple, efficient, and fair. By fixing the broken energy market it allows free market forces to prefer clean energy solutions. And it does so in a way that protects our purchasing power. Amazing.

    Carbon Fee and Dividend would put a steadily increasing fee (tax) on fossil fuels based on their greenhouse gas emissions. The fee would start at $15/ton of CO2 emitted, and steadily increase by $10/ton each year. All of the money collected would be returned as a dividend to all American households on an equal basis (minus administration costs) each month. The magic of the solution is this dividend, because it results in two thirds of all households breaking even or receiving more in their monthly dividend checks than they pay in higher prices due to the fee. The dividend prevents the rising fossil fuel prices from affecting people’s net purchasing power, so it protects household budgets and the economy.

    In fact the dividend gives the economy a boost, because the poor will spend the positive net difference they get between their dividend and the higher prices on life’s basic necessities, thus they will pump more money into the economy. A REMI study found that the Carbon Fee and Dividend solution would not only reduce greenhouse gas emissions down to 10% of 1990 levels by 2050, but it would create two million new jobs in the first ten years after Carbon Fee and Dividend was enacted.

    http://citizensclimatelobby.org/remi-report/

    Carbon Fee and DIvidend also includes a border adjustment, to protect US jobs and US companies by normalizing export and import prices (using tariffs) to account for the higher fossil fuel prices in the US in trade with other countries that do not have a similar price on fossil fuels. That will strongly encourage other countries to put a similar price on carbon based fuels, resulting in the US lead the world on the shift to clean energy.

    What other solution does all those things: raises the price of fossil fuels to make clean energy choices the logic ones for consumers, protects our individual purchasing power as prices go up for a few decades during the transition, and enables the US to lead the world in a rapid conversion around the globe?

    Anyone concerned about AGW should check out the Carbon Fee and Dividend proposal. This solution is being promoted by the non-partisan, non-profit group CCL, which is mostly composed of volunteers. (Like me – I joined shortly after learning about it this year). To get it to happen, enough people need to learn about it, express their wish to their congressmen that Congress look into it, and talk about it with others. This is a grass-roots solution and we are the ones who will benefit most from it, so we need to be engaged in the process to make it happen.

    Check it out here:
    http://citizensclimatelobby.org/basics-carbon-fee-dividend/

    It is a win for the climate, a win for households, and a win for the economy. The only group who loses in the proposition are those with investments in fossil fuel infrastructure and reserves. But those investments must soon become dead-ends in any solution that addresses greenhouse gas emissions to the degree necessary to prevent catestrophic climate and oceanic effects.

    • John, you raise the good point that the design of any carbon pricing program is critical to its effectiveness. Both cap-and-trade and carbon tax programs can be effective tools to reduce carbon pollution – if designed well. And they are most effective when they work in concert with other sector-specific or complementary policies. UCS supports a price on carbon as a key element of a suite of policies to address climate change.

      Depending on how they are designed, the use of revenues in both types of programs could help address impacts on consumers. For instance, in California, eligible households and businesses receive a Climate Credit on their electricity bills that’s funded by a portion of the cap-and-trade revenues. As you mentioned, Citizens Climate Lobby (CCL) recommends returning all the revenues to consumers as a dividend. UCS believes there are a variety of ways to use the revenues to advance societal goals, many of which are described on our Carbon Pricing 101 webpage. We respect the work that CCL is doing, and you can see more about UCS’ position on carbon pricing here.

    • Jamesine Rogers Gibson

      John,

      I apologize for the delayed response due to a technical glitch on our website. You raise the good point that the design of any carbon pricing program is critical to its effectiveness. Both cap-and-trade and carbon tax programs can be effective tools to reduce carbon pollution – if designed well. And they are most effective when they work in concert with other sector-specific or complementary policies. UCS supports a price on carbon as a key element of a suite of policies to address climate change.

      Depending on how they are designed, the use of revenues in both types of programs could help address impacts on consumers. For instance, in California, eligible households and businesses receive a Climate Credit on their electricity bills that’s funded by a portion of the cap-and-trade revenues. As you mentioned, Citizens Climate Lobby (CCL) recommends returning all the revenues to consumers as a dividend. UCS believes there are a variety of ways to use the revenues to advance societal goals, many of which are described on our Carbon Pricing 101 webpage. It’s also important that carbon pricing programs carefully consider their fiscal impacts on revenues and budgets. We respect the work that CCL is doing, and you can see more about UCS’ position on carbon pricing on our webpage.

  • ben

    Looks like UCS is only endorsing WA carbon reduction policies that they were involved in. This article says we need to do more, and I agree. Why then in a previous blog post by Jason Barbose did UCS decline to support North America’s most powerful climate policy: I-732 a.k.a the nations first carbon tax (currently on the WA state ballot!)? http://www.yeson732.org

    Jason Barbosa from UCS says the reason UCS can’t support I-732 carbon tax initiative is “it would be inappropriate to parachute in and tell Washington-based groups how to design carbon policy”. But you have no problem weighing in on Governors Inslee’s Clean Air Rule? Maybe its because “UCS worked closely with our allies in Washington to advocate for a strong rule with significant emission reductions”. That is not a science based solution, it will be held up in court for years and doesn’t go nearly far enough to hit our goals (thats why the department of ecology was sued by a bunch of kids).

    UCS describes themselves as “stakeholders”. Instead they should look to the hundreds of young students who’ve volunteered for I-732 carbon tax (many of whom are not old enough to vote) because THEY are the actual moral stakeholders of this issue.

    Here is an open letter signed by over 50 climate scientists in Washington State advocating for I-732! http://cliffmass.blogspot.com/2016/10/open-letter-from-leading-climate.html

    I recommend that UCS listen to the Washington State scientific community.

    • Polymerase

      Indeed. It is incredible that Ms. Gibson could write an article about climate policy in Washington State right now without mentioning I-732 when, according to the polls, about 1.5 million Washingtonians intend to vote for it. Moreover, it is sadly ironic that a Union of “Concerned Scientists” would let pass without comment a very public collective statement made 4 days ago in support of I-732 by more than 50 actual, working climate scientists. The excuses recently given on this blog by Jason Barbosa, UCS Western States Policy Manager, for taking “No Position” on I-732 basically amounted to: “We can see that I-732 is controversial among liberals in Washington, and we don’t want to offend anybody.” Perhaps we should refer to this organization as the “Union of Self-Concerned Scientists”.

    • Thank you for your comment, Ben. We acknowledge that there are areas for improvement in the Clean Air Rule, several of which I’ve described in my blog. We advocated for stronger targets in the rule, and agree that more action is needed to achieve the deep carbon reductions necessary in Washington. I respect that you do not agree with UCS’ decision to not engage on 732. My hope is that we can find a way to work together constructively towards our common goal moving forward, a low carbon, clean energy economy in Washington.

    • Jamesine Rogers Gibson

      Thank you for your comment, Ben. I apologize for the delayed response due to a technical glitch on our website. We acknowledge that there are areas for improvement in the Clean Air Rule, several of which I’ve described in my blog. We advocated for stronger targets in the rule, and agree that more action is needed to achieve the deep carbon reductions necessary in Washington. I respect that you do not agree with UCS’ decision to not engage on 732. While we have not taken a position on the specific policy in the Washington ballot measure, we’ve been encouraging all Washingtonians to evaluate the measure carefully and vote their preferences. My hope is that we can find a way to work together constructively towards our common goal moving forward, a low carbon, clean energy economy in Washington. UCS will remain a faithful partner in making significant, swift, and equitable progress on climate change, within Washington, other states, and nationally.