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.
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.
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.
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
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.’