Washington Gov. Announces Carbon Cap-and-Trade Plan and New Clean Fuel Standards

Back in 2008, lawmakers in Washington state approved legislation that mandated that carbon emissions be reduced to 1990 levels by the end of this decade and cut even more by 2035 and 2050.

On Wednesday at REI’s flagship store in Seattle, Gov. Jay Inslee unveiled a new proposal aiming to meet those goals. The Carbon Pollution Accountability Act, as proposed by the governor, would create a cap-and-trade system in the state that would raise $1 billion in funding in its first year that would be steered to transportation, education and other priorities.

Inslee’s proposal also calls for cleaner state fuel standards and $60 million in funding for renewable energy and energy efficiency research.

“I believe it’s our destiny to lead in clean energy. Washington may be less than one-tenth of 1 percent of the world’s population, but we’re number one in the world in software, in aerospace, in apples, in online retailing,” Inslee said in a statement. “We can choose cleaner air, more efficient cars and a better transportation system. We can choose energy independence. We have a choice in our future, and we’re choosing to take action.”

The cap-and-trade system limits the amount of carbon that can be emitted into the air forcing polluters to pay for their emissions and allow those polluters to trade pollution allowances. The carbon limit would decrease over time, forcing polluters to adapt to cleaner technologies and more efficient operations.

The system would impact only a small handful of businesses. But those polluters generate 85 percent of Washington state’s carbon emissions, according to the governor’s office.

As Bloomberg News reported, if the governor’s plan is approved, Washington state’s cap-and-trade system could link up with similar systems in California and Quebec, where companies could trade pollution allowances across jurisdictions.

But as designed, Washington state’s system “would move more aggressively than similar programs in other states,” according to The Seattle Times. Under the program, which would be administered by the state’s Department of Ecology, the pollution allowances would be auctioned off four times annually.

But the Democratic governor’s plan faces a tough road in Olympia. Republicans control the state Senate and Democrats only have a marginal majority in the state House.

State Sen. Doug Ericksen, who chairs his chamber’s Energy, Environment and Telecommunications Committee, told The Seattle Times that the governor’s cap-and-trade plan as “an energy tax, which is really a tax on mobility — which is a tax on freedom.”

From the governor’s press release:

SEATTLE – Gov. Jay Inslee today announced a set of proposals to transition Washington to cleaner sources of energy and meet carbon pollution limits adopted by the state Legislature in 2008. The proposals build on a comprehensive executive order issued by the governor in April.

Inslee was joined for his announcement at REI’s flagship store in Seattle by Mayor Ed Murray and other elected officials, representatives of labor, business, communities of color and others committed to action on carbon pollution.

“We’re here today to announce a plan to take action on climate. It’s the smart thing to do because we can make the air cleaner for our children, our businesses can lead the world in clean technology and doing so will bring good-paying jobs to Washington,” Inslee said. “And with so many of us committed to working together on this, I believe we can make real progress toward that future.”

More accountability for major polluters

Current policies allow major polluters to emit unlimited amounts of carbon into the air at no cost. Inslee’s proposed Carbon Pollution Accountability Act would create a new, market-based program that limits carbon pollution and requires major polluters to pay for their emissions.

The limit will decrease gradually over time, allowing emitters time to transition to cleaner technology and improved operations. The program will generate about $1 billion in the first year, and more thereafter, which will be used for transportation, education, tax relief for working families and other purposes.

The CPAA will affect the relatively small number of businesses that generate 85 percent of Washington’s carbon emissions. The governor’s proposal was informed by recommendations from his Carbon Emissions Reduction Taskforce, which included representatives from business, labor, health care, utilities, at-risk communities, governments and others.

Cleaner transportation options for consumers

Nearly half the state’s carbon pollution comes from cars, trucks and other transportation sources. Providing consumers more affordable, convenient and cleaner options will help put a big dent in Washington’s top source of emissions.

Inslee will request legislation to extend incentives for electric vehicles and create an electric vehicle infrastructure bank to spur installation of high-speed charging stations. The state Department of Ecology will request legislation to allow Washington to adopt a zero emission vehicle program that incentivizes the sale of ZEVs, including plug-in electric and hydrogen fuel cell vehicles.

Cleaner fuel options are another way to reduce carbon emissions from cars. An economic analysis performed for the Office of Financial Management shows a clean fuel standard could be designed in a way that has no significant economic effects.

Inslee has also asked the Department of Ecology to draft a clean fuel standard rule and to solicit review and comments from legislators, stakeholders and the public.

However, the governor said before initiating formal rule making, “I want to allow time for feedback from the legislative and public review phases. I also want to see what proposals and progress are made as the legislative session unfolds,” he said.

If a decision to pursue a rule is made at a later date, the process would require development of a formal proposed rule and an extensive public review process.

Stronger growth in the clean energy industry

Inslee is requesting $60 million for the state’s successful Clean Energy Fund to help research institutions, utilities and businesses develop and deploy new renewable energy and energy efficiency technologies. During the 2013–15 biennium, the $40 million Clean Energy Fund leveraged $200 million in matching funds from private industry partners.

The governor has also proposed funding for other technology development efforts, including a new research building at the Center for Advanced Materials and Clean Energy Technologies and additional test beds at the Clean Energy Institute, both at the University of Washington.

To promote the use of solar energy in the state, the Washington State University Energy Office is drafting legislation to expand the state’s successful incentive program to allow more parties to join while more effectively targeting incentives.

Lower energy costs through greater energy efficiency

The governor is proposing several initiatives that will allow businesses, government, farmers and homeowners to lower their energy costs by increasing their energy efficiency.

Inslee is also proposing several capital budget investments, including weatherization projects that will cut energy costs for thousands of low-income homeowners and energy efficiency projects on public buildings that will capture savings for state taxpayers.

Inslee said he’s looking forward to working with the Legislature on these proposals, and that failure to act is not an option.

“I believe it’s our destiny to lead in clean energy. Washington may be less than one-tenth of 1 percent of the world’s population, but we’re number one in the world in software, in aerospace, in apples, in online retailing,” Inslee said. “We can choose cleaner air, more efficient cars and a better transportation system. We can choose energy independence. We have a choice in our future, and we’re choosing to take action.”

(Image by mattgeo / Shutterstock.com)