Wash. proposes cap and trade for large facilities

Source: Amanda Reilly, E&E reporter • Posted: Friday, January 8, 2016

The state of Washington yesterday proposed its first-ever limits on carbon dioxide emissions from large facilities.

The plan calls for capping CO2 from emitters of 100,000 or more metric tons of the heat-trapping gas and requiring a 5 percent reduction every three years.

Entities would be allowed to trade pollution allowances to meet the limits, both within the state and through other carbon markets, including California and the Regional Greenhouse Gas Initiative in the Northeast.

“We’re trying to offer a wide range of opportunities for folks in the program to get those emissions reductions,” said Bill Drumheller, climate and energy specialist at the Washington Department of Ecology.

Gov. Jay Inslee (D) instructed the department to devise the plan to meet the targets set out by a 2008 state law that called for carbon reductions. By 2020, the law calls for the state to reduce overall greenhouse gas emissions to 1990 levels.

The proposal introduced yesterday is a step toward achieving the reductions called for by the Legislature but won’t fully achieve the limits because it does not cover all state emissions, said Sarah Rees, the department’s special assistant on climate change policy.

“This is only one piece of the puzzle,” Rees said. “We need to put multiple strategies in place. The science is telling us that what was projected years ago is happening today, and we need to act now to protect our environment and economy for future generations.”

The proposal, which the department aims to finalize this summer, would cover a variety of industries within the state, including natural gas distribution, petroleum fuel production, power plants and waste facilities. Those entities are already required to report yearly greenhouse gas emissions to the state and represent about 60 percent of Washington’s greenhouse gas emissions.

Entities would be able to meet the requirements by reducing emissions; obtaining emissions credits from other entities within the state; obtaining credits from other carbon markets in North America; and funding projects, such as the conversion of cow waste to energy at farms, to help reduce emissions within the state.

“If an organization overcomplies, they can bank those emissions reductions to use in future years or sell them to others,” Drumheller said. “So there’s an incentive to do more than what is required.”

The 100,000-metric-ton threshold for compliance would decline over the years.

Rees said state officials shaped the proposal with input from stakeholders and altered their plan in response to concerns.

The state initially was not going to impose carbon limits on fuels that are imported into the state because of data issues, but Rees said that officials heard from stakeholders that the plan would put Washington fuels at a disadvantage. The plan now covers imported fuel but proposes to delay compliance for three years to sort out those data issues.

It also proposes to delay compliance by three years for energy-intensive, trade-exposed industries such as the pulp and paper sector, cement facilities and chemical facilities.

Rees said that the program would not cost the state additional money to administer because it would draw from the state’s existing greenhouse gas reporting program.

The carbon proposal is separate from the state’s work developing an implementation plan for the Clean Power Plan, U.S. EPA’s program for reducing carbon dioxide emissions from existing power plants. But Rees said the same officials are working on both efforts to reduce emissions.

“They are separate reduction requirements, but we’re working to make sure the results will also be harmonized within that plan,” Rees said. “In fact, we will be having some follow-up meetings with the power sector to talk about specific issues about the Clean Power Plan and this rule’s overlap.”

Reporter Elizabeth Harball contributed.