Wash. releases new version of carbon cap

Source: Elizabeth Harball, E&E reporter • Posted: Friday, June 3, 2016

Washington state yesterday released a new version of its proposal to cap carbon emissions from large sources.

The plan was released in response to concerns about the state’s original proposal, including how the rule would mesh with the federal Clean Power Plan. The Department of Ecology scrapped that plan in February (ClimateWire, Feb. 29).

But some in the power sector said the new blueprint still presents an unwieldy path toward meeting carbon reduction requirements set forth by both U.S. EPA and Washington’s Ecology Department.

“We believe we’ve made significant advancements in the rule to address those concerns,” Stu Clark, air quality program manager with the Washington Department of Ecology, said on a call with reporters yesterday

“It’s probably better than that original proposal” in ensuring emissions reductions, Clark added.

The framework of Washington’s new Clean Air Rule proposal remained largely unchanged in the new version. Starting in 2017, sources in Washington state that emit more than 100,000 tons per year of carbon must demonstrate a 1.7 percent annual average emission reduction every three years. The 100,000-ton threshold will decrease by 5,000 tons every three years until 2035.

It includes a provision that if the Obama administration’s regulation to curb carbon emissions is upheld by the courts, power plants in Washington will no longer be subject to the state emissions cap and will instead be subject to the federal rule.

But because Washington’s Clean Air Rule will take effect in 2017 and the Clean Power Plan may not kick in until 2022 at the earliest, power plants will have to comply with the state’s rule for at least five years.

Some in Washington’s utility sector said the state’s new proposal is still going to pose significant challenges for power plants if the Clean Power Plan is upheld.

“Our concern is that we think it’s important that the state, in anything that it does prior to the Clean Power Plan, assure that its program would be considered trading-ready under the Clean Power Plan,” said Therese Hampton, executive director of the Public Generating Pool, a group of 10 public utilities that serves about 1 million customers.

“The whole structure in the rule is set up in a way that it will not be a trading-ready program under the Clean Power Plan,” Hampton added, referring to a compliance method under the federal Clean Power Plan that would streamline utilities’ ability to trade carbon allowances with power plants in other states.

“It ends up creating a new rule that won’t be needed under the Clean Power Plan,” Hampton said.

Wash. looks to exceed EPA climate rule’s goals

Under the earlier proposal, environmental groups also raised concerns that the Clean Air Rule might not make it easy for utilities to meet the Clean Power Plan’s requirements (ClimateWire, March 2).

Washington’s carbon cap is ultimately more stringent than EPA’s Clean Power Plan, the Department of Ecology said yesterday.

“Under the Clean Power Plan, we might not have to do anything to meet the objectives in Washington with policies and programs we already have in place,” Clark said.

Washington is looking into allowing sources affected by the state rule to purchase allowances from other multisector carbon markets, such as the system already in place in California and Quebec. However, the Department of Ecology said it’s unlikely that the system will allow the purchase of allowances through the Regional Greenhouse Gas Initiative, a nine-state cap-and-trade system in the Northeast, because it only applies to the power sector.

Washington is still working to develop a plan to comply with the federal rule in case it is upheld by the court system.

“When we develop our implementation plan for the Clean Power Plan, we have some discretion as to what that looks like, and it’s our intent that we would develop a rule that is more stringent than the minimum,” said Sarah Rees, Ecology’s special assistant on climate change policy, during yesterday’s call.

“Another advantage to the Clean Power Plan is it allows for a more regional approach to the power sector so it would allow us to wrap in imported power, which right now the Clean Air Rule would just look at the power sector from within Washington state’s footprint.”

Green groups also left wanting more

In addition to the Clean Power Plan provision for the power sector, several other technical changes were made to the rule, which covers about two-thirds of the state’s overall emissions.

The state will administer a registry for emissions reduction units that affected sources can acquire as offsets; this is intended to ensure the integrity of the program, like through avoiding double-counting emissions reductions. The state will also create a reserve of emissions reduction units to distribute to new or expanding businesses; this is intended to protect economic growth. Lastly, energy-intensive and trade-exposed facilities will be given individual emissions reduction targets based on how their energy efficiency compares to similar facilities on a national level; this is also intended to protect economic growth and make sure these facilities do not leave the state as a result of the rule.

“The more efficient a business already is, the fewer carbon reductions it would have to make, and this recognizes the efforts some companies have already made to manufacture products more efficiently and reduce their emissions,” Clark said.

Environmental groups lauded Washington’s new proposal but also made it clear that not all their concerns were resolved.

“Governor [Jay] Inslee’s administration has gone a long way in crafting a draft Clean Air Rule that will start to transition Washington to a low carbon economy,” Adrienne Alvord of the Union of Concerned Scientists said in a statement. “While there is more work to do to ensure the rule is effective, we believe the administration has worked very hard to create a rule that results in reductions of heat-trapping pollution.”

In a joint statement, several environmental groups, including UCS, the Sierra Club and the Natural Resources Defense Council, said the new rule does a better job avoiding double-counting carbon offsets and praised it for placing an overall emissions limit for facilities subject to the rule. But the groups said issues remain, including a need for “further refinement of the use of offsets to guarantee that on-paper emissions cuts actually reflect real-world ones.”

After another comment period is completed, the Washington Department of Ecology expects to adopt the final Clean Air Rule later this summer.

It represents a continuation of Washington’s aggressive pursuit of measures to address climate change. As a result of the new carbon rule and other state policies, including a renewable energy standard of 15 percent by 2020 and a hydropower-heavy energy mix, “We will have a grid system that is 90 percent fossil-fuel-free in the next five years,” Inslee (D) said at an international clean energy conference in San Francisco yesterday. “We have decided to attack this beast in multiple ways.”

Reporter Debra Kahn contributed.