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Getting a CLEW About Climate Legislation: Report to Governor's Climate Workgroup Suggests Future Course of Greenhouse Gas Regulation in Washington

October 18, 2013 posted by Eric Christensen

Earlier this week, Leidos (formerly SAIC International) delivered its final report evaluating greenhouse gas ("GHG") reduction policies from other jurisdictions to the Climate Legislative and Executive Workgroup ("CLEW"). The CLEW was created by ESSB 5802, the first piece of legislation sponsored by Gov. Jay Inslee, which is intended to establish the future legislative agenda for climate issues in our state. Leidos was retained as the CLEW's technical consultant. This week's Leidos report aims to help the CLEW quantify both the need for new climate legislation and the effectiveness of several approaches taken in other jurisdictions. The CLEW is scheduled to release its final report and recommendations at the end of 2013. The Leidos report incorporates the GHG emissions reduction targets adopted by the legislature in 2008. Those targets are: (a) to reduce Washington's GHG emissions to 1990 levels by 2020; (b) to reduce GHG emissions to 25% below 1990 levels by 2035; and, (c) to reduce overall emissions to 50% below 1990 levels by 2050, or 70% below the state's expected emissions in that year. Evaluating current policies at both the state and federal level, the report concludes that existing policies (for example, Initiative 937 and policies encouraging energy efficiency) will achieve substantial reductions in Washington's GHG emissions, but will fall well short of the 2008 targets. The report then evaluates a list of GHG reduction policies that have been adopted in other jurisdictions, estimating both the quantity of GHG reductions those policies might be expected to create and the cost-effectiveness of some of the approaches. The suggestion approaches include: 1. A "cap and trade" system, which would include a cap on GHG emissions and a system for emissions reduction trading. California is currently pursuing such a system, although federal legislation that would have adopted a cap-and-trade system died in the U.S. Senate in 2010. The report estimates that cap and trade would achieve by far the greatest reduction in GHG emissions, but does not estimate the cost-effectiveness of this approach. 2. A carbon tax. 3. A low-carbon fuel standard. 4. A zero emissions vehicle mandate modeled on California's LEV III Standard, which includes a suite of advanced vehicle technology requirements, emission controls, and a mandate for zero-emissions vehicles. 5. A 5% renewable fuel standard, which would increase to 5% the current requirement that 2% of Washington diesel sales be biodiesel. 6. A public benefit fund, which would create long-term funding for energy-related programs that benefit the public at large, such as energy efficiency and investment in renewables, funded through a surcharge on utility bills. 7. Property Assessed Clean Energy Programs ("PACE"), which provide a loan mechanism for property owners to fund energy efficiency technologies with loans repaid through a building-specific (rather than owner-specific) repayment scheme and a system of tax liens. 8. A Feed-In Tariff, capped at 375 MW. The report also notes that transportation accounts for 44% of Washington's GHG emissions, twice the amount for either the energy sector (22%) or for emissions from the residential, commercial and industrial sector (21%). It is therefore clear that, if Washington is to meet its GHG goals, it will need to adopt policies directed at the transportation sector. But the report also notes that relatively painless solutions may be available for transportation. For example, the report estimates that, while the sticker price of zero-emission or "transitional" zero-emission vehicles (such as plug-in hybrids) is estimated to be about $1,900 higher than a standard vehicle in the long term, the reduced operating costs of such vehicles result in a net consumer savings of about $4,000 over the life of the vehicle. Hence, in its cost-effectiveness analysis, Leitos estimates that a zero-emissions vehicle mandate could actually produce both savings for consumers and a substantial reduction in GHG emissions. If you have any questions about the matters discussed in this post, the electric utility industry, or other matters related to the energy or the environment, please contact a member of GTH's Energy, Telecommunications, and Utilities practice group or Environment & Natural Resources practice group. We're proud that our partner Jim Waldo was recently named 2013 Lawyer of the Year for Energy and Natural Resources Law, and practice group members Don Cohen, Bill Lynn, and Brad Jones were all named among Seattle's Best Lawyers.