Following on greenhouse gas (GHG) emission reduction goals enacted in 2007, the 2008 Washington Legislature has passed a bill, HB 2815, to implement near-term reductions in emissions through emissions trading and reduction in miles traveled, among other measures.1
As part of the plan, the Washington Department of Ecology (“Ecology”) must develop a system for reporting and monitoring GHG emissions within the state, and a design for a regional multi-sector, market-based system (e.g., a cap and trade system) to reduce statewide GHG emissions. The bill establishes benchmarks for reducing GHG emissions from the transportation sector and tasks the Department of Transportation with identifying strategies for reducing annual vehicle miles traveled by 18% by 2020. Finally, the bill creates a “green economy jobs growth initiative” that aims to increase the number of green economy jobs in the state to 25,000 by 2020.
GHG Reduction Plans and Design for a Regional GHG Trading Program
At the heart of HB 2815 is the requirement that Ecology develop and submit to the Legislature, by December 1, a comprehensive plan describing the actions necessary to achieve the required economy-wide GHG reductions mandated by the 2007 legislation, ESSB 6001.2 Under the 2007 legislation, the State aimed to reduce GHG emissions to 1990 levels by 2020, 25% below 1990 levels by 2035 and 50% below 1990 levels by 2050.3
The 2007 law, however, did not mandate these reductions nor did it identify how the emission reduction goals would be met. HB 2815 replaces the goals adopted in ESSB 6001 with concrete emission reduction requirements and directives that aim to ensure that the emission reductions set by ESSB 6001 are achieved.4
The new law also requires Ecology to develop, in coordination with other members of the Western Climate Initiative (WCI), a design for a regional multi-sector market-based system, such as a cap and trade program, to reduce GHG emissions in Washington.5 The WCI is a collaboration between western states, Canadian provinces and Mexican states.
In August 2007, WCI members announced plans to reduce GHG emissions, in the aggregate, by 15% below 2005 levels by 2020. Ecology is to coordinate design development with other state agencies, including the Washington Department of Community Trade and Economic Development (CTED). The recommendations to the Legislature must include proposed legislation, necessary funding and the schedule necessary to implement the preferred design by January 1, 2012.6
Other information that Ecology and CTED must provide the Legislature by December 1 includes:
- Information on the progress to date in achieving the required emission reductions targets;
- A request for additional resources and authority needed to limit and reduce GHG emissions, including implementation of the most promising recommendations of the Governor’s Climate Advisory Team;
- Recommendations for how local governments can participate in the regional GHG trading system being developed by the WCI;
- Recommendations for how generation of electricity or fuels from landfill gas and anaerobic digesters may receive offset credits in the regional GHG trading system being developed by the WCI; and
- Recommendations for how the state forestry and agricultural sectors may participate as offset providers in the regional GHG trading system being developed by the WCI.7
Emissions Reporting
The area where the new law may have the most immediate impact on businesses in the state is the new emission reporting requirement. The law requires Ecology to develop and implement a mandatory GHG emissions reporting program that covers all significant sectors of the Washington economy.8
Under the program, Ecology must identify a de minimis level of emissions below which reporting will not be required. The program must, however, require reporting by on-road motor vehicles (fleets) that emit at least 2,500 metric tons of GHG emissions annually in the state or operations that emit at least 10,000 metric tons of GHG emissions annually. Reporting for these entities would begin in 2010 for year 2009 emissions. In calculating emissions to determine whether reporting is required, only direct emissions are counted.9
There are several noteworthy aspects of the reporting mandate. First, GHG emissions from the burning of biomass are to be reported separately from emissions from fossil fuels.10 The reason for this is that the new law does not consider carbon dioxide emissions from the industrial combustion of biomass as GHGs “as long as the region’s silvicultural sequestration capacity is maintained or increased.” Second, the law allows Ecology to defer the reporting requirement for emissions associated with commercial aircraft, rail, truck and marine vessels, until “there is a federal requirement to report these emissions” or “the department finds that there is a generally accepted reporting protocol for determining interstate emissions from these sources.”11
Ecology may require payment of a reporting fee and may also impose penalties for failing to report or pay the proper fee. During the rulemaking process, the agency is to establish a reporting schedule and the process for verifying emission reports. Finally, Ecology is given discretion to amend the rules to make them consistent with future federal reporting requirements and to ensure that duplicate reporting is not required.12
Reducing Vehicle Miles Travelled
The new law also imposes requirements for reducing the annual vehicle miles traveled (VMTs) by residents of the state, which amounts to a surrogate for reducing GHG emissions from the transportation sector. HB 2815 requires the Washington Department of Transportation (DOT) to adopt broad statewide goals for reducing annual per capita vehicle miles travelled, including adopting benchmarks to decrease the annual per capita vehicle miles travelled by 18% by 2020, by 30% by 2035 and by 50% by 2050.13
In order to achieve these benchmarks, DOT is required to facilitate a collaborative process with other government agencies and business interests to develop tools and best practices for reducing VMTs. As part of this process, DOT must, among other things:
- Identify VMT reduction strategies being successfully implemented in other jurisdictions;
- Identify new revenue options for implementing VMT reduction efforts;
- Provide effective tools for measuring VMT reduction strategies;
- Establish a process for measuring the success of VMT reduction programs; and
- Estimate projected reductions in GHG emissions if VMT benchmarks are achieved.14
DOT must provide a report to the Legislature by December 1 on the collaborative process and recommended strategies for reducing VMTs.
Green Jobs Initiative
Governor Christine Gregoire has consistently tied the reduction of GHG emissions in the state with the opportunity to grow Washington’s clean energy economy. In her February 2007 Executive Order announcing GHG emission reduction goals, she also included a goal to increase the number of clean energy sector jobs in the state to 25,000 by 2020 (from 8,400 in 2004).
HB 2815 contains a “Green Economy Jobs Growth Initiative” that aims to help the state accomplish that goal. HB 2815, would, among other things: (1) require CTED, the Washington Employment Security Department (ESD) and several other state agencies to conduct labor market research to projected job growth in the green economy and to identify education and training requirements for workers in these industries; (2) direct CTED and ESD to recommend financial incentives and strategies to recruit, retain and expand green industries, and stimulate research in green technology; and (3) create a green industries job training account to distribute grants for workforce education programs.15
With the passage of HB 2815, Washington has joined California and a handful of other states in moving forward with the development and implementation of comprehensive strategies to reduce GHG emissions. What were previously theoretical emission reduction goals are now concrete requirements that must be met. Ecology will begin to conduct rulemaking to implement the directives of the new law. The reporting requirements, the regional GHG trading program and other measures implemented by Ecology under the authority of HB 2815 to reduce emissions will likely have an impact on the source and cost of energy and transportation in Washington.
For more information, please contact Michael Lufkin or any member of Marten Law Group’s Climate Change/ Sustainability Practice Group.
Marten Law Group provides the materials and information contained in this article for informational purposes only. This article is not a substitute for legal advice. Please consult with your legal counsel for specific advice and/or information. © Marten Law Group 2008.
1 HB 2815 can be viewed at http://apps.leg.wa.gov/documents/billdocs/2007-08/Pdf/Bills/House%20Passed%20Legislature/2815-S2.PL.pdf.
2 HB 2815 at Section 3.
3 Id.
4 Id.
5 HB 2815 at Section 4.
6 Id.
7 Id.
8 HB 2815 at Section 5.
9 Id.
10 Id.
11 Id.
12 Id.
13 HB 2815 at Section 8.
14 Id.
15 HB 2815 at Section 9.
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