OLYMPIA — The Washington Legislature has mandated renewable electricity, subsidized the purchase of electric vehicles and dictated how much energy air compressors, generators and other equipment can use.
That was last year.
This session, Gov. Jay Inslee is urging lawmakers to get even more ambitious. Democratic legislators are advancing, at the governor’s request, several major climate-change bills.
One would require more renewable fuels in gasoline and diesel, a measure that farm groups say will drive up their production and transportation costs.
Another would apparently give the state Department of Ecology the power, if it chose to use it, to regulate anything that gives off measurable amounts of greenhouse gases, including tractors and other farm equipment.
And just last week, Sen. Reuven Carlyle, D-Seattle, re-introduced a cap-and-trade bill, the controversial policy aimed at reducing the amount of greenhouse gas that goes into the atmosphere as a way to slow climate change.
The legislative session has five weeks to go.
In mid-January, when the session began, Inslee said the need for action on climate change was a foregone conclusion.
“There should be no more debate in the state of Washington about this subject, or in the Legislature,” the governor said.
Soon after the Legislature convened, the Washington Supreme Court issued a long-awaited ruling.
In a 5-4 decision, the court said Ecology couldn’t hold oil and natural gas companies responsible for the greenhouse gases emitted when their customers used their products.
The ruling gutted the Inslee administration’s Clean Air Rule. “This ruling will significantly affect our ability to reduce emissions,” the governor said the day the ruling came out.
If the rule had stood, natural gas distributors and petroleum producers and importers would have had to reduce their emissions or buy emission-reduction credits to make up for what their customers released by such activities as heating their homes.
The Washington Farm Bureau had joined other business groups in the lawsuit challenging the rule. The court’s majority agreed that Ecology had authority to regulate only “actual emissions,” not “indirect emissions.”
Although the ruling was a setback for his administration, Inslee quickly turned to the majority opinion’s comments on climate change.
Chief Justice Debra Stephens wrote that the case was not about the “undeniable crisis of climate change.” The problem, according to Stephens, was that Ecology exceeded the powers the Legislature had given it under the state Clean Air Act.
“The issue is not whether man-made climate change is real — it is,” she wrote. “Nor is the issue whether dramatic steps are needed to curb the worst effects of climate change — they are.”
Said Inslee: “I couldn’t say it with more fervor or accuracy.”
“We’ll take this as a clarion call for more action, and I’m happy to sally forward,” the governor said. “The venue now for that dramatic action is the Legislature this year.”
Measure it, regulate it
House and Senate Democrats have now introduced bills to give Ecology the authority to regulate indirect emissions.
At a Senate Environment, Energy and Technology Committee hearing, Chris Davis, Inslee’s senior policy adviser on climate, described Ecology’s current powers as “incomplete.”
Sen. Doug Ericksen, R-Ferndale, asked what qualifies as an “indirect” emitter. “A lawn mower, leaf blower ... a farmer’s tractor?” he asked.
Later, he restated the question: “Would indirect include beef cattle or dairy cattle?”
The House and Senate bills do not define “indirect” emissions. At a hearing last year, Supreme Court justices had the same question: If Ecology can regulate indirect emissions, what can’t it regulate?
The lawyer arguing the case for Ecology, Laura Watson, who has since been promoted to the department’s director, said Ecology would be limited by its inability to precisely measure some things.
She cited greenhouse gases from livestock as an example — although Ecology does estimate emissions from enteric fermentation, the digestive processes of livestock.
Responding to a hypothetical question, Watson agreed that Ecology would be able to regulate greenhouse gases from wood stoves. “The point of regulation would be with the wood seller,” she said.
In the dissenting opinion, Justice Susan Owens wrote that Ecology’s ability to regulate only the emissions it can measure was a reasonable limiting principle.
Stephens’ majority opinion, however, issued a warning, and not about climate change. She wrote: “Left unchecked, Ecology’s expansive interpretation of its own authority would sweep many newly branded ‘indirect emitters’ into the regulatory web.”
Inslee is also urging lawmakers to follow California and Oregon and adopt a low-carbon fuel standard.
The policy seeks to reduce the “carbon intensity” of gasoline and diesel. Carbon intensity measures the greenhouse gases given off in producing, distributing and consuming a fuel.
Every source of power can be scored for its carbon intensity. Pure gasoline and diesel have high scores. Electricity, which primarily comes from dams, has a low score. Ethanol and biodiesel are in between.
The policy creates a market: suppliers of high-carbon fossil fuels must buy credits from suppliers of low-carbon renewable fuels.
The market effectively taxes high-carbon fuels and subsidizes low-carbon fuels, according to the California Legislative Analyst’s Office.
However, the public eventually pays the cost, according to the office’s 2018 assessment of the program. “These higher costs have real adverse effects on households,” the report stated.
To highlight one potential effect on agriculture, three farmers testified to the Senate environment committee that gas mixed with ethanol increases equipment maintenance. They said they already pay a premium for pure gasoline.
“This is so important we pay about 40 cents per gallon extra to have non-ethanol fuel on the farm,” said Mike Clayton, who grows apples and cherries near Lake Chelan.
Reed Schuler, another senior policy adviser on climate in the governor’s office, said a low-carbon fuel standard is a top priority for Inslee. Transportation is the No. 1 source of carbon emissions in Washington. “We do not have any other tools to do as much as cheaply to reduce carbon pollution from transportation,” Schuler said.
Under Inslee’s proposal, transportation fuels would have to be 20% less carbon intensive by 2035. The standard would be phased in. As time went on, the policy’s influence on pump prices would increase.
Although California adopted the policy in 2011 and Oregon in 2015, both states are many years away from fully implementing their standards — a 20% reduction in carbon intensity by 2030 for California and a 10% reduction by 2025 for Oregon.
Whatever the percentage, the impact will show up at the pump as higher fuel prices.
By 2030, California’s policy could add as much as 36 cents per gallon at the pump for gasoline and 44 cents to a gallon for diesel, according to a 2018 staff report by the state’s Air Resources Board.
The Oregon Department of Environmental Quality has not made a long-range projection on fuel prices.
California’s Air Resources Board report also estimated that state and local governments will collect $889 million more in sales taxes between 2019 and 2030 as the cost of consumer goods rises because of higher fuel costs.
Eastern Washington tree fruit grower Ben Buchholz told the Senate environment committee that after labor, fuel is the biggest expense for his family’s farm. He said a low-carbon fuel standard would cost his farm several thousand dollars a year.
“It may not seem like much money to some people, but my dad and I each took home less than the state’s minimum wage this year from the farm,” said Buchholz, who’s also executive director of the Northwest Agricultural Cooperative Council.
Buchholz said the low-carbon fuel standard would hit drivers like a regressive gas tax. “It will hurt my family and our employees harder than those taking home larger incomes and commuting shorter distances in urban areas,” he said.
Inslee dismisses claims that pump prices will rise much, if at all. “I don’t buy that bilge from the Republican Party,” he said.
At his Jan. 16 press conference, Inslee pointed to California’s and Oregon’s experiences in the “real world.”
“In California, the real world impact is that gasoline today is 40 cents cheaper per gallon than it was the day this rule went into effect in California,” Inslee said.
California’s low-carbon fuel standard went into effect Jan. 1, 2011. That week California gasoline prices averaged $3.35 a gallon — 14 cents lower than the average price of $3.49 a gallon the week Inslee spoke, according to the U.S. Energy Information Administration.
The governor’s office clarified that Inslee’s statement was based on gasoline prices after California’s standard was in effect for three months.
During that time, gasoline prices spiked nationwide. The Energy Information Administration cited disrupted oil production in Libya and increased demand for oil as the global economy improved. By early April, the average price of gasoline in California was $4.10 a gallon.
Inslee also noted that Oregon’s low-carbon fuel standard has increased the cost of gasoline by about a penny a gallon. “It’s marginal,” he said.
Oregon’s Department of Environmental Quality estimated the low-carbon fuel standard added 0.98 cent a gallon to gasoline and 1.13 cents to diesel in 2018. Because the policy is phased in, fuel suppliers had to reduce carbon intensity by 1%.
The standard went up to 1.5% in 2019. The state has not yet estimated the policy’s impact on pump prices for that year, said Cory-Ann Wind, the state’s clean fuels program manager.
Worse-case scenarios for price increases are just that — worst-scenario cases, Wind said. Price increases will depend on the supply and demand for alternative fuels, she said.
The department’s most recent fuel forecast says the potential supply of ethanol, biodiesel and renewable diesel far exceeds demand. “I think there are enough low-carbon fuels to go around,” Wind said.
If Washington adopts a low-carbon fuels standard, more companies may generate alternative fuels to supply the West Coast, she said. Oregon already benefits by being next to a state that’s a huge attraction for suppliers of alternative fuels, she said.
“In a market sense, California is a beast,” Wind said. “It doesn’t make sense to not be aligned.”
Cap and trade requires manufacturers, electric utilities, natural gas suppliers and oil refineries to reduce their greenhouse gas emissions or bid for “allowances” from the state. An allowance equals one metric ton of carbon emissions.
The allowances are meant to encourage carbon reductions. They also are a source of new government revenue.
Since 2012, cap-and-trade auctions have raised $12.5 billion for California’s greenhouse gas reduction fund, according to the state’s Air Resources Board.
Last year, the Washington Department of Revenue estimated cap-and-trade auctions would raise $1.6 billion the first two years. The proposal, as in previous sessions, did not pass.
Soon after Carlyle, who’s chairman of the Senate Environment, Energy and Technology Committee, re-introduced the bill, the Farm Bureau issued an “action alert,” warning members the policy would raise fuel prices and urged them to contact legislators.
By design, cap and trade increases gasoline and diesel prices to discourage consumption, according to the state Legislative Analyst’s Office.
More broadly, cap and trade redistributes income from households and businesses to whatever purposes the state chooses, according to the legislative analysis.
Carlyle’s measure, Senate Bill 5981, would put auction proceeds in four accounts. The accounts would fund a broad range of energy, environmental and transportation projects under the recommendations of an Environmental and Economic Justice Panel.
The nine-member panel, appointed by the governor, would have at least three tribal members, two union leaders and four people representing “vulnerable populations.”
The Commerce Department would consult with the justice panel to develop a support program for “displaced” union and “non-supervisory” workers in the oil and natural gas industries who “are affected by the transition away from fossil fuels.”
Public and private groups could apply for grants for carbon-reduction projects. The requirements would include contracting with women, minority or veteran-owned businesses.
The cap-and-trade program would be tied to the state’s carbon-reduction ambitions. If the state sets stricter limits, regulated businesses would have to make deeper reductions in greenhouse gases or bid for more allowances.
Raising the bar
Justice Stephens, in declaring a need for dramatic steps, cited the Intergovernmental Panel on Climate Change.
The IPCC estimates global mean temperatures have risen 1 degree Celsius — 1.8 degrees Fahrenheit — since 1900. If the pace of warming continues, temperatures are likely to be 1.5 degrees Celsius above pre-industrial levels by between 2030 and 2052, the IPCC said in a report.
The report continued, however, that rising temperatures could be averted with rapid and steep reductions in greenhouse gases.
The University of Washington’s Climate Impacts Group localized the report in a brief titled, “No Time to Waste.”
If average temperatures rose 1.5 degrees Celsius, Washington’s snowpack would be 38% smaller than the average snowpack between 1970 to 1990, according to the brief.
Inslee has proposed cutting the state’s carbon emissions to 95% below 1990 levels by 2050. The remaining 5% would have to be offset with carbon-storage projects. The aspiration to have “net-zero emissions” by mid-century matches the Green New Deal offered by U.S. Rep. Alexandria Ocasio-Cortez of New York and Sen. Edward J. Markey of Massachusetts. Both are Democrats.
The United Nations Environmental Program estimated global emissions in 2017 at 53.5 gigatons. Based on Ecology’s number for the year, Washington emitted about 0.18% of global emissions.
The Legislature in 2007 set a “goal” of reducing carbon emissions by 50% below 1990 levels by 2050. The next year, lawmakers changed “goal” to “shall.”
Whether a goal or a limit, the law has not reduced emissions. According to Ecology, the state emitted 97.43 million metric tons of greenhouse gases in 2006, the year before lawmakers set goals. In 2017, the latest year figures have been calculated, the state emitted 97.45 million metric tons.
As an interim step toward 2050, Inslee has proposed cutting carbon emissions to 45% of 1990 levels by 2035. Because emissions have gone up since 1990, it would take a 58% reduction from the 2017 level.
“Achieving just the first benchmark of this bill will be the same as removing every single gas-powered car, bus, truck, train, airplane from this state in 10 years,” said Peter Godlewski, director of energy affairs for the Association of Washington Business.
Eliminating gas-powered transportation wouldn’t quite reach the 2030 goal. If the state also eliminated livestock, manure, greenhouse gases from fertilizer, and some industrial processes such as making cement, the goal would be within reach.