2021 Climate-Related Legislative Outcomes

The regular 2021 Washington State Legislative Session produced a suite of ambitious climate-related legislation as Washington looks to reduce greenhouse gas emissions 25% below 1990 levels by 2035 and become carbon neutral by 2050.

More than a dozen pieces of legislation address a range of progressive policies, from pollution reduction to a cap-and-trade investment program, to tree planting. This blog will look at two bills tagged by Governor Jay Inslee as part of a climate priorities package (HB 1091 and SB 5126), as well as HB 1216, which promotes urban forestry programs; HB 1114, which encourages utility-based tree-planting programs; and HB 1287, which directs the state to begin preparations for an zero-emissions transportation future.

Climate Commitment Act

The Climate Commitment Act, or SB 5126, creates a cap-and-trade investment program that aims to reduce greenhouse gas emissions from the largest greenhouse gas emitters in the state and invests in programs and projects that will reduce emissions, expand clean transportation, improve climate resiliency, and reduce air pollution in communities experiencing poor environmental quality. 

The new law directs the Department of Ecology (Ecology) to develop the cap-and-trade program starting Jan 1, 2023. This program covers any facility that emits at least 25,000 metric tons of carbon dioxide equivalent a year, including industrial facilities, certain fuel suppliers, in-state electricity generators, electricity importers, and natural gas distributors.

Emissions are capped at 25,000 metric tons of carbon dioxide annually. Any facility that exceeds the cap will need to buy pollution credits through the cap-and-trade program. Alternatively, if a facility reduces emissions below the 25,000-ton cap, they generate credits that they can bank for future use, trade with other companies, or sell at auction.

Emissions limits will be tracked, verified, and enforced through the use of “allowances.” The state will auction off some allowances, but others are free to certain entities:

• Electric utilities are provided free allowances under the 2019 Clean Energy Transformation Act. Any electric utility that reduces emissions below their free allowance level can auction the remaining allowances and, per session law, use the proceeds to minimize cost impacts on customers (prioritizing low-income customers) through “actions that include, but are not limited to, weatherization, decarbonization, conservation and efficiency services, and bill assistance.”
• Natural-gas utilities get free allowances equal to their emissions the first year. Starting in 2023, they must auction 65% of those free allowances, with the number rising by 5% a year up to 100%. All proceeds from auctions must be returned to customer support efforts; however, only residential households that are already currently connected to the natural-gas system qualify for bill credits.

State revenue raised from the sale of allowances will help fund activities that build climate resilience, improve air quality, and create green jobs. The Climate Commitment Act requires at least 35% of these investments to provide direct and meaningful benefits to communities that are disproportionately burdened with environmental harms and health impacts, and for these investments to be guided by an environmental justice assessment. 

Clean Fuels

HB 1091 creates a Clean Fuels program designed to reduce the carbon intensity of transportation fuel, similar to existing programs in California and Oregon.  

The law directs Ecology to develop a Low Carbon Fuel Standard (LCFS) for the state. The overall goal is to reduce the greenhouse gas emissions attributable to each unit of the fuel energy (expressed in grams of carbon dioxide equivalent per megajoule) to 20% below 2017 levels by 2038 based on the following schedule: 

• No more than 0.5% each year in 2023 and 2024; 
• No more than an additional 1.0% each year beginning in 2025 through 2027; 
• No more than an additional 1.5% each year beginning 22 in 2028 through 2031; and 
• No change in 2032 and 2033. 

The law excludes exported fuel, electricity, fuel used by vessels, railroad locomotives, and aircraft, and certain other categories of transportation fuel, but it includes “transportation fuel with a low carbon intensity in sectors including, but not limited to, biofuels, agricultural and forest biomass, hydrogen produced via electrolysis of water, and renewable natural gas.” 

Fuel producers that reduce the carbon intensity of their fuels over time can acquire compliance credits, and the revenues from credits sold can be reinvested back into other clean fuel generating activities like electrification of transportation. 

Ecology has posted rulemaking timelines for the Climate Commitment Act and the Clean Fuels program, with a proposed adoption of cap-and-invest program rules (Chapter 173-446 WAC) by fall 2022 and the proposed adoption of a Clean Fuels rule (Chapter 173-424 WAC) by winter 2022.

Urban and Community Forestry

Under HB 1216, the Department of Natural Resources (DNR) is tasked with modernizing the state’s urban and community forestry program, which provides technical assistance and capacity building resources to entities that establish urban and community forestry programs. The use of trees and vegetation in the urban environment can mitigate the urban heat island effect; reduce energy use by protecting buildings from sun and wind; improve air quality by removing air pollutants and storing and sequestering carbon dioxide; and enhance stormwater management and water quality by reducing and filtering rainwater runoff.

HB 1216 directs DNR to:

• Assist cities, counties, and tribes in doing tree inventories and canopy studies;
• Conduct analyses of the needs and opportunities of urban forestry in Washington and complete a statewide tree inventory, which must be maintained and periodically updated;
• Identify priority regions (by reviewing health disparity mapping tools and salmon and orca recovery data) for the implementation of urban forestry programs;
• Develop templates for local entities, such as urban forest management plans or tree and urban forest protection ordinances; and
• Ensure that tools developed are compatible with existing and developing urban forest carbon market reporting protocols.

The law also allows a property owner to opt out of a tree program operated by a city, county, or tribe, provided they first notify the local government of this decision.  

Urban Heat Islands

HB 1114 encourages municipal electric utilities, public utility districts (PUDs), and investor-owned utilities to engage in tree-planting activities to reduce the negative effects associated with urban heat islands.

The urban heat island effect is a result of large areas composed of dense buildings, concrete, and asphalt that absorb heat and re-emit it, leading to higher temperatures than rural areas where heat is diffused into the natural landscape. However, trees and a dense tree canopy in an urban area can help to reduce the impact of the heat island effect.

The law encourages utilities to develop broad energy conservation programs with multi-faceted goals, including tree planting programs or cool roof programs that improve the efficiency of energy use. It also allows the utilities to solicit and use voluntary donations from customers to fund these programs and authorizes the Utilities and Transportation Commission to adopt a policy that would incentivize investor-owned utilities to develop similar programs.

Zero-Emissions Transportation

HB 1287 directs the state to develop an electrical vehicle (EV) refueling infrastructure mapping tool, ensure electric utilities are planning for an increased electrification load, and strengthen the state’s EV readiness requirements in support of a zero-emissions transportation future.

The Washington Department of Transportation is charged with developing a mapping and forecasting tool that will predict where electric vehicle charging infrastructure will be built, how fast electric vehicle adoption will occur, traffic flows, electric demand for vehicle charging, and other factors to aid utilities and government agencies in planning for electrification of the transportation system. Importantly, the legislation defines “electric vehicle” broadly to include not just passenger vehicles, but boats, public transport, commercial vehicles, and vehicles used in the transportation of goods.

The Washington State Building Code Council is tasked with adopting rules for electric vehicle infrastructure requirements, as all new buildings with parking facilities must be constructed with wiring that will accommodate charging stations for at least 10% of parking spaces.

The law also requires electric utilities to analyze how their facility resource plans can account for an anticipated increase in electricity load due to increased levels of EV use within the utility’s service area. 

Conclusion

This blog touches on just a few of the several climate-related bills from the 2021 legislative session. We’ll be looking at additional bills as part of MRSC’s Local Climate Response Project.