Climate Change > 2008 Summary of Actions

Summary of Actions Required by the 2008 Climate and Green Jobs Bill (HB 2815)

Contents:

• Preferred design of the regional multi-sector market based system being designed under the Western Climate Initiative (WCI) including legislation, funding and schedule to have the system up and running by 2012.
• Propose changes to the greenhouse gas reporting requirements required to implement the market based system.
• Actions the state should take to prevent manipulation of the market based system.
• Recommendations on how local governments might participate in the system.
• Recommendations on how electricity or alternative fuel from landfill gas and anaerobic digesters may operate as a credit or offset in the system.
• Recommendation on how forestry and agriculture lands and practices may voluntarily operate as a credit or offset in the system. These recommendations are to specifically include the following types of lands and practices:
• Recommendation of the Climate Action Team’s most promising recommendations, including additional resources and statutory authority needed to implement these recommendations.
• Strategies to reduce the quantity of emissions of greenhouse gases per distance traveled in the transportation sector.
• Recommendation on how projects funded by the green energy incentive account in RCW 43.325.040 may be used to expand the electrical transmission infrastructure into urban and rural areas for recharging plug-in hybrid vehicles.
• A greenhouse gas reduction plan that will describe those actions needed to achieve the emission reductions adopted into statute through passage of SHB 2815. That plan must outline where the existing statutory authority exists and where additional authority may be needed.
• Information on progress to date in achieving the requirements included in the legislation.

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Passage of the Governor’s SHB 2815 during the 2008 legislative session requires the Departments of Ecology (Ecology) and Community, Trade and Economic Development (CTED) to provide several recommendations to the Legislature by December 1, 2008. In some cases, the recommendations are to come from the two agencies as well as from the Department of Transportation (DOT). Following is a list of those issues along with the agencies' thinking on how to approach developing the recommendations within the timeframe required. All of this work will be made available for public review and comment before the report is finalized. Specifics of the work plan are still being developed so for many of the individual tasks, a specific timeline is not yet available. If you are interested in any of this work, we encourage you to join the listserv as we will post information on all of these projects there.

Preferred design of the regional multi-sector market based system being designed under the Western Climate Initiative (WCI) including legislation, funding and schedule to have the system up and running by 2012. Ecology and CTED are continuing to work within the WCI to design the framework for a regional cap and trade program. The initial design framework is expected to be available for public review by late summer/early fall. We (the agencies) plan to work intensively with in-state stakeholders on developing the legislation needed to implement the program design to ensure we have the flexibility we need in-state and that the program will still function regionally.

Propose changes to the greenhouse gas reporting requirements required to implement the market based system. This will be part of the WCI recommendations. At this point, we anticipate needing to amend the reporting deadlines that were included in SHB 2815 so that we will have the same reporting period throughout the region.

Actions the state should take to prevent manipulation of the market based system. Ecology received funding for economic analyses of the cap and trade program in our supplemental budget request. We have included this question in that contract. In addition, the WCI has included market monitoring in the proposed actions for regional coordination and the Allocations subcommittee of WCI will also be addressing this issue.

Recommendations on how local governments might participate in the system. A local government may participate in a cap and trade program as an owner of a facility that emits greenhouse gases, just like any other facility owner. A local government may also create an offset project that it may sell to a capped facility, just like any other offset proponent. There would be no special rules or requirements for local government for either kind of participation. The question arose during the legislative session if there was a way for local governments to receive credit for the adoption of ordinances that could result in the reduction greenhouse gases. We are not aware of this type of credit being recognized in a cap and trade program. Therefore, Ecology has contracted with the World Resources Institute, one of the nation’s leading think tanks on carbon markets, to develop a report that addresses how cap and trade policies might be best designed to encourage and facilitate local government measures to reduce greenhouse gas emissions. Once that report is completed later this summer, we will meet with interested parties to determine the next steps.

Recommendations on how electricity or alternative fuel from landfill gas and anaerobic digesters may operate as a credit or offset in the system. As of this writing (May, 2008), the WCI is recommending that gases from waste facilities be included in the cap and trade program. However, because this is only an initial recommendation, Ecology has contracted with the World Resources Institute to prepare a briefing paper on how landfill gas and anaerobic digesters have or can participate in a carbon market. Information will be used from available sources on how the key offset criteria (real, additional/surplus, verifiable, permanent and enforceable) have been applied in the Regional Greenhouse Gas Initiative, EPA climate leaders and generally in the Clean Development Mechanism context. Once this report is completed this summer, Ecology and CTED will put together an internal group to determine the next steps.

Recommendation on how forestry and agriculture lands and practices may voluntarily operate as a credit or offset in the system. These recommendations are to specifically include the following types of lands and practices:

• Commercial and other working forests, including site-class specific forest management practices
• Agriculture and forest products, including accounting for substitution of wood for fossil intensive substitutes
• Agriculture lands and practices
• Forests and agricultural land set aside or manager for conservation
• Reforestation and afforestation projects

Two working groups have been established to look at forestry and agriculture in the market context. These groups will meet over the summer and early fall. Their work is to be completed by the end of September.

The forestry working group has decided to focus on commercial and other working forests, forest products and reforestation and afforestation projects. To assist the Forestry group, Ecology has contracted with the University of Washington, College of Forest Resources, to assess the current protocols available for the forestry lands and practices outlined in the legislation that enable those types of lands and practices to participate in the voluntary carbon market.

The agriculture working group will develop potential recommendations to meet the intent of the legislation and best position Washington’s farmers and ranchers for full, voluntary participation in an emerging carbon market. In addition, this group will provide insight into additional public policy mechanisms that could enhance adoption of GHG mitigating or /carbon sequestering agricultural practices and technologies by Washington producers.

Recommendation of the Climate Action Team’s most promising recommendations, including additional resources and statutory authority needed to implement these recommendations. Working with the Center for Climate Strategies and Ross and Associates (CCS/Ross), the Climate Action Team has been formed. Its first meeting was on May 13, 2008. Three additional meetings have been scheduled with a possible fourth meeting in mid-November. The CAT has four issues before it for which Implementation Working Groups have been formed. Facilitation and technical assistance will be provided by CCS/Ross:

1. Transportation, which will focus on Vehicle Miles Traveled (VMT) reduction as directed in SHB 2815 including recommending balanced and cost effective tools and best practices to achieve vehicle miles traveled reductions consistent with the benchmarks included in the legislation, taking into account urban and rural transportation requirements.
2. Beyond Waste, which will assess how to reduce products in the waste stream through manufacturer responsibility for recycling, other increases in recycling and reducing the waste stream in general
3. Energy Efficiency and Green Buildings, which will focus on the built environment and reduced energy use.
4. The State Environmental Policy Act (SEPA), which has climate named as an element of the environment that must be considered in permitting decisions. This workgroup will help develop strategies for how permitting agencies will be able to make those decisions.

Strategies to reduce the quantity of emissions of greenhouse gases per distance traveled in the transportation sector. Reducing greenhouse gases based on a per mile basis through cleaner energy sources for automobiles is one of the legs of the four legged stool to reduce emissions from the transportation sector. The other three are: clean cars, vehicle miles traveled, and system efficiencies. Incentivizing the development of cleaner energy sources is one of the arguments for including transportation fuels in a cap and trade program. As of this writing (May, 2008), the WCI is still assessing whether to recommend their inclusion. At the same time, significant work is being done in other states, notably California, on the development of a low carbon fuel standard. Finally, HB1303, passed by the legislature in 2007, directed the Department of Community, Trade and Economic Development (CTED) to explore vehicle electrification for Washington State. Ecology and CTED, in consultation with DOT and Agriculture, will be assessing the information on low carbon fuel standards as well as electrification to develop the strategies called for in HB 2815 later in the summer.

Recommendation on how projects funded by the green energy incentive account in RCW 43.325.040 may be used to expand the electrical transmission infrastructure into urban and rural areas for recharging plug-in hybrid vehicles. The green energy incentive account has allocated all appropriated funds to bioenergy projects, no new funding was provided to this account in 2008. CTED will briefly examine whether there are limitations to the regional transmission system which may impede future development of plug-in hybrid vehicles.

A greenhouse gas reduction plan that will describe those actions needed to achieve the emission reductions adopted into statute through passage of SHB 2815. That plan must outline where the existing statutory authority exists and where additional authority may be needed. With funding provided in the 2008 supplemental budget, the agency has hired an analyst who will assess the greenhouse gas reductions associated with the strategies already adopted by the state, the reductions expected through the adoption of the regional cap and trade program and the recently passed federal energy bill.

Information on progress to date in achieving the requirements included in the legislation. This will include progress reports on:

• Development of the greenhouse gas reporting requirements
• Development of the green economy initiative (see more)