Washington governor proposes slate of measures to curb GHG emissions transition state to cleaner energy; cap-and-trade and EV incentives

17 December 2014

Washington Governor Jay Inslee announced a set of proposals to transition Washington to cleaner sources of energy and to meet greenhouse gas (GHG) emission limits adopted by the state Legislature in 2008. The proposals build on a comprehensive executive order issued by the governor in April.

Cap-and-trade. The proposed “Carbon Pollution Accountability Act” (CPAA) would create a new, market-based program that sets an annual limit CO₂ emissions; major emitters will need to purchase “allowances” for their emissions. Each year, the number of available allowances will decline to ensure emissions are gradually reduced. The Governor’s office projects that the program will generate about $1 billion in the first year, and more thereafter, which will be used for transportation, education, tax relief for working families and other purposes.

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The CPAA will affect the relatively small number of businesses that generate 85% of Washington’s CO₂ emissions. The governor’s proposal was informed by recommendations from his Carbon Emissions Reduction Taskforce, which included representatives from business, labor, health care, utilities, at-risk communities, governments and others.

Cleaner transportation options for consumers. Nearly half the state’s CO₂emissions comes from cars, trucks and other transportation sources. For electric vehicles, Inslee will request legislation to:

1. Extend the existing tax incentives, exempting sales tax from the first $60,000
   of the purchase price of electric, natural gas, propane and hydrogen vehicles. Set to expire next summer, this exemption is considered the single most important factor for future success of electric vehicles in the state.

2. Create an EV infrastructure bank to provide financial assistance for the installation of publicly accessible high-speed charging stations. The bank would be funded by an existing fee on electric vehicles, and administered by the public-private partnership office at WSDOT.

3. Require urban cities and counties to adopt incentive programs to encourage the fitting of new structures and the retrofitting of existing structures with rapid charging stations for electric vehicles. This bill helps solve the garage orphan problem of condo and apartment residents who are great candidates for EV ownership due to their shorter trips in a dense urban environment, but for whom owning
   an EV is not yet practical because they can’t
   conveniently charge at home.

In addition, Inslee proposed to provide a toll and ferry fare credit to EV owners who buy a “Good to Go” or “Wave to Go” pass.

Further, the state Department of Ecology will request legislation to allow Washington to adopt a zero emission vehicle program that incentivizes the sale of ZEVs, including plug-in electric and hydrogen fuel cell vehicles.

Inslee has also asked the Department of Ecology to draft a clean fuel standard rule and to solicit review and comments from legislators, stakeholders and the public. An economic analysis performed for the Office of Financial Management shows a clean fuel standard could be designed in a way that has no significant economic effects.

However, the governor said before initiating formal rule making, “I want to allow time for feedback from the legislative and public review phases. I also want to see what proposals and progress are made as the legislative session unfolds.”

If a decision to pursue a rule is made at a later date, the process would require development of a formal proposed rule and an extensive public review process.

Sustainable transportation planning. WSDOT is implementing a five-part action plan to reduce carbon emissions
that come from cars, trucks and other transportation-related sources. The plan includes
an assessment of technical and financial needs of local communities, guidance related to land use and transportation planning,
and adoption of a long-term statewide multimodal transportation plan for strategic investment in providing people with more transportation options.

To develop the necessary information for the statewide plan, the Governor has approved the Department of Transportation’s funding request to purchase and implement modeling software, allowing the state to better analyze rural
and urban areas to identify the most cost-effective project investments that will relieve congestion for commuters and enable freight to get to market more quickly.

Clean energy industry funding. Inslee is requesting $60 million for the state’s Clean Energy Fund to help research institutions, utilities and businesses develop and deploy new renewable energy and energy efficiency technologies. During the 2013–15 biennium, the $40-million Clean Energy Fund leveraged $200 million in matching funds from private industry partners.

The governor has also proposed funding for other technology development efforts, including a new research building at the Center for Advanced Materials and Clean Energy Technologies and additional test beds at the Clean Energy Institute, both at the University of Washington.

To promote the use of solar energy in the state, the Washington State University Energy Office is drafting legislation to expand the state’s successful incentive program to allow more parties to join while more effectively targeting incentives.

Lower energy costs through greater energy efficiency. The governor is proposing several initiatives that will allow businesses, government, farmers and homeowners to lower their energy costs by increasing their energy efficiency.

Inslee is also proposing several capital budget investments, including weatherization projects that will cut energy costs for thousands of low-income homeowners and energy efficiency projects on public buildings that will capture savings for state taxpayers.

Clean technology development and climate science. Inslee proposed investments to support the engineering and science work at the University of Washington:

• Center for Advanced Materials and Clean Energy Technologies: predesign and design of a new research building to house the Center, to include the chemical engineering, material science and engineering and bioengineering departments. ($6.6 M, capital budget)

• Clean Energy Institute: construction of test beds to support moving new clean energy materials and technologies from development to market, including research and training, scale-up and characterization, and systems integration. ($12 M, capital budget)

• Climate Impact Group: to provide impartial knowledge, data, tools, and technical advice to identify and reduce climate risks to the residents, communities, economies and resources of Washington. ($0.98 M, operating budget)

• Washington Ocean Acidification Center: to continue coordination and research to understand, monitor, and adapt to increasingly acidic waters, and their effect on shellfish and fish. ($1.55 M, operating budget). (Separate funding is provided to DNR to continue funding the related work of the Marine Resources Advisory Council ($150 K, operating budget).)