Washington state’s new cap-and-trade rule tackles global warming

Washington state adopted a controversial rule Thursday to limit greenhouse gas emissions from large carbon polluters, joining a handful of other states in capping emissions to address climate change.

State environmental regulators finalized the Clean Air Rule, which requires large industrial emitters to gradually reduce carbon emissions over time. The change affects power plants, oil refineries, fuel distributors, pulp and paper mills, food processors and other industries and will cost millions if not billions of dollars to implement.

Some of the Mid-Columbia’s largest businesses will be affected by the new rule, though not until 2020 under a schedule the Washington Department of Ecology published this spring.

The rule requires businesses that emit more than 100,000 metric tons of carbon pollution per year to reduce their emissions by 1.7 percent annually, or in lieu of that, create off-site programs to mitigate their emissions or to purchase carbon credits, a type of environmental security. It would be extended to smaller polluters in succeeding years.

A state economic analysis indicates the costs for all businesses to comply over 20 years range from a low of $410 million to a high of $6.9 billion, depending on how they comply. The measure is also estimated to provide $9.6 billion in benefits over 20 years by improving environmental, health and other conditions.

“We are taking leadership under our clean air act, adopting a strong and practical plan to reduce greenhouse gases, and doing our fair share to tackle climate change,” Ecology Director Maia Bellon said in a statement.

In the Mid-Columbia, Agrium’s Kennewick fertilizer operations, Boise Paper’s Wallula plant, the JR Simplot and McCain Foods USA operations in Othello and Tyson Fresh Meat’s Wallula beef processing plant would fall under the Clean Air Rule based on their carbon dioxide and equivalent emissions.

Local power customers may be affected sooner.

Frederickson Power LP, a 249-megawatt natural gas-fired plant in Tacoma, will fall under the rule in 2017. It has long-term contracts to sell power to the Benton and Franklin public utility districts.

A company spokesman said the plant’s pollution control systems comply with the rule.

“We’re at the leading edge of this technology,” said Ric Chemesky, plant manager. “We think it’s not really going to affect us much with the technology that we have at this site.”

Electricity generated by natural gas represents only 2.4 percent of the power consumed by Benton PUD customers and 3 percent of the power consumed by Franklin PUD customers.

Critics of the rule, including business, say it will hurt working families, as costs are passed on to consumers. They say it will hamper the state’s ability to attract and retain businesses and limit the ability of energy-intensive businesses to compete globally.

The Washington Policy Center, an independent think tank with offices throughout the state, said cap-and-trade is a symptom of a “fail-and-blame” approach to climate policy that will drive up costs and induce Washington businesses to move.

Todd Myers, director of its Center for the Environment, said the rule was developed in a rush. As designed, it requires businesses to use the most expensive carbon-reducing strategies over the least expensive ones.

“This is about the most expensive and least effective approach to cutting carbon emissions,” Myers said.

State officials and others say limiting heat-trapping gases linked to global warming is needed to protect human health and the environment, and that the state faces severe economic and environmental disruption from long-term climate changes such as rising sea levels and more intense wildfires.

Gov. Jay Inslee sought the rule last year after failing to gain legislative support for a more ambitious plan to charge polluters a fee, similar to California’s cap-and-trade program. A coalition of Northeast states also has a cap-and-trade program that applies to power plants.

Unlike the cap-and-trade legislation Inslee sought last year, the rule adopted Thursday won’t charge emitters a fee for carbon emissions. Inslee had previously pitched a polluter fee as a way to raise more than $1 billion a year for schools, transportation and other state needs.

In November, Washington state voters will consider an initiative that would impose a direct tax on carbon emissions from fossil fuels burned in the state while lowering state sales and business taxes.

Initiative 732 would set the tax at $15 per metric ton of carbon dioxide in the first year then raise the amount to $25 per ton in the second year. Automatic increases would follow each year but the rate would be capped at $100 per ton.

This story was originally published September 15, 2016 at 8:34 PM with the headline "Washington state’s new cap-and-trade rule tackles global warming."