41 big polluters to get free passes in WA carbon trading market

Washington is required by law to eliminate or offset all of its greenhouse-gas emissions by 2050. But generous exemptions for more than 40 of the state’s biggest polluters in the upcoming carbon market could push that target beyond reach.

In January, The state’s ecology department will launch a cap-and-invest program Through which the state’s 99 biggest emitters will have to reduce emissions or pay to continue burning fossil fuels. While the list will be finalized later this year, as it stands, 41 large emitters will be allowed to pollute at no cost for at least the next 12 years.

This is because he was designated by the State Legislature as Industries particularly susceptible to the volatility of regional markets and global trade,

critics say Post Treats some industries as separate from others. State officials implementing the program agreed for the most part, but their hands are tied.

Leaving the rules unchanged, he said, could jeopardize statewide efforts to decarbonize.

“If [designated emitters] Don’t reduce their emissions and we are in 2040 and 2050, we probably won’t be able to meet our statewide targets,” said Luke Martland, the program’s implementation manager.

Only the new law will change how designated emitters operate after the next 12 years. earlier this year, a bill to do so failed to pass Legislature.

Exempt industries include petroleum refineries and pulp and paper mills as well as a handful of chemical, mineral and metal manufacturingRs, all of which collectively account for 10% of the statewide emissions covered by the program.

The pulp and paper mill, for example, is subject to change in the price and availability of wood and other raw materials. If the price of materials rises, the mill may struggle to absorb those costs and meet program orders, which require polluters to pay less emissions or the difference.

according to Department of Ecology, Lawmakers worried that global market competition compounded by tighter climate targets would prompt these companies to reduce their workforce and production, close shop or leave the state for less green pastures.

The state’s cap-and-invest program, a centerpiece of the Climate Commitment Act signed into law last year, is a market-driven compliance tool used by individuals, companies, cities, states and countries around the world to encourage fossil-fuel reductions. is done to. consumption.

Any organization that emits more than 25,000 metric tons of carbon dioxide every year is required to participate in the program. If they can’t or won’t do it fast enough, they can buy “perks,” which are the equivalent of emitting one metric ton of carbon dioxide each quarter during an online auction. The amount of these allowances will decrease over time, so raising the price and continuing to burn fossil fuels will become costlier.

Done right, the carbon trade can help the state achieve its ambitious goal. Or it could give pollutants a means to exit the system and avoid meaningful reductions in harmful, planet-warming gases for years to come.

The rules of the program are now being written, and will be finalized before the start of the programs on January 1, 2023.

Critics say the special designation and free perks would blunt the program’s impact.

Providing free allowance to heavy pollutants could prevent 90% reduction in industrial emissions by 2034 A report published earlier this month by Front & CenterA statewide environmental justice group led by communities of color.

The group went further, saying that any free pass to a carbon-trading scheme would poorly represent the program to reduce or eliminate emissions. The solution, he said, requires companies to eliminate large sources of pollution directly and promptly.

“If we’re not addressing this major source of greenhouse gases and local pollution, we’re not really addressing the problem,” said Front End Center co-executive director Derrick Gruen.

The effects of industrial pollution are especially pronounced among marginalized communities,

Still, Sen. Raven Carlyle, D-Seattle, a principal architect of the Climate Commitment Act, said the Front and Centered report did not recognize that the law requires all polluters to reduce emissions, even if they receive free allowances. meet. They are also subject to air-quality regulations designed to address concerns about environmental justice and industrial pollution.

“There is a belt-and-suspenders approach where we have a market-oriented system to find the most economically efficient emissions reductions,” he said.

Yet, these pollutants are only one piece of a formidable puzzle.

The program requires participants to account for about 75% of statewide emissions, including transportation, electricity, natural gas, refineries and other industrial sources.

The agriculture, aviation and marine industries, which make up the majority of the remaining 25%, were left out of the program due to existing state laws and federal regulations.

The state will decide the starting price of the allowances when the program starts in January.

Finding the right starting price is a balancing act, said Claire Boyette-White, communications expert for the Climate Commitment Act. “At the end of the day, we want institutions to comply voluntarily, cooperatively, openly, on time,” she said.

If the perks are too cheap, big polluters may consider the entire program a slap on the wrist. If allowances become too expensive, voluntary participation may decrease and large emitters may look elsewhere for a more affordable market.

“We want something in which businesses can participate effectively and successfully year after year,” Boyte-White said.

Earlier this year, the state had commissioned Independent study of the Climate Commitment Act.

Results published in July found that merging Washington’s carbon market with those of California and Quebec would significantly reduce the cost of perks and expand the market.

According to the analysis, each allowance is estimated to cost $41 if the Washington market is tied to them, but can be as high as 65% in different scenarios.

Rulemakers said the initial cost was estimated to be “very, very high” in the analysis. As a direct response, he decided to step up a reserve fund to help lower costs if allowances become too expensive. They will aim to merge the markets sooner than previously discussed, with a tentative target of 2025.

Energy providers in Washington are also subject to the Clean Fuel Standard – which was passed in 2021 and requires fuel providers to reduce the carbon intensity of transportation fuels, including gas and diesel, to 20% below 2017 levels by 2038 – as well as Healthy Environment Act for AllWhich facilitates inter-agency collaboration and funding to combat environmental injustice.

“We are well on our way to becoming the number one state in the country in terms of reducing our emissions in line with science-based targets,” Carlyle said. “It doesn’t make it easy.”

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