business backgrounder | regulatory full speed ahead
By all accounts, officials are operating under a rushed timeline to implement an untested and complex policy that has generated more questions than answers for employers.
In June, shortly after officials released the second version of the proposed rule, AWB co-authored a letter to DOE requesting an extension of the comment period pending the answers to 15 pages of clarifications employers sought regarding various elements of the rule, including the purchase of carbon credits, how the rule would be implemented, and how the state was calculating costs.
One serious concern for employers is how the rule will impact industries that use natural gas, which will see a 20 percent price increase, according to Dan Kirschner, executive director of the Northwest Gas Association. This could drive a switch back to lower-cost( and higher-emissions) energy sources, Kirschner said. The ramification of that would be“ the exact opposite” of the intent of CAR, he said. Despite serious questions and concerns, the DOE intends to move ahead, undaunted by economic uncertainty the rule may create.
“ Carbon pollution has reached rampant levels and we’ re committed to capping and reducing it,” said Sarah Rees, DOE’ s special assistant on climate change policy, in a press release announcing the redrafted Clean Air Rule.“ Climate change is the most significant environmental issue of our lifetime, and governments need to act now to protect what we have today for future generations.”
Never mind that in Washington state— the only place where the rule will be enforceable— employers have already been acting on their own for decades. As a result, the state’ s emissions are below 1990 levels, according to the federal Environmental Protection Agency( EPA).
Looking at the bigger picture, the United States as a whole is responsible for 16 percent of total global carbon emissions, according to the Intergovernmental Panel on Climate Change( IPCC), the EPA’ s trusted source. Of that, Washington state’ s emissions are only 0.03 percent, the majority of which is attributed to transportation emissions.
The biggest emissions offender, according to IPCC, is China at 28 percent. Not only will the state’ s new regulation do nothing to reduce China’ s emissions, it runs the risk of driving employers out of Washington to places like China.
Washington state employers
have already been acting on their own for decades. Emission levels are below 1990.
‘ third rail’ no one mentions: costs will fall on consumers
Billed as tax on“ big polluters,” nowhere in the DOE’ s extensive“ Frequently asked questions about the Washington Clean Air Rule” webpage does the agency address how the tax will impact energy prices for consumers. The“ third rail” in the debate, Kirschner said, is being“ swept under the rug.”“ Consumers are going to foot the bill for this— that’ s 1.3 million natural gas customers in Washington state— that will see the cost to heat and power their homes increase under the Clean Air Rule,” Kirschner explained.“ The consequence of this policy is that our most vulnerable, those on fixed-income or living hand-tomouth, will be forced to choose between warmth and food.”
AWB’ s economic analysis reinforces Kirschner’ s assertion.
Global CO 2 Emissions( 2011)
Other Countries 84 %
at a glance
U. S. 16 %
Washington state 0.03 %
After bipartisan rejection of Gov. Jay Inslee’ s carbon cap-and-tax proposal before the 2015 Legislature, the governor issued an executive order last year directing the state Department of Ecology to draft regulations through state rules to cap carbon, sidestepping the Legislature altogether.
The second iteration of the Clean Air Rule, or CAR, was unveiled June 1, with public comment through July 22 and final adoption and implementation of the rule is scheduled for late fall.
The Association of Washington Business co-authored a letter to DOE dated June 17, asking for an extension of the comment period pending 15 pages of clarifications employers needed to calculate the cost of compliance.
AWB and a coalition of employer groups filed a lawsuit in September to stop CAR from being implemented.
The costs and consequences of the rule will not be fully known until it is implemented, which is scheduled to begin in 2017. fall 2016 37