A Thurston County Superior Court judge ruling on Friday invalidated the state Department of Ecology’s Clean Air Rule due to a lack of statutory authority. For the time being, Ecology says it is weighing its options. It also remains to be seen whether the ruling will have any effect on anticipated carbon tax proposals made in the state legislature this upcoming session.
The Clean Air Rule would have required businesses that emitted more than 100,000 metrics tons of carbon dioxide (CO2) and CO2 equivalents annually to reduce their emissions by an average of 1.7 percent annually. Among those effected would have been fuel and natural gas suppliers, pulp and paper plants, metal manufacturers and waste facilities.
However, following oral arguments by the Association of Washington Business (AWB), which filed the lawsuit last fall, and Ecology, Judge James Dixon’s bench ruling concluded that Ecology could not regulate suppliers because their authority does not extend to those who sell products, only to those who directly emit carbon.
In a statement, AWB President Kris Johnson said: “We did not believe this rule was the right way to accomplish the goal of reducing emissions. It was unnecessary and, if the rule was allowed to stand, would have made it more expensive to heat homes, drive to work and grow a business in the state of Washington because it would have put Washington manufacturers at a competitive disadvantage to national and international companies.
“We can and will do more to reduce our state’s carbon emissions in a way that keeps businesses in Washington’s clean economy instead of driving them to other states and nations with less stringent standards,” he added.
Ecology Spokesperson Camille St. Onge told Lens that “we’re waiting to get the written order and evaluate it. We’re considering all of our options with our counsel,” which could include an appeal and/or legislative action. Inslee has already announced plans for a carbon pricing plan or tax as part of his 2018 supplemental budget, and lawmakers such as Sen. Guy Palumbo (D-1) plan to introduce their own carbon tax proposal this session.
Palumbo is the newly-appointed vice chair of the Senate Energy, Environment, & Technology committee, and earlier this year session proposed a carbon tax via SB 5930. Although it failed to garner a public hearing in Ways & Means, the election of Sen. Manka Dhingra (D-45) last month handed Democrats control over both chambers. A similar bill was introduced this year by Rep. Joe Fitzgibbon, but failed to get out of the House Committee on Environment.
Palumbo told Lens that “I think everybody you talk to, no matter Left or Right, it seems everybody agrees that a thoughtful, bipartisan legislative solution to the issue of climate change…is the preferred path.”
Unlike the Clean Air Rule, which would have been invalidated under SB 5930, Palumbo says his proposal for a flat-tax on carbon would involve little agency rulemaking. “Business is still looking for that preemption of regulatory certainty.”
The bill would also seek to lower carbon emissions by investing new state revenue from the tax into various carbon-reduction projects, such as restoring forest health and reducing storm water pollution. “If we’re going to do something on carbon, there’s got to be accountability on the expenditure of tax dollars,” he said.
The Clean Air Rule has proved controversial from its inception following an executive order by Governor Jay Inslee. Its practicality and benefits have also been called into question.
Though Ecology cited the Washington Clean Air Act, its authority to pass the rule was challenged early on by both employers and state lawmakers. Proponents of the rule pointed to emission goals set in 2008 by the legislature as justifying the executive order. However, a legal opinion by State Attorney Bob Ferguson stated that these reduction goals are not legally enforceable.
Ecology and members of the business community also clashed over its economic implications. The agency’s preliminary cost-benefit analysis estimated Washington employers would lose $1.3 billion to $2.8 billion over 20 years. However, in its formal comments to Ecology, AWB estimated that the rule would result in the loss of “over 34,000 jobs, and $7.3 billion in sales by year 2035.” Nearly half of those costs would be borne by small businesses.
Washington Policy Center’s Environmental Director Todd Meyers told Lens that, legality issues aside, the rule became convoluted in an effort to avoid “leakage” of jobs, and emissions, to other regions.
“If you’re trying to cut carbon without driving manufacturing out of the state, you end up creating all sorts of loopholes,” Meyers said. “Their approach was ‘The answer to too much government is more government.’ At the end of the day, there are only so many ways you can cut carbon emissions, and it’s going to raise the cost of energy.
“The challenge is how do you thread that needle, and government is really bad at threading that needle,” he added.