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News / Business / Clark County Business

How will state’s Climate Commitment Act affect Clark County?

Allowances for each ton created must be bought in program

By Lauren Ellenbecker, Columbian staff writer
Published: March 7, 2023, 6:03am

Clarification: Vancouver is among 16 of Washington’s most impacted communities based on levels of air pollution

A story update reflects Northwest Natural’s comments made to The Columbian before it originally ran in print.

What exactly is this market-based tool that Washington officials deem as the state’s “most efficient path” to lowering carbon emissions?

The carbon-pricing structure, part of Washington’s 2021 Climate Commitment Act, is a head-scratcher due to its complex web of rules and regulations. But at its core, the greenhouse gas allowances provided through the state’s “cap-and-invest” program can be thought of as permission to pollute.

Yet the Washington Department of Ecology says the program will allow the state to eliminate most of its carbon emissions by 2050 — if everything goes according to plan.

Today, the state will provide a list of entities that were eligible for the auction, and it will likely include some familiar names. However, Ecology will not present the exact amount of revenue collected until March 28.

Large polluters — those emitting more than 25,000 metric tons of carbon annually — are required to buy allowances for each ton of carbon they create while transitioning to cleaner energy. They include oil refineries, fuel suppliers and distributors, pulp and paper mill companies and other industrial facilities.

Emissions-Intensive Trade-Exposed Industries, large polluters that face global market competition, are not exempt from the Climate Commitment Act but follow a different pathway. These entities will receive free allowances until 2034 with built-in conditions.

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The act also contains a provision that gives electric utilities no-cost allowances to prevent spikes in electric rates.

Slowly, Ecology will lower the cap for emissions, and offered allowances will decrease. This will push participants to comply with the cap-and-invest baseline at the required pace to achieve the state’s climate goals, according to the department.

The River Road Generating Plant in west Vancouver owned by Clark Public Utilities emits roughly 770,000 metric tons of carbon annually — automatically enrolling the utility in the cap-and-invest program.

Clark Public Utilities spokesperson Dameon Pesanti added that future facility updates will reduce its current output to 415,000 metric tons.

Under the state’s Clean Energy Transformation Act, the utility is already employing means to reduce its pollution, including reducing its dependence on natural gas from about 34 percent to 15 percent, he said. Concurrently, the utility will increase its hydropower use from 51 percent to 66 percent.

In Northwest Natural’s transition to clean energy, communications manager Stefanie Week said the company is “actively pursuing renewable natural gas” and other low carbon resources while enrolled in in the cap-and-invest program.

The company predicts there will be a bill increase for customers, though the cost will be unknown until the end of the year. Week added that it’s worth noting Washington is on an accelerate timeline for its program when compared to California, which similarly hosts a cap-and-trade auction for emitters.

“As a result, there is still much that is unknown for Washington’s program,” she said. “We are hopeful to see linkage with markets in other states and provinces in the near term.”

Leading up to the auction’s results being announced, participants in the cap-and-invest program were prohibited from discussing details surrounding its specific involvement to prevent market manipulation.

What’s the big deal?

Prices for the roughly 6.2 million allowances began at $22.20 per ton of emissions. Ecology estimates the auctions will produce about $1.7 billion through the next two years, which will be invested in environmental and clean energy projects.

At least 35 percent of these investments must directly benefit overburdened communities, according to state law.

And Vancouver makes the list.

In reference to the state’s Environmental Health Disparities map, Ecology rated Vancouver as among Washington’s  most impacted communities based on its levels of criteria air pollution. This encompasses common substances that harm humans and the environment: carbon monoxide, lead, nitrogen dioxide, ozone, particle pollution and sulfur dioxide.

Vancouver has high cumulative criteria air pollution, as well as elevated rates of fine particles, according to the map tool.

Other towns and cities on the list vary in location, size and composition — urban, suburban or rural. Those that also have high levels of criteria air pollution include Ellensburg, Everett and George and western Grant County.

Collectively, the 16 places that Ecology identified as high-impact areas represent more than 1.2 million people, or roughly 15.5 percent of the state’s population. Tribal communities were not listed; discussions between the state and tribal governments are ongoing.

Though the cap-and-invest program is described as a pillar of efficient climate solutions, hints of doubt are wedged into discussions surrounding future impacts. The trepidation — relayed by legislators and energy companies — refers to how the allowances may change energy costs in Washington, a state whose gas prices remain above the national average — $4.20 per gallon compared to $3.40, according to AAA.

Ecology officials contend that oil companies determine pricing on a variety of factors aside from what the allowances will cost them.

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This story was made possible by Community Funded Journalism, a project from The Columbian and the Local Media Foundation. Top donors include the Ed and Dollie Lynch Fund, Patricia, David and Jacob Nierenberg, Connie and Lee Kearney, Steve and Jan Oliva, The Cowlitz Tribal Foundation and the Mason E. Nolan Charitable Fund. The Columbian controls all content. For more information, visit columbian.com/cfj.

Columbian staff writer