Washington Governor Signs Costly Global Warming Bill

Published June 1, 2004

Washington Governor Gary Locke (D) on March 31 signed House Bill 3141, requiring new power plants planned in the state to offset or mitigate 20 percent of their expected carbon dioxide emissions. The law, which takes effect June 10, does not apply to existing plants.

Under the new law, companies hoping to build new power plants in the state will not be given the necessary permits to do so unless they agree to offset the plant’s expected emissions.

Companies can comply with the new law by undertaking mitigation efforts such as planting trees (which sequester carbon dioxide), retrofitting diesel buses with cleaner-burning fuel, or investing in energy conservation.

Alternatively, companies can pay third parties approved by the state to undertake mitigation activities. Third parties must submit reports to the state and allow their mitigation efforts to be inspected and audited by the state.

Companies choosing the third-party option would pay at a rate of $1.60 for each metric ton of carbon the new plant is expected to emit over 30 years. According to Allen Fiksdal, manager of the Washington State Energy Facility Site Evaluation Council, which lobbied hard for the bill’s passage, a 650-megawatt power plant would be required to pay $11.5 million to offset its carbon dioxide emissions. The new law provides the fee can be adjusted biennially, but the adjustment cannot exceed 50 percent of the current rate.

The Site Evaluation Council and state Department of Ecology are charged with drafting rules for implementing the new law.

Mixed Reaction

K.C. Golden, policy director for Climate Solutions, a regional advocacy group seeking to head off global warming before it is a proven concern, welcomed the governor’s action but wanted more. “Further limits on global warming pollution from transportation and energy production will help us build healthier communities and a stronger economy,” he said.

Most experts on economics and global warming, however, disagree. Greenhouse gas controls are likely to hurt, rather than help, a state’s economy, they say, producing less-healthy communities as a result.

A recent study by The Heartland Institute, for example, found that if Washington State were to impose mandatory reductions in CO2 similar to those contemplated by the Kyoto Protocol, the average Washington household would pay more than $5,300 per year in higher-priced goods and services and lost income. The state government could lose more than $3.3 billion in tax revenue each year.

“By allowing third parties to mitigate (read: trade) carbon dioxide emissions, Governor Locke is sanctioning the precursor to a carbon cartel,” said Sandy Liddy Bourne, director of the American Legislative Exchange Council’s Environment, Natural Resources, and Agriculture Task Force. “The bill establishes a ‘finder’s fee’ to assist a company that wants to do business in Washington, take up to 50 percent of the mitigation credit, and ultimately raise the price of energy for the citizens of Washington with little to no environmental benefit.

“This is the Enron accounting methodology for improving air quality,” Bourne said.

“I was very disappointed in my House colleagues for passing the legislation and not looking at the science instead of listening to the environmental lobbying propaganda,” Rep. Jerome Delvin (R-Richland) told Environment & Climate News. “The environmental community could not get the U.S. Congress or the President to ratify the Kyoto Protocol, so now they are going state to state to promote their agenda. This type of legislation will hurt our state economies by higher energy prices,” said Delvin, who serves on the House Technology, Telecommunications and Energy Committee and voted against the bill.

In a floor speech expressing opposition to the bill, Rep. Lois McMahan (R-Gig Harbor) suggested carbon dioxide is in fact good for the environment. She explained to Environment & Climate News, “Not only do I believe there is no science to support global warming and contentions that we should be worried about a ‘greenhouse’ effect or carbon dioxide emissions, but I believe that carbon dioxide, which is required for plant growth, will encourage the growth of plants which breathe out oxygen and make the planet healthier for everyone.

“As legislators who have the ability to make changes in law which effect the lives of citizens and the economy of the state,” she continued, “we should have facts on our side before making changes that will have an adverse, far-reaching effect. This was not the case with HB3141.”

Power plant companies currently operating in the state also pointed out the bill could hurt the state’s economy by discouraging them from making new investments. “We just see that as a disincentive to build new generation,” said Dave Arbaugh, a spokesman for Calpine Corp., an independent power producer.

James M. Taylor is managing editor of Environment & Climate News. His email address is [email protected].

For more information …

The Heartland Institute’s February 2003 Policy Study, “State Greenhouse Gas Programs: An Economic and Scientific Analysis,” is available online at http://www.heartland.org/Article.cfm?artId=11559. An analysis specific to Washington State is available at http://www.heartland.org/Article.cfm?artId=11713.

The American Legislative Exchange Council’s report, “Sons of Kyoto: Greenhouse Gas Regulation in the States,” is available from the ALEC Web site at http://www.alec.org/meSWFiles/pdf/Sons%20of%20Kyoto.pdf.