Last week, the governors of the three West Coast states and the Premier of British Columbia signed the Pacific Coast Action Plan on Climate and Energy. While not legally binding, the Action Plan is important because it lays out a regional framework on climate and energy policy that is likely to be reflected in specific legislation and other measures adopted in each of the four jurisdictions, as well as in coordinated actions among the jurisdictions. Notably, the Pacific Coast regional economy produces a combined U.S.$2.8 trillion in GDP, making it the world's fifth largest economy when considered as a unit. Because the Action Plan charts a course for the future of this huge economy, the Plan is worthy of careful attention.
Issued under the auspices of the Pacific Coast Collaborative, the Action Plan lays out a series of policy goals in three areas, including climate policy, clean transportation, and clean energy infrastructure. Among these policy goals, several are particularly noteworthy:
First, the State of Washington "will set binding limits on carbon emissions and deploy market mechanisms to meet those limits" and Oregon makes a similar commitment to setting a price for carbon emissions. Washington's Climate Legislative and Executive Work Group is currently evaluating proposals that will form the basis for legislative action in the upcoming session and probably beyond, so the Action Plan is far from the last word on what form, if any, carbon limits and market mechanisms to meet those limits will take. But the Action Plan suggests that there will be strong pressure for some form of a cap-and-trade system.
Second, the Action Plan states that the Pacific Coast jurisdictions will "harmonize" targets for greenhouse gas reductions in 2050 and emphasizes that "[g]overnmental actions should be grounded in" the "scientific understanding of climate change." This suggests that the four jurisdictions will harmonize around the standard adopted by California, an 80% reduction of greenhouse gas emissions below 1990 levels by 2050, a standard based on recommendations from the UN's Intergovernmental Panel on Climate Change, the body charged with describing the state of climate science for policy-makers.
Third, the Action Plan sets a target to expand the use of zero-emission vehicles so that they account for 10% of new vehicle purchases by 2016. The Action Plan also states that Oregon and Washington "will adopt" low-carbon fuel standards.
Fourth, the Action Plan lays out several policies to encourage the development of the new infrastructure needed to meet the Plan's ambitious goals. For example, the plan would scale up the efforts of the West Coast Infrastructure Exchange, which is developing new models for financing infrastructure investments and would streamline permitting of renewable energy projects. Both developments would be welcomed by renewable energy developers, who frequently encounter significant delays and other difficulties in permitting new projects, especially where innovative technology is involved.
Finally, the Action Plan states that wholesale electricity markets should be more closely integrated, to provide consumer access to energy sources "across the region," and to expand the ability of energy users to purchase solar and wind power from across the region. Unfortunately, the participating jurisdictions, especially California, have adopted policies that favor their own renewable generators by imposing barriers to out-of-state renewable producers attempting to access these markets. Those barriers must come down if this goal is to be achieved.
If you have any questions about the matters discussed in this post, the electric utility industry, or other matters related to the energy or the environment, please contact a member of GTH's Energy, Telecommunications, and Utilities practice group or Environment & Natural Resources practice group. We're proud that our partner Jim Waldo was recently named 2013 Lawyer of the Year for Energy and Natural Resources Law, and practice group members Don Cohen, Bill Lynn, and Brad Jones were all named among Seattle's Best Lawyers.