Effective Climate Policy for Washington, Step One: Count Emissions Correctly

October 21, 2013

As part of Governor Inslee’s climate workgroup, known as CLEW, for Climate Legislative Executive Workgroup, state officials are taking public comment about the future of climate policy in Washington. The state hired a consulting firm, SAIC, to issue a report on various strategies to reduce Washington state’s carbon emissions.

This week, we will analyze that report and look at how we can get the greatest environmental benefit for every taxpayer dollar.

Today, we assess Washington state’s carbon emissions and identify the best opportunities to cut those emissions. If we exaggerate the emissions or get the sources of emissions wrong, we will spend far more money than necessary and waste time and effort focusing on areas where little is to be gained for a cleaner environment.

Washington’s Decarbonized Economy

Washington has one of the lowest levels of carbon emissions per capita in the country. As you can see below, Washington ranks 42nd in the country in emissions, nearly 40% lower than the national average.

The Governor’s stated goal of reducing state emissions by 80 percent by 2050 would put us at 2.26 metric tons of CO2 emissions per person per year – about 12 percent of the current nationwide average. Such an aggressive goal compared to the rest of the nation punishes Washington state for the fact that we are already fairly decarbonized.

This extreme reduction goal isn’t just an economic concern – it also affects our climate policy.

If our climate policy is not realistic, it will simply moves carbon emissions to other states and countries. For example, Washington’s largest reductions in carbon emissions in recent years occurred in 2001. High electricity prices drove the aluminum industry, long a staple of our economy, out of the state. Of course, aluminum is still being produced – and the carbon emissions with it – somewhere else, perhaps in a place where energy is more carbon intensive. Any benefit to the planet of closing Washington’s aluminum plants was zero. If we push toward unattainable goals, we will simply displace carbon emissions to other place, rather than reducing them overall.

Rather than setting an arbitrary goal of reducing emissions by 80 percent compared to past levels, we should decide upon a reasonably attainable per capita level. That recognizes the steps Washington has already taken and sets achievable goals.

State Miscalculates Washington’s Electricity Emissions

A key enemy of creating real carbon reductions is the way we account for emissions from electrical generation which, according to the Department of Ecology, account for about one-fifth of total emissions.

Currently, the focus is on a contract-basis for counting. If a utility in Washington has a contract for coal-generated electricity in Montana, the emissions produced in another state are counted against Washington state. On the other hand, carbon-free energy produced here but sold outside the state is not counted in our favor. This skewed accounting method creates some bizarre results.

If we send a kWh of clean hydro-produced electricity to California, it doesn’t count as reducing carbon emissions. When they turn around and send a kWh of electricity produced with natural gas to us, we get charged for emissions that occur out of state. It is energy laundering in reverse: we send it out clean power, but electricity we import is counted as dirty.

This approach encourages accounting games that do not actually help the planet. For example, Seattle City Light simply switched its contracts from TransAlta’s coal-fired plant to other sources (hydro and nuclear) and claimed to have cut carbon emissions. In reality, however, the same carbon emissions still were created, since TransAlta continues to produce, they just show up on someone else’s ledger. The planet wasn’t helped at all, but Seattle officials did get to score political points.

The contract-basis of accounting encourages these sorts of games. We have to focus on a better approach.

One approach that is more accurate and gives Washington credit for our abundant clean energy, is comparing total in-state production to total in-state consumption.

According to the Energy Information Administration, in 2010, Washington produced 103,473 million kWh of electricity. We consumed 91,423 million kWh. Thus, we generated 12,050 million kWh more than we consumed. Put simply, if we decided to stop purchasing out-of-state tomorrow, we could do it.

Additionally, Washington produced 84,146 million kWh of carbon free energy (nuclear, hydro and renewables) in 2010. We needed an additional 7,277 million kWh of natural gas and coal-produced power to make up the difference. That amount of carbon-emitting energy produced about 5.4 million metric tons of CO2. This is about one-quarter the amount the state is charged with emitting (20.7 million metric tons), because we count some power produced in other states against us.

An Approach that is More Fair and Effective

Counting emissions based on total supply versus total demand would bring a number of benefits for the environment, and it would be more fair.

First, effective counting would not encourage Washington utilities to simply shift contracts around to make it look like we are doing something for the environment when we are not.

Second, by exaggerating the amount of carbon emissions from electricity, as the state currently does, it causes us to waste time and effort on strategies to cut electricity use when the best strategies for the environment lie in other sectors.

This approach is also more fair. Under the system used currently by state officials, we are essentially subsidizing renewable energy production in other states. Lastly, from a purely economic standpoint, unfair counting punishes Washington state for being ahead in clean-energy production and rewards states that lag behind.

No system is perfect to be sure. Any system of accounting will encourage some tricks to change the numbers to get a desired outcome. A total demand versus total supply approach, however, is much simpler and less susceptible to letting officials play games.

If Washington is going to correctly prioritize efforts to effectively reduce carbon emissions, we need to start with accurate data. When it comes to Washington state’s carbon emissions from electricity, the state’s data is misleading and inaccurate.