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Cutting pollution, driving investment: US state leaders shared ambitious models for action at COP26

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By Katelyn Roedner Sutter

While many of the headlines from COP26 focused on whether newly announced national commitments will be enough to curb catastrophic global warming, our ability to fend off the climate crisis largely depends on what happens outside conference walls — namely, how quickly we translate climate commitments into policy that curbs pollution.

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This COP saw the largest-ever, bipartisan U.S. subnational delegation, including six governors and dozens of state lawmakers, who were there to discuss progress on slashing greenhouse gas emissions. It was a strikingly different context from the last three COPs when U.S. leadership on climate was absent at the federal level, and state leaders stepped up to send a message to the world that U.S. states, cities and corporations were still committed to meeting the goals of the Paris Agreement. However, state officials did not come to Glasgow to pass the baton back to the Biden administration; all were there to demonstrate how they are putting in place policies that can help the U.S. meet its ambitious new National Determined Contribution (NDC).

One key policy that is already delivering quantifiable results at the state level is cap-and-invest, which puts a limit on climate pollution while driving significant investments in climate mitigation and resilience. The Western Climate Initiative (WCI) and the Regional Greenhouse Gas Initiative (RGGI) are already keeping emissions in participating jurisdictions within a steadily declining budget, and Washington state’s new Climate Commitment Act provides the onramp to get a program up-and-running by 2023.

At a COP26 event hosted by Environmental Defense Fund, International Emissions Trading Association (IETA), and National Caucus of Environmental Legislators (NCEL), state and environmental leaders discussed how these leading programs can help states meet their targets, promote equity, drive progress on our national target and offer valuable lessons learned.

Here are four key takeaways:

1. Binding pollution limits provide certainty that states need to reach their climate goals

The momentum for cap-and-invest policy is growing across the U.S. and shows that state lawmakers and advocates increasingly recognize that binding, declining limits (or caps) on climate pollution are crucial for meeting targets, whether it’s economy-wide targets or sector targets. While investments and incentives are critical tools for scaling up clean energy, electric vehicles, emerging climate technologies and more, they alone cannot guarantee that pollution falls at the pace and scale we need. This is where binding limits play a vital role as a ‘backstop’ on emissions within a portfolio of different climate tools.

Several states and regions are already harnessing this strategy:

  • The Western Climate Initiative, an economy-wide cap-and-invest program currently linked between California and Quebec, began eight years ago. With this program in place alongside a suite of other strong policies, California paved the way for state leadership on climate change and met its 2020 emissions target four years early. Now, California has a clear opportunity to raise its ambition as it charts the next phase of its climate fight with its 2030 Scoping Plan.
  • Washington state passed the Climate Commitment Act in Spring 2021, which sets the most ambitious, economy-wide limit on climate pollution in the country. The program is expected to begin in early 2023.
  • On the East Coast, 11 Northeastern and mid-Atlantic states are limiting power plant pollution through the Regional Greenhouse Gas Initiative (RGGI). Now, Pennsylvania, one of the biggest emitters in the country with a history of fossil fuel use and production, is nearing the finish line on its rulemaking to link to the program. And North Carolina’s Environmental Management Commission stepped up to start the rulemaking process this summer, spurred by a citizen petition put enforceable limits on power plant pollution.

While all of these programs tackle different sources of pollutions — and with different levels of ambition — they all set a binding, declining limit on allowable pollution from covered sources and then use a price on carbon to drive reductions in compliance with the limit swiftly and cost-effectively, catalyzing reductions where the cost is lowest first. This price on carbon also means that each participating state can raise substantial revenue that they can invest back into local communities.

2. Equity must be a core principle of cap-and-invest policy

Cap-and-invest programs can and should be designed to deliver on equity goals and allow communities to guide those decisions.

Designing the program to achieve concurrent reductions in locally harmful air pollution alongside limiting greenhouse gas pollution offers a key way to address equity within the same policy framework. Washington state’s Climate Commitment Act presents a new gold standard for climate policy because it not only spurs deep reductions in climate pollution, it also offers new innovative tools for driving down local air pollution. 

“One of the things we did very differently was environmental justice,” said Washington State Senator Reuven Carlyle. “We embedded an understanding of criteria pollutants at the community level, so we’re not just measuring greenhouse gas emissions.” Under the new program, Washington’s Department of Ecology must identify communities with high cumulative pollution burdens, work with those communities to deploy air pollution monitors and conduct a review to determine levels of criteria pollutants in those communities. Facilities that are found to be contributing to local pollution burdens will face stricter standards or limits.

The investments enabled by proceeds also provide a significant opportunity to promote equity.

Since the program began in 2009, RGGI states have generated $3.2 billion in allowance auction proceeds that have been invested in back into local communities. The majority of those proceeds have been invested in energy efficiency programs that reduce consumers’ bills and reduce demand for power – programs that can be particularly beneficial for low-income households that spend a disproportionate amount of their income on energy bills. In 2018 alone, RGGI investments saved households and businesses an estimated $2 billion in lifetime energy bill costs.

3. State-led climate action is still essential for meeting U.S. goals

Even though the U.S. is now back in the Paris Agreement under the leadership of President Biden, state-led action to slash emissions remains vital to meeting our shared climate challenge.

In fact, if every state that has committed to achieving reductions consistent with the Paris Agreement put in place a policy framework capable of cutting emissions roughly 50% below 2005 by 2030, the U.S. could close the gap to our NDC by nearly 40%.”  In particular, states that have forged ahead with cap-and-invest programs are in a position to drive down emissions immediately and offer models for other state and federal leaders to follow.

“Many of us didn’t hold back on trying to achieve our ambitious climate goals and objectives,” said California Assembly Member Eduardo Garcia, referring to when the anti-climate Trump administration took office. “I think we need to continue to think along those lines.”

Certainly, now is not the time for states to delay turning pledges to policy. The latest IPCC report was a ‘code red for humanity,’ revealing how global action is failing to keep pace with the accelerating climate crisis. And analyses show it will take serious work across the federal government, states, cities and businesses to align with the science and achieve the U.S. goal to slash economy-wide emissions in half by the end of the decade.

States must move beyond commitments to meet this urgent moment, or as Senator Euer put it, “The initiatives and laws we pass on the state level are how we’re actually going to reach our goals… This needs to be more than words.”

4. States should keep their eyes on cap-and-invest policies for best practices

While no panelist said their program is perfect, they did express just how valuable it is for states to serve as policy ‘laboratories’ and actively collaborate to share lessons learned. Case in point: Washington state had the benefit of going second behind California which set the nation’s first economy-wide limit on emissions. By talking to California officials and tracking their neighbor’s progress, Washington lawmakers could sharpen their own approach for their unique local circumstances.

As Senator Carlyle noted, the Climate Commitment Act’s (CCA) air pollution tools and use of carbon offsets build on California’s approach. For example, in the CCA, the use of offsets — a credit for activities that reduce greenhouse gas emissions outside of capped sectors — is even more constrained, thereby ensuring offsets do not potentially compromise swift, immediate reductions from the sources covered by the cap.

And for California, Assembly Member Garcia said that he would have his eye on Washington state to see how their finalized rulemaking in 2022 may offer inspiration for California’s 2030 Scoping Plan.

These valuable insights should not only be shared with states already paving the way with cap-and-invest programs, they should push other states to plan for bold policies next year. Several states like Oregon, New Mexico, Nevada and Colorado have pledged to reduce climate pollution but currently do not have policy frameworks in place to achieve them. In fact, both New Mexico and Nevada have highlighted cap-and-invest as strong policy options in their official state climate reports – now is the time to move these recommendations forward.

With impacts bearing down across the country — from deadly wildfires to more severe and frequent storms — constituents are growing more and more aware that climate commitments are not the finish line; it’s concrete action that counts.

Senator Carlyle summarized it aptly, “The handful of state legislators who are here are playing an outsized role in telling the story because this type of action is what people are hungry for.”

Next year, we need even more state legislators and governors to tell us how they’re delivering the climate action their voters are demanding.

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