California cap and trade
Unlike RGGI, which covers only the power sector, California’s cap-and-trade program covers virtually the entire state economy. It was the first multi-sector cap-and-trade program in North America. The greenhouse gas emissions cap set under the program will decrease about 3 percent annually to help the state achieve its legislated goal to reduce emissions to 1990 levels by 2020. After that, under a state law enacted in 2017, the cap will be further reduced to help achieve an additional 40 percent reduction in state emissions by 2030. The program is linked with similar programs in the Canadian province of Québec and (soon) Ontario.
Washington Clean Air Rule
Washington’s Clean Air Rule remains suspended as it works its way through the court system.
The rule, adopted by the Department of Ecology in 2016, is aimed at reducing emissions from significant in-state stationary sources, petroleum product distributors and importers, and natural gas distributors. Covered entities could also use tradable units from three eligible sources: reduction units generated by other covered parties who overachieve their target; specified offsets; or out-of-state emissions market program allowances. Starting in 2017, the program would have required covered entities to reduce their emissions 1.7% annually. The compliance threshold was to begin at 100,000 metric tons in the 2017–2019 period and decrease by 5,000 metric tons every three years, reaching 70,000 metric tons in 2035.
Several businesses sued after the rule was issued, arguing the agency exceeded its authority. In December 2017, a superior court ruled that the state lacks the authority to regulate indirect emitters (natural gas and petroleum suppliers) without legislative approval and suspended the rule. In May 2018, the Department of Ecology appealed to state’s Supreme Court to review the lower court ruling.