New Model Laws from the LPDD Team
Since the last newsletter update, the LPDD team has published a new model state law requiring the appropriate state agency to conduct a renewable gas study. Since states will have different capacities for manufacturing or acquiring renewable gas, before adopting a renewable gas standard, the appropriate agency within a state should first undertake a study of the state’s ability to produce in the state or obtain outside the state renewable gas so as to determine the appropriate goals for a renewable gas standard. The LPDD team’s model legislation includes language directing the appropriate agency to conduct a study regarding the availability of renewable gas for use in the state by gas utility companies. The model legislation was prepared based on Hawaii’s proposed SB 2818 SD2 HD1, which, if passed, would “fund and require the public utilities commission to conduct a study regarding the availability, feasibility, and costs of the use of renewable gas in Hawaii by gas utility companies.”
Highlighted New External Resources
LPDD.org is being continually updated with new, external legal resources. Below is a brief selection of recently added resources of special interest.
LPDD.org is being continually updated with new, external legal resources. Below is a brief selection of recently added resources of special interest.
Portland’s Proposed Carbon Tax. In November, Portland proposed a Healthy Climate Fee, which would establish a $25 per-ton fee on GHG emissions from facilities in Portland with emissions of 2,500 metric tons of CO2-e (carbon dioxide equivalents) per year or greater. This proposal, if passed, would be the first such municipal effort in the nation. Revenue generated through a Healthy Climate Fee would raise approximately $9 million per year to support projects, programs and policy development to meet the City’s decarbonization pathways and the actions in the City’s Climate Emergency Declaration and Climate Action Plan.
New Natural Gas Bans. Several new natural gas bans have been enacted or proposed over the last month. In California, Oakland’s Natural Gas Ban was passed unanimously, prohibiting natural gas infrastructure in newly constructed buildings. The measure will apply to all residential and commercial construction, though developers can apply for “technology feasibility” waivers. San Francisco also passed legislation banning natural gas in new buildings. There, new residential and commercial building construction will be required to utilize all-electric power starting in 2021. In Seattle, a proposed ban on natural gas heating in new construction is advancing through the energy code revision process. Seattle aims to ban the use of fossil fuels in new commercial and large multi-family construction for space and most water heating. The proposed Seattle Energy Code update eliminates all gas and most electric resistance space heating systems; eliminates gas water heating in large multifamily buildings and hotels; improves building exteriors to improve energy efficiency and comfort; and requires electrical infrastructure necessary for future conversion of any gas appliances in multifamily buildings. And in December, San Jose became the largest city in the US to ban gas infrastructure from nearly all new construction. San Jose officials expect the gas ban will reduce the city’s carbon pollution by more than 600,000 tons over the next five years. Lawmakers granted exceptions for hospitals, manufacturing plants, industrial facilities and energy storage companies.
New York’s Divestment from Fossil Fuels in the Common Retirement Fund: Last week, New York’s Comptroller announced that the state would adopt a goal to transition its $226 billion Common Retirement Fund portfolio to net zero greenhouse gas emissions by 2040. The first step of this process will require a review of investments in energy sector companies over the next four years. This move builds on a 2019 report from the Fund’s Decarbonization Advisory Panel, and a 2019 Climate Action Plan adopted by the Comptroller.
Arizona Carbon-Free 2050 Utility Target. Throughout 2020, the Arizona Corporation Commission developed plans for an update to the state’s Renewable Energy Standard that would require utilities to fully decarbonize their electricity supply by 2050. This process culminated in an Order handed down this November. The plan has interim requirements that utilities cut carbon emissions in half by 2032 and 75% by 2040. This commitment is notable in that Arizona has not otherwise passed sweeping climate or carbon legislation at the state level.
Pathway Highlight: Stranded Assets and Climate Disclosures. Efforts to spur climate-smart investment decisions often run through disclosure requirements acknowledging the risks that climate change poses. Our pathway here highlights efforts of interest from around the US, and even internationally, including the Climate Action 100+, an investor group that includes the California Public Employees Retirement System; various sources of climate disclosure guidance and standards; and a recent report, “Managing Climate Risk in the Financial System,” commissioned by the Commodity Future Trading Commission, on how the Biden Administration can mobilize different federal agencies to force banks, investment managers, and publicly traded companies to disclose and internalize climate risks.