Washington Supreme Court allows caps on direct but not indirect greenhouse gas emissions

OLYMPIA – A state agency didn’t have the legal authority to order Washington utilities and oil refineries to come up with ways to reduce the pollution their products eventually emit when used by other people.

Such “indirect emissions” from the use of gasoline and natural gas weren’t covered by the law passed by the Legislature in 2015, a majority of the court said Thursday.

“The issue is not whether man-made climate change is real – it is,” Chief Justice Debra Stephens said in the majority opinion signed by four other justices.

The issue was whether the Department of Ecology has the authority to expand its standards to cover indirect emissions as well as the source of direct emissions. The department said it did, but “Ecology is mistaken,” Stephens wrote.

“The Legislature has not empowered Ecology to do whatever Ecology deems best for the environment,” she wrote.

The department’s regulations designed to gradually reduce greenhouse gas over time were challenged by the Association of Washington Business and various industry groups representing food processors, truckers, farmers, pulp and paper manufacturers and the petroleum industry, as well as Avista and other utilities. Groups including the Washington Environmental Council and the Natural Resources Defense Council weighed in on the side of the department’s regulations.

Indirect emissions from natural gas and petroleum products account for half of all greenhouse gas emissions in Washington. They include the air pollution in the exhaust from cars and trucks, and from the use of natural gas in homes, small businesses and vehicles.

But the large businesses that distribute or sell those products do not control the amount of fuel or gas burned, and the department acknowledged they can’t make direct emissions reductions, the court majority said.

“The rule requires these businesses to pay to offset the emissions caused by third parties using their products,” Stephens wrote.

Gov. Jay Inslee said the majority’s opinion that climate change is real and action is needed should end any debate on those points. But he disagreed with the conclusion the department can’t regulate indirect emissions.

“This ruling will significantly affect our ability to reduce emissions,” he said, and it should add urgency to legislative efforts this year to fight climate change.

The ruling should “re-energize” his proposal for clean fuel standard that would gradually reduce the amount of pollutants in gasoline and diesel, Inslee said at a news conference shortly after the opinion was released. His staff is reviewing the court ruling for other possible action, and one option could be asking the Legislature to pass a law giving the department the authority to regulate indirect emissions, which the court said could have been spelled out in the law, but wasn’t.

Critics hailed the decision as striking down onerous rules on oil refiners and natural gas suppliers that would have led to higher prices for consumers.

“The Inslee administration overstepped its authority when it decided to force a ‘cap and trade’ program on the state of Washington without a vote of the Legislature,” Sen. Doug Ericksen, R-Ferndale, said. “This case was a classic example of government arrogance and overreach.”