Washington Business Fall 2016 | Washington Business | Page 38

business backgrounder | regulatory

An analysis by Utah-based Energy Strategies
presented to the Legislature last year by the
Washington Climate Collaborative, a coalition
of business and labor groups opposed to CAR,
affirmed the governor’s own Office of Financial
Management analysis of the regulations: Higher
fuel and energy prices immediately and, over time,
declining job opportunities in the high-paying
energy and manufacturing industries.

“The CAR’s direct and indirect impacts on Nucor will
result in increased production costs, the transfer of steel
production away from Nucor’s efficient Seattle facility
to out-of-state producers, and increased GHG emissions
through leakage.”
– Matt Lyons, vice president and general manager, Nucor Steel Seattle,
in a letter to the state Department of Ecology dated July 22, 2016

the result: washington carving a
path for world, or shipping jobs out of state?
Despite broad agreement that the actions of Washington state, a
relatively small player on the global emissions stage, don’t significantly
address the global bad actors, some believe action in our little piece
of the world can lead to a national, and possible international, policy
to lower carbon emissions.
Vlad Gutman, director of environmental advocacy group Climate
Solutions, made the argument in an interview earlier this year, saying
he believes a national policy on carbon emissions is necessary, and
that “we should not forget” that the emergence of state-by-state rules
will increase pressure for a uniform, national approach.
It’s an optimistic speculation by Gutman, and yet the question
remains: What are the state’s economic and global environmental
consequences of going solo in the hope that others follow?
Nucor Steel Seattle, one of the greenest steel mills in the world,
would face great economic exposure. The company wrote in their
comments to DOE, “The CAR’s direct and indirect impacts on
Nucor will result in increased production costs, the transfer of steel
production away from Nucor’s efficient Seattle facility to out-of-state
producers, and increased GHG emissions through leakage.”
“Leakage,” in this instance, refers to jobs and production operations
moving to other states or countries to remain competitive.
Ash Grove Cement, the 134-year-old cement producer — the only
cement producing facility in the state — is also considered EITE and
shares Nucor’s concern over leakage and job loss.

EPA Global Carbon Emissions Data
www3.epa.gov/climatechange/ghgemissions/global.html
AWB’s Grow Here Campaign
awb.org/growhere
Washington Climate Collaborative
washingtonclimatecollaborative.org
State Department of Ecology Clean Air Rule
ecy.wa.gov/climatechange/carbonlimit.htm

Jacqueline Clark, Ash Grove’s director of communications and
public affairs, said implementation of the rule would actually increase
carbon emissions and put good-paying jobs at risk.
“The increased cost of energy under CAR would force Ash Grove, an
EPA Energy Star recipient no less, to raise prices. With international
competition, particularly overseas operations that have little or no
environmental regulations, carbon emissions would increase as
purchasers look to get their products at a lower price,” said Clark.
“This puts the company’s viability in Washington state in question.
Shuttering the Seattle operation — a real possibility — would force
companies to import cement products, increasing production and
transportation emissions.”
Closure of the Seattle plant, Clark said, amounts to $5 million in
payroll and 80 jobs, and hundreds of additional jobs in the community
based on the company’s multiplier effect.

what’s ahead: anyone’s guess
At AWB’s annual Legislative Day and Hill Climb in January, Gov.
Inslee acknowledged business leaders for their “great leadership” on
protecting the environment.
His comment contrasts sharply with his subsequent action,
directing his agency to move ahead with a carbon cap-and-tax
regulation that will harm these same employers, and jeopardize
innovation and investment in technologies that make their operations
and communities cleaner and greener.
“Aside from wh