The Nickel Report

On January 28, 2021, and for the second time in a month, the Massachusetts Legislature passed historic legislation designed to holistically address issues associated with the effects from climate change.  Governor Baker has 10 days to sign it, veto it, or return it to the General Court with recommended amendments.

Once again, however, it seems that despite their shared policy interests around the need to achieve net-zero emissions by 2050, there still are concerns and issues with the legislation for the Baker Administration.  Despite the overwhelming support from both Chambers of the Massachusetts Legislature, the legislation came and went unsigned by the Governor when it initially passed both the House and Senate on January 4, 2021. Whether due in larger part to the last minute nature of the legislation (initially voted on by the House in the waning days of the legislative session, preventing meaningful offers of amendments from the Governor), or more attributable to substantive objections and concerns raised by the Governor and other stakeholders detailed in the Governor’s letter on the veto, the delay and initial “pocket veto” of the legislation evidences again the difficulty in aligning the various governmental entities charged with implementing and governing the climate change goals and policies of the Commonwealth.

1. The Decarbonization Roadmap and Clean Energy and Climate Plan Update

As discussed in an earlier posting, a number of administrative initiatives to address and facilitate efforts to combat climate change concerns were recently released, including the planned steps to achieve the goals of the Commonwealth’s climate change-focused policies.  On December 31, 2020, the Massachusetts Executive Office for Energy and Environmental Affairs (“EOEEA”) released its Decarbonization Roadmap to 2050 (the “Roadmap”). The Roadmap constitutes the plan of the Commonwealth to identify cost-effective and equitable pathways and strategies for Massachusetts to reach Net Zero greenhouse gas (“GHG”) emissions by 2050, and the priorities to achieve an on-pace interim goal by 2030. The Roadmap outlines eight potential pathways to Net Zero GHG emissions, including an analysis of potential energy resources, projected energy demand, and the energy supply necessary to meet the demand in all sectors of the economy, while meeting the 2050 GHG emissions limit established by the Commonwealth in April 2020. The Roadmap includes a summary report and six technical appendices, each detailing analysis and conclusions for specific sectors and associated impacts, including: (1) Energy Supply Sector; (2) Transportation Sector; (3) Buildings Sector; (4) Land Use Sector; (5) Non-energy Sector; and (6) Economic and Health Impacts.

Concurrent with the release of the Roadmap, the Commonwealth issued its 2030 update to the Clean Energy and Climate Plan (“CECP”), which is mandated to receive updates every five years under the Global Warming Solutions Act (“GWSA”).  Building on the 2050 Roadmap and the Commonwealth’s previous GWSA implementation plans, the 2030 CECP details the Administration’s plan for continuing to equitably and cost-effectively reduce GHG emissions through 2030. Specifically, it describes a strategy to achieve 2030 statewide GHG emissions that are 45% below the 1990 level while maximizing the ability of the Commonwealth to achieve Net Zero GHG emissions in 2050. Public comments on the 2030 CECP will be accepted through February 2021, and the Administration plans to publish a finalized 2030 CECP in March 2021.

Despite these substantial progressions, however, the Massachusetts Legislature passed its historic legislation with an eye to go further than the regulatory goals and planned implementation of Governor Baker’s Administration.

2. An Act Creating a Next Generation Roadmap for Massachusetts Climate Policy

A. The Governor’s Veto

On January 28, 2021, the House and Senate passed Senate Bill Number Nine titled “An Act Creating a Next Generation Roadmap for Massachusetts Climate Policy” which comprised a carbon copy of the climate change bill that the Legislature passed on January 4^th and that Governor previously vetoed. The legislation was designed not only to move Massachusetts toward net-zero carbon emissions by 2050, but also to establish interim goals and other requirements.  Although the Governor supports the 2050 net-zero goal, the Governor said in his veto letter that he differs with the Legislature on how these goals should be achieved.  As stated in the letter,

[c]ritically, the proposed legislation relies on certain out-of-date policies to reduce emissions and does not use exhaustive scientific data and analysis compiled by the [Baker] Administration over the course of two years, as required by the Legislature under the Global Warming Solutions Act of 2008 (GWSA), to support its conclusions.  Furthermore, the bill does not acknowledge the essential issues like climate change adaption and resiliency, the urgent need to develop affordable housing, and ensuring a cost-effective and equitable transition to a clean energy future.

The letter cautions and goes to great lengths to describe the matters that the Commonwealth faces with respect to a drastic shortage of affordable housing, and the concerns that have been raised over the Legislature’s proposal for a “net zero energy stretch code, which could slow the development of new housing while raising costs for Massachusetts families.”  The Governor also drew significant issue with the legislation’s interim emissions limits, which included new sub-limits for particular sectors of the economy, and mandates that a limit for 2030 be at least 50 percent below 1990 levels.  As included in the Roadmap and CECP, the Baker Administration proposes a 45% reduction by 2030.  In the Governor’s letter, and in comments echoed by Secretary of EOEEA, the additional 5 percent reduction means “significantly more cost – an additional $6 billion in costs incurred by residents – and associated impacts for the state economy.”  To achieve a 45 percent reduction, the state would have to reduce emissions by 19 million metric tons. To go to 50 percent, an additional 4.7 million metric tons would have to be cut, according to comments on the legislation. The Governor also said he worried other sections of the bill would stall housing construction and interfere with multi-state talks about how to procure clean energy resources regionally.

B. Key Provisions

The new climate legislation includes provisions that significantly impact the processes and oversight of numerous administrative agencies within the Commonwealth, with a significant focus on the agencies charged with the oversight and regulation of energy and environmental matters, including EOEEA, the Massachusetts Clean Energy Center, the Department of Public Utilities (“DPU”); and the Department of Energy Resources. In so doing, the new climate legislation suffers from the same aforementioned sticking points between the Administration and the Legislature regarding the GWSA and “net zero energy stretch code,” but also continues to touch upon just about every avenue of the Commonwealth’s energy economy, including: (1) energy efficiency, such as how the DPU analyzes energy efficiency and other regulatory determinations, as well as separate amendments to the Massachusetts Appliance Efficiency Standards Act; (2) the Commonwealth’s renewable portfolio standard; (3) an increase in the solicitation targets for offshore wind, including  a renewed possibility to separately solicit for coordinated transmission; (4) various clarifications sought by the solar industry; and (5) a nod toward shifting natural gas distribution company efforts toward utility scale renewable thermal projects, at least on a pilot scale.  Finally, the new climate legislation also introduces certain changes to the Massachusetts Environmental Policy Act, which include sweeping amendments to account for environmental justice populations and principles.

Taken together, the Baker Administration’s regulatory actions and the recent climate legislation mark an unprecedented turning point in the Commonwealth’s direction towards a low-carbon future. Given these actions, the Commonwealth is poised to lead the nation in its programs designed to combat and mitigate the effects of climate change.  It will be interesting to see if and where the Administration and Legislature ultimately find common ground to achieve the shared goal of carbon neutrality.