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Massachusetts Adopts Aggressive Greenhouse Gas Reduction and Green Job Creation Laws

Beveridge & Diamond, P.C. - Client Alert, August 15, 2008

Two significant new environmental bills addressing climate change were recently signed into law by Massachusetts Governor Deval Patrick, creating a package of mandates and incentives that some advocates are calling the most aggressive greenhouse gas control requirements in the country.

1.         The Global Warming Solutions Act

The Global Warming Solutions Act was proposed by State Senator Mark Pacheco and was adopted with overwhelming support in the state legislature, including sponsorship by House Speaker Salvatore DiMasi and a unanimous vote of support in the House of Representatives.

The Act, adopted in Chapter 298 of the Acts of 2008 and primarily contained in a new chapter 21N of the Massachusetts General Laws, entitled the Climate Protection and Green Economy Act, contains a framework for reducing greenhouse gas (GHG) emissions across the economy over a period of 40 years, ultimately mandating GHG reductions of 80 percent over 1990 emission levels. 

The Act mandates that the Executive Office of Energy and Environmental Affairs (EEA)  establish statewide GHG emission limits as follows: (a) GHG limits effective in 2020, which must be between 10 - 25 percent below statewide GHG emissions in 1990, (b) interim limits for 2030 and 2040, and (c) GHG limits effective in 2050, which must be at least 80 percent below statewide GHG emissions in 1990.

In establishing these statewide GHG emission limits, EEA must perform an evaluation of the total potential costs and benefits of various reduction measures to the economy, the environment and public health, and must produce every five years a plan for achieving the maximum technologically feasible reductions of statewide emissions.  EEA must also analyze the feasibility of measures to achieve the required reductions, which measures are required to include an undefined aggregate limit for electric generating facilities, direct reduction measures from other economic sectors, alternative compliance mechanisms such as market based mechanisms, and incentives that EEA believes are necessary or desirable.  EEA’s use of market based compliance mechanisms requires advance consultation with the Executive Office of Administration and Finance and the consideration of localized air emission impacts and prevention of increases of toxic or criteria air pollutants.  

To implement the program necessary to calculate and monitor GHG emissions reductions, the Act requires the Massachusetts Department of Environmental Protection (MassDEP) to determine what the baseline statewide emissions of GHGs were in 1990, and to establish a regional GHG registry and reporting system for GHG sources, which must include (i) annual reporting of GHG emissions by all Title V permit sources with GHG emissions and all other stationary sources with at least 5,000 tons of annual GHG emissions no later than April 15, 2009; (ii) a voluntary reporting program for GHG emissions to the regional registry; and (iii) reporting of GHG emissions from generation sources producing all electricity consumed in the Commonwealth, including transmission and distribution line losses.

The Act imposes stringent time limits on EEA to develop the many regulations that will be necessary to implement the GHG reduction program. Some of the regulations will be promulgated by EEA and others will be promulgated by MassDEP.

The Act also provides strong enforcement consequences for violations by establishing civil administrative penalty liability of up to $25,000 for each day of violation of any provision of the Act.

2.        The Green Jobs Act

The Governor also signed An Act Relative to Green Jobs in the Commonwealth, known as the “Green Jobs Act,” which is intended to support and develop a clean energy industry in Massachusetts and backed by $68 million in funding over five years.

Filed as House Bill 5018 by Speaker DiMasi, and passed unanimously in both the House and Senate, the Green Jobs Act creates the Massachusetts Clean Energy Technology Center within the EEA to administer a new Massachusetts Alternative and Clean Energy Investment Trust Fund.  This Trust Fund is authorized to invest in clean energy technology research and issue seed grants to companies, universities and nonprofits to encourage the creation of clean technology ventures and the training of workers to perform associated green jobs. 

The Trust Fund is specifically authorized to makes investments designed to:

(1) stimulate increased financing for the expansion of clean energy research and development facilities by leveraging private financing and providing related financing, including financing for construction and expansion;

(2) provide matching grants to state educational institutions to develop a curriculum relative to clean energy and clean energy technology;

(3) to make targeted investments in clean energy research and promote manufacturing activities for new and existing advanced clean energy technologies;

(4) to make matching grants to universities, companies and other institutions to encourage the federal government, industry and other grant sources to provide funding;

(5) to provide bridge financing in anticipation of such awards; and

(6) fund programs and investments that promote economic self-sufficiency for low and moderate income communities in the clean energy industry.

Investments by the Trust Fund will be governed by rules to be approved by the Board of Directors of the Massachusetts Clean Energy Technology Center.  The thirteen-member board will include representatives of government, educational institutions, and private industry, including an engineer or scientist, a CEO of a Massachusetts-based clean energy corporation, and a venture capitalist with expertise in clean energy technologies.

The Green Jobs Act also funds a study of the clean energy sector, which will examine future workforce needs of the sector, the current growth grate, levels of private investment, real property owned by the state available and suitable for the installation and operation of renewable energy facilities, energy efficiency opportunities on real property owned by the state, and the future funding requirements of the Massachusetts Clean Energy Technology Center.

It is anticipated that the Green Jobs Act will provide financial assistance and incentives to help spur the private sector innovations and investments necessary to achieve the GHG reductions mandated by the Global Warming Solutions Act.

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For additional information on either of these Acts, or for more information on the regulatory development process that will follow, please contact Stephen Richmond at srichmond@bdlaw.com or Krista Hawley at khawley@bdlaw.com.