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Maryland passes sweeping climate bill, Wisconsin releases first Clean Energy plan
The state of Maryland and state of Wisconsin have taken major steps forward in their respective strategies to reduce emissions and transition to a clean energy economy.
Maryland passed the Climate Solutions Now Act, aimed at reducing statewide greenhouse gas (GHG) emissions by 60 percent from 2006 levels by 2030, while Wisconsin released a Clean Energy Plan outlining steps to reach 100% carbon-free electricity by 2050.
Maryland’s Climate Solution Now Act of 2022
The Maryland Climate Solutions Now Act of 2022 was enacted on April 8 and will go into effect on June 1, 2022. The law sets new statewide goals and standards for emissions and other priorities, as well as setting timelines for the development of multiple plans in order to achieve these goals.
The Climate Solutions Now Act addresses emissions and other targets through five main actions/goals:
- Achieve net-zero GHG emissions statewide by 2045, with an interim target of 60 percent reduction by 2030
- Create new energy conservation requirements for buildings
- Increase/extend energy efficiency and conservation program requirements
- Establish requirement for state fleet to purchase zero-emission vehicles (ZEV)
- Establish new entities and new special funds to support initiatives
While there is currently no plan in place outlining the steps needed to reach the emissions targets, the act directs the Maryland Department of the Environment (MDE) to submit a plan to reach the interim GHG reduction target before the end of 2023, and a second, final plan before the end of 2030 on how to reach net-zero emissions by 2050.
To ensure climate and environmental justice is considered throughout implementation, MDE is required to work with the Commission on Environmental Justice and Sustainable Communities (CEJSC) to identify communities that are disproportionately affected by climate change and develop strategies to address any discrepancies. This bill also creates the Maryland Climate Justice Corps Program, meant to “employ young people to work on clean energy and/or climate mitigations projects.”
Key takeaway for corporate energy buyers with sustainability goals:
As mentioned above, a plan detailing how emissions reductions will be achieved has not yet been developed, so many of the policies that will impact corporate buyers have yet to be determined. As the details of the planning process are finalized, corporate buyers may be presented with opportunities to participate in working groups or surveys to provide input on policy impacts. While this opportunity has not been confirmed, it has not been uncommon during other state or local government plan development processes.
The current law does outline new GHG emissions reduction requirements for commercial buildings over 35,000 square feet, for both new construction and existing spaces. Maryland will adopt the 2018 International Green Construction Code and be required to adopt new versions of the code as they are issued. Complying with these requirements will result in a reduction in Scope 1 and Scope 2 emissions for businesses that own or lease space in buildings of this size.
MDE will be required to develop standards for existing buildings to achieve 20% GHG emissions reduction by 2030 and to achieve net-zero direct emissions by 2040. This will be accompanied by a reporting requirement to go into effect in 2025 that will also include additional policies such as alternative compliance pathways and financial incentives for building owners. Once the required reporting and compliance mechanisms are finalized by the state in the near-term, impacted businesses can prioritize GHG reduction efforts, assess capital improvements required to adhere to the new standards, drive towards greater operational efficiency and, importantly, avoid costly penalties for non-compliance.
Wisconsin’s Clean Energy Plan
The Wisconsin Clean Energy Plan (CEP), released April 19, was developed by the Office of Sustainability and Clean energy after being directed by Gov. Evers’ executive order in 2019. The CEP outlines strategies that put Wisconsin on a path to 100% carbon-free electricity consumption by 2050–a goal that is also tied to the 2019 executive order.
The CEP’s focus on the transition to clean energy technologies is driven by the need to address the impacts of climate change, but also focuses on increasing electricity generation within state lines to become more energy independent. A recent study from the Center on Wisconsin Strategy shows that Wisconsin currently spends over $14 billion per year importing fossil fuels from out of state, losing the full economic impact of those dollars if energy would be generated from in-state resources. Wisconsin currently relies on fossil fuels for over 75% of electricity generation, as shown in Figure 1 below:
Figure 1. Wisconsin Net Electricity by Source
The CEP identifies four key strategies required to complete the transition:
- Accelerate clean energy technology deployment
- Maximize energy efficiency
- Modernize buildings and industry
- Innovate transportation.
Under each key strategy, the CEP outlines high-impact, immediate action, and long-term strategies. Each of these specific policies or actions tie back to three common threads:
- Prioritizing health equity, environmental justice, and equitable economic development
- Fast-tracking workforce development and a just transition
- Accelerating government-led efforts (lead by example)
Key takeaway for corporate energy buyers with sustainability goals:
Unlike Maryland, the CEP does not come with any immediate action from Wisconsin state lawmakers. While the CEP represents a great step forward for climate policy in Wisconsin, it will require action from outside the Evers’ Administration and state government to accomplish. Many of the specific strategies would require action by the state legislature, Public Service Commission, and utilities.
Regardless, the plan does show the path forward to clean energy in Wisconsin, which aligns with goals that many utilities have already set. The state’s largest investor-owned utilities or their parent companies, including We Energies, Xcel Energy, Madison Gas & Electric, and Alliant Energy, have all set a goal of net-zero electricity generation by 2050. Three of four of these utilities have an interim goal of 80% emission reduction by 2030.
As these utilities work towards their goals, it will likely spur more in-state clean energy opportunities for corporate buyers. If the CEP can assist with and accelerate the clean energy transition–even with limited legislature support–it will benefit corporate buyers as they look to reach their own sustainability goals.
Stay tuned for the next installment of our Pulse on Policy series!
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