Washington D.C. set a precedent with the Clean Energy Omnibus Amendment Act of 2018. The CEDC Act is one of the country’s most aggressive and impactful clean energy actions to date. Moreover, it establishes the District of Columbia as a global leader in the fight against climate change. The DC Carbon Tax Law fuels the District’s energy and climate action plan to reduce greenhouse gas emissions by half before 2032.
It was considered aggressive at the time. Now, numerous other communities are following suit. The CEDC Act promotes a wide range of initiatives that target building energy use, energy supply, and greenhouse gas emissions from automobiles. Workforce development, equity, and the promotion of Certified Business Enterprises (CBEs) have also been strengthened throughout the plan. The District government is making strong strides to work with its community, as well as private sector partners to implement the requirements of the DC Carbon Tax Law.
What is a Greenbank?
The Clean Energy D.C. Act of 2018 is intended to reduce the city’s emissions by 44% by 2032. It’s the strongest climate legislation thus far in the country. The legislation will put a minimal fee on carbon and use the revenue to fund a Greenbank. Unfamiliar with the term? A Greenbank is a publicly funded entity established specifically to facilitate private investment into domestic low carbon, climate resilient (LCR) infrastructure or other green sectors such as water and waste management.
The Washington DC carbon tax law-funded Greenbank is low-income bill assistance and job training program specifically for D.C. residents. The price of carbon will be approximately $7/ton and is not expected to increase. It will be imposed on both natural gas and fossil fuel-based electricity.
This legislation and the taxes paid will improve the quality of life for everyone in the DC community. From lower carbon emissions to low-income support. The impact of the DC Carbon Tax Law will be seen for generations to come.
The Breakdown: Summarizing the D.C. Carbon Tax Law
The DC Carbon Tax Law enacts a long list of ambitious provisions. It will require DC to source 100% clean, renewable electricity by 2032. Consequently, existing buildings will need to meet certain energy efficiency standards.
Likewise, it will put an additional tax on the purchase of gas-guzzling cars and in turn, use the funds to make electric vehicles more affordable. Furthermore, it will require the city to have 100% electric buses by 2030. Ultimately, it is changing the mission of the Public Service Commission in D.C. to prioritize addressing climate change.
100% Renewable Energy by 2032
The goal for DC is to utilize 100% renewable energy by 2032. The Act revises the district’s Renewable Energy Portfolio Standard (RPS), mandating 100% of the district’s energy supply comes from Tier 1 renewable energy sources by 2032. “Tier 1” renewable resources include solar (electric or thermal), wind, biomass, landfill gas, waste-water treatment gas, geothermal, ocean, as well as wastewater used as a heat source for heating or cooling systems.
The DC Carbon Tax Law also ensures that by 2041, at least 10% of that energy must come from solar energy generated within the District. It’s aggressive – in a good way. DC is leading by example on the path to carbon neutrality.
Buildings and Energy Efficiency
Currently, building energy use accounts for nearly 75 percent of the District’s greenhouse gas emissions. That’s immense. This legislation takes innovative action to target this issue.
The Building Energy Performance Standard (BEPS), implemented with the DC Carbon Tax Law, establishes a minimum energy performance for commercial and multifamily buildings. In other words, these large buildings will have to make significant changes in the near future. Buildings below the threshold will need to improve their energy performance by 20% over the 5-year compliance period. Otherwise, they may be fined.
New initiatives and policies
- Increase funding for programs that benefit low-income communities
- Establish workforce programs
- Expand utility energy efficiency
- Promote energy efficiency at municipal buildings through a Strategic Energy Management Plan.
Gas-fueled transportation is responsible for approximately a quarter of the District’s greenhouse gas emissions. The Washington DC Carbon Tax Act establishes three initiatives that will support the transition from traditional vehicles to electric vehicles.
- Vehicle Excise Tax: Calls for a revision in the vehicle excise tax formula to incentivize electric and more fuel-efficient vehicles over those less efficient. (Provisions will be provided to protect low- and middle-income residents.)
- Transportation Electrification Program: The Act requires that 100% of public buses, public fleets, as well as taxis and limousines are to be 50% zero emissions by 2030 and zero emission by 2045. It includes a stipulation to incentivize the expansion of electric vehicle charging infrastructure.
- Clean Vehicle Transition Plan: Necessitates the development of a strategy for:
- 25% of vehicles registered in DC be zero-emission by 2030
- 100% replacement of all public and school buses to electric by the end of their useful life
- Execute the Mayor’s Transportation Electrification Program
Sustainable Energy Infrastructure Building Program
The most helpful aspect of the DC Carbon Tax Law is its efforts to aid local businesses and residents in this transition. Title III calls for the creation of the Sustainable Energy Infrastructure Capacity Building and Pipeline Program to support the participation of certified business enterprises (CBEs) in the energy efficiency and renewable energy industries. This will allow collaboration among agencies to maintain a training and certification program for CBEs and CBE-eligible firms. Thus, increasing CBE’s capacity to embrace renewable energy, as well as energy efficiency construction, design, and maintenance.
Washington DC has made every effort to follow through with its commitment to the global goal of Carbon Zero by 2050. We can see that other cities are following suit. Carbon neutrality is a part of our future. It’s time to embrace a new way of existing.
Improve Building Energy Efficiency with NGS
To learn more about recent carbon emissions tax laws in Washington D.C. and what you can do to reduce carbon emissions from you buildings, register for our webinar, “What Carbon Taxes man for Commercial Buildings.”