ASSOCIATION OF WASHINGTON BUSINESS, INDUSTRIAL CUSTOMERS OF NORTHWEST UTILITIES, NORTHWEST FOOD PROCESSORS ASSOCIATION, NORTHWEST INDUSTRIAL GAS USERS, NORTHWEST PULP AND PAPER ASSOCIATION, WASHINGTON TRUCKING ASSOCIATIONS, WASHINGTON FARM BUREAU, and WESTERN STATES PETROLEUM ASSOCIATION, Respondent,
WASHINGTON STATE DEPARTMENT OF ECOLOGY, Appellant, and WASHINGTON ENVIRONMENTAL COUNCIL, CLIMATE SOLUTIONS, and NATURAL RESOURCES DEFENSE COUNCIL, Appellant-Intervenors. AVISTA CORPORATION, CASCADE NATURAL GAS CORPORATION, NORTHWEST NATURAL GAS COMPANY, and PUGET SOUND ENERGY, INC., Respondents,
WASHINGTON STATE DEPARTMENT OF ECOLOGY, Appellant.
case concerns a novel rule promulgated by the Department of
Ecology to address the undeniable crisis of climate change.
The issue is not whether man-made climate change is real-it
is. See generally Intergovernmental Panel on Climate
Change, Global Warming of 1.5° C (2019)
[https://perma.cc/W2LS-DJQL]. Nor is the issue whether
dramatic steps are needed to curb the worst effects of
climate change-they are. Id. Instead, this case asks
whether the Washington Clean Air Act (Act), ch. 70.94 RCW,
grants Ecology the broad authority to establish and enforce
greenhouse gas emission standards for businesses and
utilities that do not directly emit greenhouse gases, but
whose products ultimately do. Ecology claimed and exercised
such authority in promulgating the challenged clean air rule
(Rule), ch. 173-442 WAC.
we hold that by its plain language and structure, the Act
limits the applicability of emission standards to actual
emitters. Ecology's attempt to expand the scope of
emission standards to regulate nonemitters therefore exceeds
the regulatory authority granted by the legislature. We
invalidate the Rule to the extent it exceeds Ecology's
regulatory authority, while recognizing that Ecology may
continue to enforce the Rule in its authorized applications
to actual emitters. Accordingly, we affirm in part and
reverse in part the trial court's decision and remand for
further proceedings consistent with this opinion.
AND PROCEDURAL HISTORY
Legislature's Efforts To Reduce Air Pollution and Curb
Greenhouse Gas Emissions
legislature created the Act in 1967. Laws of 1967, ch. 238.
Recognizing air pollution as "the most serious
environmental threat in Washington state," the
legislature significantly revised the Act in 1991 to better
"preserve, protect, and enhance the air quality for
current and future generations." LAWS OF 1991, ch. 199,
§§ 101, 102; RCW 70.94.011. The legislature
continued to revise and expand Washington's efforts to
combat air pollution, recognizing increasing evidence of
humanity's role in climate change.
2008, the legislature took its first direct step to combat
climate change by enacting chapter 70.235 RCW, "Limiting
Greenhouse Gas Emissions." That chapter established a
timeline for specific emission reduction targets and directed
Ecology to "submit a greenhouse gas reduction plan for
review and approval to the legislature" by December
2008. RCW 70.235.020(1)(b). That same subsection encouraged
Ecology to take swift action to address climate change,
allowing "[a]ctions taken using existing statutory
authority [to] proceed prior to approval of the greenhouse
gas reduction plan." Id.
years following this enactment, the legislature's
progress in addressing climate change stalled. In 2009 and
2015, the legislature declined to pass two major bills
designed to further regulate and reduce greenhouse gas
emissions. See H.B. 1819, 61st Leg., Reg. Sess.
(Wash. 2009); S.B. 5735, 61st Leg., Reg. Sess. (Wash. 2009);
H.B. 1314, 64th Leg, Reg. Sess. (Wash. 2015); S.B. 5283, 64th
Leg., Reg. Sess. (Wash. 2015). After the 2015 bill failed,
Governor Jay Inslee directed Ecology to reexamine its
existing statutory authority to curb greenhouse gas emissions
by setting emission standards. In response, Ecology
promulgated the Rule challenged here.
Clean Air Rule
on Ecology's authority under the Act, the Rule creates
greenhouse gas emission standards for three types of
businesses: (1) "[c]ertain stationary sources," (2)
"[p]etroleum product producers and importers," and
(3) "[n]atural gas distributors." WAC 173-442-010,
-020(1)(k). The Rule requires most of these businesses to
reduce their greenhouse gas emissions by 1.7 percent every
year, using their emissions in 2017 as a baseline. WAC
Rule gives covered businesses two nonexclusive options for
reducing their greenhouse gas emissions. First, and most
obviously, businesses can modify operations at their
facilities to lower their actual emissions. WAC
173-442-200(4)(a). Second, covered businesses can acquire and
submit "emission reduction units," which are
accounting units representing the reduction of one metric ton
of carbon dioxide or its equivalent. WAC 173-442-020(1)(n),
-200(4)(b). Covered businesses can obtain emission reduction
units in three ways: (1) by reducing their actual greenhouse
gas emissions below the reduction requirement for a given
compliance period, (2) by undertaking recognized projects,
programs, or activities that reduce emissions in real,
specific, quantifiable, permanent, and verifiable ways, or
(3) by purchasing emission reduction units in greenhouse gas
emission markets outside of Washington. WAC 173-442-110. Once
a business has obtained emission reduction units, it can
either bank those units to save them for a later compliance
period or exchange those units with other covered entities.
WAC 173-442-130(1), -140.
projects that the Rule will reduce emissions by 20 million
metric tons of carbon dioxide or its equivalent by 2035, or
about two-thirds of the target established by the legislature
in its 2008 enactment of chapter 70.235 RCW. As promulgated,
the Rule covers approximately 68 percent of all the
greenhouse gas emissions in Washington. Of those emissions
covered by the Rule, approximately 74 percent are generated
by the combustion of products sold by natural gas
distributors and petroleum product producers and importers.
Because these covered businesses sell products but "do
not control the amount of fuel or gas burned," Ecology
acknowledges these businesses "cannot make direct
emissions reductions." Dep't of Ecology, Pub. No.
16-02-014, Concise Explanatory Statement: Chapter 173-442
WAC, Clean Air Rule; Chapter 173-441 WAC, Reporting of
Emissions of Greenhouse Gases 273 (2016),
[https://perma.cc/SA7Z-LFCA]. The emission reduction unit
program therefore provides the sole mechanism through which
natural gas distributors and petroleum product producers and
importers can address the emissions generated by the products
they sell. In other words, the Rule requires these businesses
to pay to offset the emissions caused by third parties using
after the Rule was promulgated in 2016, the Association of
Washington Business joined with seven other industry trade
organizations (collectively AWB) and filed a petition for
review of the Rule under the Washington Administrative
Procedure Act (WAPA), ch. 34.05 RCW. Among other things, AWB
argued Ecology lacked statutory authority under the Act to
promulgate the Rule. Four utility companies that distribute
natural gas throughout Washington also filed a petition for
review. The two petitions were consolidated into a single
challenge to the Rule. The trial court allowed the Washington
Environmental Council and two other environmental
organizations (collectively WEC) to intervene in defense of
2017, the trial court ruled that Ecology's
"authority under [the Act] is limited to entities who
introduce contaminants into the air, not entities who sell
commodities." Clerk's Papers (CP) 756. In its
subsequent written order, the trial court held that the Rule
was invalid under the WAPA because "the Clean Air Rule
exceeds the statutory authority of the agency conferred by
law." Id. at 801 (Conclusion of Law 12).
Without discussion, the trial court denied Ecology's
request to sever the portions of the Rule that were held
invalid. Id. at 787-88.
and WEC promptly filed notices of direct review with this
court under RAP 4.2(a)(4). We granted review. We also granted
the motion of the Puget Sound Clean Air Agency to file an
Under the Act, may "emission standards" apply to
businesses that do not directly emit greenhouse gases, but
whose products ultimately do?
the Rule a valid exercise of Ecology's statutory
the Rule be severed to strike only its invalid portions and
allow those portions that apply to actual emitters to remain
review this challenge to the validity of Ecology's Rule
de novo under the WAPA. Wash. Pub. Ports Ass'n v.
Dep't of Revenue, 148 Wn.2d 637, 645, 62 P.3d 462
(2003); Tapper v. Emp't Sec. Dep't, 122
Wn.2d 397, 402, 858 P.2d 494 (1993) ("In reviewing
administrative action, this court sits in the same position
as the superior court, applying the standards of the WAPA
directly to the record before the agency."). We will
"declare the rule invalid only if... the rule exceeds
the statutory authority of the agency." RCW
34.05.570(2)(c). "Administrative '[r]ules must be
written within the framework and policy of the applicable
statutes,' and so long as the rule is 'reasonably
consistent with the controlling statute[s],' an agency
does not exceed its statutory authority." Swinomish
Indian Tribal Cmty. v. Dep 't of Ecology, 178 Wn, 2d
571, 580, 311 P.3d 6 (2013) (alterations in original)
(citation omitted) (quoting Dep't of Labor &
Indus, v. Gongyin, 154 Wn.2d 38, 50, 109 P.3d 816
(2005); Wash. Pub. Ports Ass'n, 148 Wn.2d at
646). But "'[administrative rules or regulations
cannot amend or change legislative enactments.'"
Dep't of Ecology v. Campbell & Gwinn, LLC,
146 Wn.2d 1, 19, 43 P.3d 4 (2002) (quoting Dep't of
Ecology v. Theodoratus, 135 Wn.2d 582, 600, 957 P.2d
1241 (1998)). "[R]ules that are inconsistent with the
statutes they implement are invalid." Bostain v.
Food Express, Inc., 159 Wn.2d 700, 715, 153 P.3d 846
(2007). And while "'we generally accord substantial
deference to agency decisions, we do not defer to an agency
the power to determine the scope of its own
authority.'" Lenander v. Dep't of Ret.
Sys., 186 Wn.2d 393, 409, 377 P.3d 199 (2016) (quoting
In re Registration of Elec. Lightwave, Inc., 123
Wn.2d 530, 540, 869 P.2d 1045 (1994)).
heart of this case is whether the plain meaning of the Act
empowers Ecology to use emission standards to regulate
businesses that do not emit greenhouse gases. Statutory
interpretation presents a question of law we review de novo.
Campbell & Gwinn, LLC, 146 Wn.2d at 9. Our
fundamental objective is to determine and carry out the
legislature's intent. Id. When "the
statute's meaning is plain on its face, [we] must give
effect to that plain meaning." Id. To determine
plain meaning, we consider "all that the Legislature has
said in the statute and related statutes which disclose
legislative intent about the provision in question."
Id. at 11. We also look to "the context of the
statute in which that ...