By Aditi Dalal | Tue, July 12, 22
As heat waves scorch the Midwest and Southeast U.S., reminding the nation of an ever-prevailing change in climate, Maryland has set one of the most ambitious climate targets in the U.S.
The Climate Solutions Now Act of 2022 (“Act”), signed into law by Governor Hogan, requires the state to reduce its greenhouse gas emissions by 60 percent by 2031 from 2006 levels and to achieve net-zero GHG emissions by 2045. This is an aggressive upgrade from the previous goals of a 40 percent reduction by 2030. Ahead of the game, let’s take a look at how Maryland plans on achieving these goals through electrifying buildings, tackling environmental justice issues, identifying funding, and transitioning the workforce.
Electrification of Buildings
The act requires large commercial and residential buildings with a size of 35,000 square feet or more to reduce their emissions by 20 percent by 2030 and become net zero by 2040 (with exceptions for historical, elementary and middle school, and agricultural buildings). It sets buildings in the state on the path to achieve this goal by establishing a building energy performance standard, creating a Building Energy Transition Task Force, and increasing targets for state energy efficiency programs,
To kick this off, the Department of the Environment will implement building energy performance standards by June 2023. In the meantime, electric and gas utilities must provide energy data to the owners of these buildings who are mandated to report direct emissions data to the Department annually starting in 2025. Any emissions higher than the allowable limit will incur fees equal to or higher than the social cost of carbon, paid by owners. In addition, this rule provides the opportunity for municipalities to set stricter building energy performance standards; as it creates a statewide “floor”, a minimum standard throughout the state.
To aid in the process of reducing buildings emissions, the act creates a Building Energy Transition Implementation Task Force, responsible for studying and recommending complementary programs, policies, and incentives such as tax credits and subsidy payments to reduce GHG emissions in the buildings sector. The task force must recommend incentives for electrification projects and develop a plan for funding building retrofits so buildings can comply with building emissions standards.
Lastly, the task force has the power to use EmPOWER, a set of programs designed to offer energy savings to Marylanders, to create financial incentives for the transition to electrified buildings for low-income households and offer low-interest financing for retrofits. The act also mandates public utilities to provide energy efficiency and conservation programs that result in increased annual incremental gross energy savings of up to 2.5 percent for 2027 and beyond. Starting in 2025, the core objective of these programs will expand to include greenhouse gas emissions reductions, energy savings, net customer benefits, and reaching underserved communities.
Tackling Environmental Justice
Past laws, actions, and precedents have left certain communities to bear the negative impacts of climate change more than others. This has created barriers for individuals to benefit from the energy transition in an equitable way. The Climate Solutions Now Act seeks to combat the inequity by establishing an Environmental Justice and Sustainable Communities Commission tasked with identifying disproportionately impacted communities and assessing the adequacy of current state and local laws to address environmental justice and sustainability. Assessing the policies and actions of the past not only helps in identifying gaps for these communities, but can also help create better access through future laws and programs.
The act also requires environmental restoration projects and energy efficiency projects to be targeted for highly impacted communities and creates definitions of “overburdened” and “underserved communities”:
- An overburdened community is disproportionately harmed by pollution, and has three environmental health indicators as listed in the legislation.
- An underserved community has a large proportion of nonwhite or lower-income residents with limited English proficiency.
Identifying and defining overburdened and underserved communities creates a basis for designing programs with equity in mind. It helps program implementers serve the communities that have often been marginalized in the past.
Funding the Clean Energy Transition
Funding is an essential piece of the puzzle when it comes to accelerating the clean energy transition and creating equity-focused programs. The Act creates the Green Bank Climate Catalytic Capital Fund in Maryland Clean Energy Center. This bank will serve as a link between investors wanting to address climate change and overburdened or underserved communities who need funding for projects like weatherization and electrification. As an assurance that those who most need the funding will have access to it, the Act directs 40 percent of the funding to communities with low- or moderate-income households. Whereas often times these communities lack the funds to make improvements for energy efficiency and building retrofits, this bank would serve as a resource for these essential projects.
Investing in a Clean Energy Workforce
As investments in the green economy increase, those who are currently working with fossil fuels may be dislocated. The act creates and requires The Just Transition Employment and Retraining Working Group to identify resources like healthcare, retirement, and other benefits for dislocated workers. The group is also tasked with finding opportunities for workforce training in areas related to energy efficiency and renewable energy, especially for those who are underrepresented in the green workforce, like people of color, formerly incarcerated individuals, and women. Additionally, it requires utilities to ensure that their programs for electrification and other cost-saving initiatives offer employment benefits to their employees, protecting the workers that are on the frontline of the energy transition.
Maryland’s Climate Solutions Now Act of 2022 sets goals and actions that are one of the most ambitious in the nation with a 60 percent reduction in GHG emissions by 2031 and net-zero by 2045. It leads the way in adapting for and mitigating climate change as it focuses on improvements on building energy performance standards, equity, and green funds.