The 2008 Massachusetts Global Warming Solutions Act (GWSA) set ambitious goals for reducing greenhouse gas (GHG) emissions and mitigating the potential risks posed by climate change.  77(EO 569).  The implications of EO 569 are far-reaching and substantial for companies operating in the Commonwealth.

EO 569 specifies a number of concrete actions to further reduce GHG emissions and respond to climate change in Massachusetts:

Additional Interim GHG Reduction Targets.  Under the GWSA, state-wide GHG reduction targets were previously set for 2020 (25% below the 1990 baseline) and 2050 (80% below the 1990 baseline).  EO 569 requires that additional interim reduction goals be created for 2030 (to be set before December 31, 2020) and 2040 (to be set before December 31, 2030).

1. Reduced GHG Emissions from the Transportation Sector.  The Massachusetts Department of Transportation will develop regional strategies to reduce GHG emissions from the transportation section consistent with the emission reduction goals established under the GWSA.

2. Comprehensive Energy Plan.  EO 569 calls for a comprehensive state-wide energy plan, with particular emphasis on conservation, energy efficiency and other demand-reduction approaches to reduce energy consumption.  This plan must be created within two years and updated every five years thereafter.  In addition, the EO identifies the need for continued “reform of the regional wholesale electricity energy and capacity markets” to ensure that clean energy mandates are achieved in the “most cost-effective manner.”

3. Climate Adaptation Plan.  The Energy and Environmental Affairs and Public Safety Secretariats are tasked with preparing a state Climate Adaptation Plan. This plan will provide information on climate trends and extreme weather impacts, guide state agencies and municipalities on developing resiliency and adaptation measures, and identify how natural resources can be used to “enhance climate adaptation, build resilience and mitigate climate change.”  The plan will be updated every five years.  In addition, the Secretariats must establish frameworks for state agencies and municipalities to use for conducting their own vulnerability assessments and developing and implementing adaptation plans in response.

4. New GHG Emission Reduction Regulations.  Earlier this year, the Massachusetts Supreme Judicial Court ruled that the GWSA mandates promulgation of volumetric GHG emission limits, which limits must decline on an annual basis.  EO 569 establishes a specific schedule for the Massachusetts Department of Environmental Protection to issue regulations in order to comply with that ruling, including publishing notice of the proposed regulations by December 16, 2016 and holding a public hearing by February 24, 2017.  In addition, the EO identifies specific GHG sources to be considered for emissions reductions, including:  (i) natural gas distribution system leaks, (ii) emission permits for existing, new, and expanded sources, and (iii) the transportation sector.

5. Climate Change Coordinator.  In an effort to bring some consistency to various state-level climate change initiatives, EO 569 creates a Climate Change Coordinator position within the Executive Office of Energy and Environmental Affairs.  This coordinator will lead in the development and implementation of the state-wide Climate Adaptation Plan, as well as performing vulnerability assessments.

Like all Executive Orders, EO 569 applies only to actions taken by the state government and is not directly enforceable against the private sector.  That said, EO 569 will have significant consequences for the private sector.  Parties seeking new or renewed air permits will likely be required to demonstrate efforts to reduce GHG emissions as a condition of those permits.  EO 569 will increase opportunities for companies offering energy conservation, energy efficiency and demand-response services and products in the Commonwealth.  Major GHG sources can anticipate mandatory emissions reductions, which will become more stringent over time.  The climate change vulnerability assessments and resulting Climate Adaptation Plan will affect real estate owners and developers – possibly including more stringent permitting standards in areas deemed to be at higher risk from future storm events.  And large power purchasers can hope that EO 569 will bring some price relief to one of the most expensive energy markets in the U.S.