Washington State Leads in Climate-Friendly Building Policies—For Now

Buildings make up a quarter of Washington state’s carbon emissions, polluting more than any other sector except transportation.¹This includes electricity emissions in commercial and residential buildings; it does not include industrial emissions.
To change this grim statistic and achieve state climate goals, Washington has put in place some of the strongest building decarbonization policies in the United States.  

Washington has mandated that the state’s electricity come from carbon-free sources by 2045. It has passed leading energy efficiency requirements for its biggest polluting institutions. It has created innovative pathways for utilities to help their customers electrify. And it has incentivized builders to install high-efficiency electric appliances instead of polluting gas-fired ones in new construction. 

Two statewide initiatives on the November 2024 ballot could undo some of this robust policy and regulatory apparatus. So, Sightline analyzed the proposals and assessed how they would (or would not) affect Washington’s building decarbonization efforts.  

Initiative 2117 to repeal Washington’s Climate Commitment Act would take with it more than $442 million that the state legislature has authorized to clean up existing buildings.²Sightline analysis of Risk of Repeal database. Includes only funds the legislature has authorized in the current biennium (fiscal years 2023–25).
Initiative 2066 would prevent the state, cities, and counties from actions that “prohibit, penalize, or discourage” the use of gas for heating or other appliances, which could affect Washington’s new energy code and Seattle’s new Building Emissions Performance Standard.  Initiative 2066 would also repeal parts of HB 1589, a new policy to help customers of Washington’s largest utility, Puget Sound Energy (PSE), go electric. 

In the meantime, other US states are putting in place ever more ambitious building decarbonization policies and regulations, such as stronger building performance standards and more support to help residents make the switch from gas to electric appliances. To maintain its lead, Washington can look to states such as Colorado, Maryland, and New York for inspiration. 

Washington has laid a strong policy foundation to clean up its existing buildings 

The state’s carbon-free electricity mandate will slash existing building emissions  

Buildings pollute the climate in two primary ways: running on electricity from a not-yet-carbon-free grid and burning fossil fuels (mostly gas) directly for space and water heating. In Washington, these two sources each make up about half of the state’s emissions from commercial and residential buildings, as Figure 1 shows. 

In 2019 the state legislature tackled the first of these drivers by passing Washington’s clean electricity mandate, the Clean Energy Transformation Act (CETA). CETA requires that electric utilities’ portfolios be greenhouse gas-neutral by 2030 and completely carbon-free by 2045. Washington’s grid is already about two-thirds non-emitting, but utilities still burn gas and coal for at least 20 percent of the state’s power. 

Once fully implemented, CETA will erase about half of the emissions from existing commercial and residential buildings by eliminating carbon pollution from electricity. 

Performance standards will further drive down pollution in big buildings  

Complementing CETA, in 2019, Washington also passed the Clean Buildings Act, which established the United States’ first statewide building performance standard. Following Washington’s lead, Colorado, Maryland, and Oregon have since established their own building performance standards. 

Washington’s Clean Buildings Performance Standard (CBPS) requires existing commercial buildings larger than 50,000 square feet (office buildings, universities, and shopping malls, for example) to meet an energy efficiency target tailored to their building type and climate zone. More than 8,000 buildings will need to comply with the new standard, with compliance for the largest buildings beginning in 2026. 

The CBPS does not direct buildings on how to meet the energy efficiency target. But in practice, adherence to the standard should drive down commercial building emissions stemming from both electricity (until Washington’s grid is entirely carbon-free) and direct fossil fuel combustion (e.g., burning gas for space and water heating). The CBPS indirectly gets at this latter driver because the most efficient energy systems that building owners can install today are electric ones, not those powered by fossil fuels. (An electric heat pump is at least two to three times more efficient than a gas furnace, for example.) 

In 2022 the legislature expanded the CBPS to require energy efficiency reporting from smaller commercial and large multifamily buildings. However, as yet, lawmakers have not required these so-called Tier 2 buildings to meet an energy efficiency target. Complementing the CBPS, Washington policymakers have also specifically gone after carbon pollution from state agencies and public higher education institutions, requiring these entities to reduce their greenhouse gas emissions to net-zero by 2050. 

In December 2023 Seattle Mayor Bruce Harrell signed into law a citywide Building Emissions Performance Standard (BEPS) that goes further than the state’s CBPS. Seattle’s BEPS requires the city’s existing buildings that are larger than 20,000 square feet to meet progressively declining greenhouse gas emissions targets until achieving net-zero emissions in 2050. 

BEPS will reduce the city’s building emissions by 27 percent by 2050, whereas the statewide CBPS will only reduce Seattle’s building emissions by 4 percent over the same time period, according to the City of Seattle’s Office of Sustainability & Environment.  

That difference is primarily because Seattle’s standard sets emissions targets, whereas the state’s standard sets efficiency targets. Improved energy efficiency can make minimal progress on greenhouse gas emissions in Seattle, given the city’s almost entirely carbon-free electric grid. Plus, BEPS applies to about 4,000 buildings in Seattle due to its lower size threshold, whereas only about 1,000 buildings in the city will need to meet the statewide CBPS.³This map shows fewer than 4,000 buildings because campuses are reported as one building.
 

New pathways for Washington utilities will help residential customers ditch gas in favor of high-efficiency electric appliances 

In Washington, the residential building sector pollutes even more than the commercial one, as Figure 1 shows. More than a million households in Washington live with mini polluters inside their homes in the form of gas furnaces, boilers, dryers, and stoves. Most of the climate-warming carbon emissions from burning gas in homes come from space and water heating. At the same time, evidence for the health risks of gas stoves, especially to children, is growing. 

In the 2024 legislative session, Washington lawmakers enacted policies for the first time that directly tackle residential building decarbonization. The legislature passed HB 1589, which requires the state’s largest utility, PSE, to help its customers transition from gas to electricity. Among the most notable provisions of the law are 

• requiring PSE to plan for cost-effective electrification of customers’ end uses currently served by gas, such as space and water heating; 
• ending PSE’s incentives for gas appliances starting in 2025; and 
• requiring PSE to evaluate a suite of solutions, including electrifying whole neighborhoods, that could enable pruning the gas system. 

In the same session, the legislature passed HB 2131, which revises state statute to allow gas utilities to install thermal energy networks instead of restricting these companies to selling only gas. (Sightline has written previously about the promise of thermal energy networks as a climate-friendly gas utility business model under the name GeoNetworks.) 

HB 2131 means that a Washington gas utility could transition multiple homes and/or businesses off its gas system and connect them to a network of climate-friendly ground source heat pumps. Ground source heat pumps harness the earth’s stable temperature to heat and cool homes extremely efficiently without emitting carbon. (Note that contrary to common misconceptions, thermal energy networks do not rely on geothermal energy.) 

In 2022 the utility Eversource began piloting a thermal energy network in 36 buildings in Framingham, Massachusetts. The company expects to start connecting customers to the system in summer 2024. 

To support piloting thermal energy networks in Washington, HB 2131 authorizes the Washington Department of Commerce to administer a $25 million grant program for the state’s six gas utilities. Gas utilities will have until spring 2025 to propose a pilot project, with the expectation that the first projects will go live by the end of 2026. 

New buildings in Washington will be cleaner, healthier, and cheaper to heat and cool thanks to the state’s updated energy code 

As it cleans up existing buildings, Washington is also working to prevent a bad problem from getting worse with new construction. The state will add nearly one million new residential units between 2024 and 2050, according to forecast data from the Northwest Power and Conservation Council. That means construction has not yet started on almost a third of Washington’s 2050 residential housing stock (see Figure 2). 

The state’s most recent residential and commercial energy code, which went into effect in March 2024, clamps down on the use of gas for space and water heating in new buildings in favor of high-efficiency electric alternatives such as heat pumps.⁴ Building codes operate on a three-year cycle. The most recent codes adopted in March 2024 are called the 2021 codes.
 

These new rules flow from longstanding statutory requirements the Washington legislature set for the State Building Code Council (SBCC). In 2009 Washington lawmakers required the SBCC to establish rules that contribute to constructing emissions-free homes and buildings by 2031. Policymakers also mandated that the state’s 2031 energy code lead to a 70 percent net energy use reduction compared to the 2006 code, with incremental progress at each code cycle in between.⁵The 2031 building code will go into effect in 2033.
 

When the SBCC first proposed the latest energy code, it explicitly required electric heat pumps in all new commercial and residential buildings. At the time, this was the most climate-ambitious energy code in the United States. However, after the US Court of Appeals for the Ninth Circuit overturned Berkeley’s prohibition on gas hookups in new buildings, the SBCC voluntarily revised its draft code to bolster it against potential lawsuits from the gas industry. 

The final energy code does not require heat pumps or ban gas hookups, but it does make it a no-brainer for developers to install heat pumps instead of gas furnaces or boilers. In essence, if a builder chooses to install a gas furnace or boiler, they will also need to install a slew of other (likely more expensive) efficiency measures. 

The move toward heat pumps in new homes will offer practical benefits to Washingtonians beyond the climate and health ones. Building new all-electric homes is cheaper than building new homes that use both gas and electricity, according to a 2022 RMI study that analyzed building and energy costs in nine US cities, including Seattle. Plus, heat pumps can help reduce energy bills. To top it off, heat pumps are a cooling solution, an increasing necessity for Washington’s hotter, drier summers. Today nearly half of Washington homes lack air conditioning. 

Two ballot initiatives would impact clean building policy scaffolding 

Two initiatives—2117 and 2066—on Washington’s November 2024 ballot would impact the state’s climate policies, including its efforts to reduce pollution from buildings. 

First, let’s get out of the way what the initiatives don’t do. Neither would get rid of the state’s Clean Building Performance Standard. Nor would they repeal the Clean Energy Transformation Act, the state’s clean electricity law. 

But both initiatives would make it more difficult for the state to decarbonize buildings. 

Initiative 2117 would repeal the state’s cap and invest program, the Climate Commitment Act (CCA). By charging big emitters to pollute, the CCA has raised nearly $2 billion for hundreds of climate- and community-friendly projects. By the close of the 2023 legislative session, lawmakers had allocated $521 million from the CCA to cleaner buildings. Of that, $443 million (85 percent)  would likely disappear if Initiative 2117 passes (see Figure 3).⁶Sightline analysis of Risk of Repeal database. Includes only funds the legislature has authorized in the current biennium (fiscal years 2023–25).
 

Funding from the CCA includes millions of dollars to help building owners comply with the state’s CBPS as well as dedicated investments for public institutions to clean up their properties. For example, the University of Washington (UW) is set to receive almost $40 million for a variety of projects to improve energy efficiency on its campuses. The university plans to request hundreds of millions more in CCA funding to implement its decarbonization plans if the CCA is not repealed, according to a UW representative Sightline interviewed. Today the UW Seattle campus is Seattle’s second biggest standalone emitter, trailing only the Ash Grove Cement Factory in South Seattle. 

The legislature also authorized roughly $80 million from the CCA to help low- and moderate-income households and small businesses electrify, including with rebates for heat pumps. And, repealing the CCA would get rid of at least $5 million in funding that the state has authorized for gas utility thermal energy network pilots under HB 2131. 

The other initiative, Initiative 2066, more directly targets Washington’s building decarbonization policies and regulations. It would strike through the 15-year-old statutory requirement that the state’s energy codes lead to net-zero emissions new buildings by 2031. And it would prevent the state’s energy codes, as well as cities, counties, and agencies, from actions that “prohibit, penalize, or discourage” the use of gas and gas appliances. Though neither Washington’s newest energy code nor Seattle’s BEPS ban gas, the gas lobby could try to use the initiative’s language to challenge these regulations if the initiative passes. 

Initiative 2066 would also repeal parts of HB 1589, the law that helps PSE customers transition from gas to electricity. It would eliminate the requirements that PSE develop a plan for electrifying its customers’ end uses, fund electrification readiness programs, and examine neighborhood electrification as a way to start pruning the gas assets.

Washington can look to other states for ideas to accelerate building decarbonization  

In the meantime, other states are charging ahead with ever-more ambitious building decarbonization policies. 

In 2021 Colorado passed SB 264, which requires the state’s gas utilities to develop clean heat plans that reduce their greenhouse gas emissions by 22 percent by 2030. As a result of the law, in June 2024, the state’s public utility commission approved a $383 million clean heat plan put forward by Xcel, the state’s largest gas utility. Xcel’s plan includes millions of dollars to help transition its customers from gas to electric appliances and is the first of its kind by a gas utility in the United States. While Washington’s HB 1589 could lead to a similar plan by PSE, Colorado’s SB 264 applies to all gas utilities in the state, not just one. 

In 2023 New York became the first state to ban gas in new construction, stealing that title after Washington scaled back its most recent energy codes. New York is also one of several states, (including Colorado and Massachusetts) that have passed more ambitious policies than Washington to support thermal energy networks. New York’s 2022 Utility Thermal Energy Networks and Jobs Act requires the state’s seven largest investor-owned utilities to submit at least one pilot project to the commission for review. By contrast, Washington’s HB 2131 makes pilots possible but does not require them. 

Also in 2023, Massachusetts’s Department of Public Utilities introduced a new regulatory framework for gas utilities that, among other provisions, prevents gas utilities from profiting from gas system expansion if non-gas alternatives, such as electrification or energy efficiency, are viable. The closest Washington has come to a policy like this is again in HB 1589, which requires PSE to assess alternatives like electrification to continued investment in the polluting gas system.  

Finally, in 2024, Maryland adopted its own building performance standard, which applies to a broader set of buildings and sets a more stringent goal than Washington’s CBPS. Maryland’s standard applies to all existing buildings over 35,000 square feet, while Washington only requires buildings over 50,000 square feet to meet a target. And Maryland’s rules require buildings to achieve net-zero direct emissions by 2045; Washington’s CBPS does not set emissions targets but merely energy efficiency ones that will not achieve net-zero on their own. 

Washington has led the United States in building decarbonization policies. Two state initiatives could roll back some of these efforts. No matter what, state leaders have more opportunities to glean inspiration from other states and bolster Washington’s clean building scaffolding. Doing so just might put Washington back in the lead.