State of Hawaii
Act 234, SLH 2007
Relating to Greenhouse Gas Emissions
Summary of Requirements

Act 234 was signed into law by Governor Linda Lingle on June 30, 2007, and became effective July 1, 2007. The general purpose of Act 234 was to establish and cost-effectively achieve State policy of greenhouse gas emissions (GHG) reductions and limits at or below the best estimates and updates of the inventory levels of GHG emission estimates for 1990, by January 2020.

To achieve this purpose, Act 234 mandated specific requirements and activities to be completed within specified schedules and timeline including the following:

1. DBEDT and DOH to update the Inventory of Hawaii’s Greenhouse Gas Emissions Estimates for 1990, by December 31, 2008, provided that at least one public hearing shall be held prior to the completion of the updated inventory.

2. Establish a greenhouse gas emissions reduction task force to develop and recommend a work plan for statewide wide GHG emissions reduction program and strategies including regulatory mechanisms, and legislation proposals, to ensure the achievement of the statewide GHG emissions reductions limits at or below the 1990 emissions levels by January 2020, as established by the Act.

The Act mandates that the regulatory schemes developed by the task force shall be designed to implement “the maximum practically and technically feasible and cost-effective reductions in greenhouse gas emissions from sources or categories of sources of GHG to achieve the statewide greenhouse gas emissions limits by 2020.” To achieve this goal, the Act specified thirteen (13) objectives that must be included in the Task Force’s work plan. These objectives include but not limited to the following:

1. Consultation with all state agencies having jurisdiction over sources of GHGs on all elements of its plan that pertain to energy-related matters, including but not limited to electrical generation; provision of reliable and affordable electrical service; petroleum refining; and Statewide fuel supplies, to ensure that the GHG emissions reduction program and strategies to be adopted and implemented are complementary, avoid or minimize duplication, and can be implemented in an efficient and cost-effective manner.
2. Identification and recommendations on direct emissions reduction measures; alternative compliance mechanisms; market-based compliance mechanisms; and potential monetary and non-monetary incentives, for sources and categories of sources that are necessary or desirable to facilitate the achievement of the maximum feasible and cost-effective reductions of GHG emissions by 2020.
3. Consideration and identification of relevant information pertaining to GHG emissions reduction programs, including effective strategies and methods to reduce GHGs and management of GHGs control programs, and to assist in designing control mechanisms that are most applicable to Hawaii. This includes consultation with other states, federal government, non-governmental organizations, and other nations where applicable, to facilitate the development of integrated and cost-effective regional, national, and international GHG emission reduction programs.
4. Investigation and development of analytical tools, economic models, or other analysis methods to evaluate the total potential costs and total potential economic and non-economic benefits of the plan for reducing GHGs to the State's economy, environment, and public health.
5. Consideration of the relative contribution of each source or source category to statewide GHG emissions and the potential for adverse effects on small businesses, and recommendation of a minimum threshold of GHG emissions below which emission reductions requirements shall not apply.
6. Identification of opportunities for emission reductions measures from all verifiable and enforceable voluntary actions, including but not limited to carbon sequestration projects and best management practices.
7. Examination and use of market-based compliance mechanisms to achieve emission reductions including:
1. Consideration of the potential for direct, indirect, and cumulative emission impacts from these mechanisms, including localized impacts in communities that are already adversely impacted by air pollution;
2. Design of any market-based compliance mechanism to prevent any increase in the emissions of toxic air contaminants or criteria air pollutants identified by the Environmental Protection Agency; and
3. Recommendations to maximize additional environmental and economic benefits for Hawaii, as appropriate.
8. Develop proposed rules governing how market-based compliance mechanisms may be used by regulated entities subject to GHG emission limits and mandatory emission reporting requirements to achieve compliance with their GHG emissions limits.
9. Develop proposed regulation to control mobile sources of GHG emissions to achieve reductions in statewide GHG emissions.
10. Develop recommendations to minimize "leakage" or a reduction in emissions of GHGs within the State that is offset by an increase in emissions of GHGs outside the State.
11. Develop recommendations on schedule of fees to be paid by the sources of GHG emissions regulated pursuant to this Act.
12. Review and revision of the work plan to achieve the maximum technologically feasible and cost-effective reductions of GHG emissions at least once every five years.

The Act also specifies the number and membership of the Task Force. The Act designated the DBEDT Director and the DOH Deputy Director of Environmental Health Administration as co-chairs of the Task Force. The Task Force has 8 other members, six (6) of whom are legislative appointees and two are appointees of the UH Manoa Climate Change Commission. The Act further specifies that the Task Force be established within DBEDT for administrative purposes only.

3. Task Force to submit to the legislature by December 31, 2009, its proposed work plan and regulatory scheme, and any proposed legislation, and any 5-year update to the work plan and regulatory measures, for achieving the statewide emissions limits by 2020.

4. DOH to adopt Administrative Rules by December 31, 2011, to become effective January 1, 2012, establishing GHG emission limits applicable to sources or categories of sources to be achieved by January 2020, including reporting and verification requirements, as well as monitoring and compliance measures.

5. Appropriated out of the general funds the sum of $500,000 for FY 2007-2008 and the same amount for FY 2008-2009, to DBEDT for purposes of the Act.