Governor rolls out carbon tax proposal and Republicans balk

Governor Jay Inslee rolled out his most recent proposal to tax carbon emissions across the state of Washington.

The proposal he unveiled on Tuesday is sweeping: emissions generated by power plants and transportation fuels — with the exception of airplane jet fuel — would be taxed at $20 per ton, starting July 1, 2019. With annual increases of roughly 3 percent plus inflation, the governor’s office estimates that the proposal would generate roughly $3.3 billion over the next four years.

The revenues from the tax would be channeled into a variety of funds to be invested in clean energy programs: 50 percent would go toward increasing residential and utility renewable energy infrastructure and incentives for clean transportation options, 35 percent to flood management, stormwater infrastructure, and forest health, while the remaining 15 percent would get invested in reducing energy costs for low-income communities.

“We have allowed the unfettered release of carbon pollution into our air. That burden will be carried by our children, our economy, our security, and our quality of life,” Inslee said during his Jan. 9 State of the State Address given at the Capitol. “Now is the time to join in action and put a price on carbon pollution.”

In a morning briefing before the governor’s speech, his policy advisors said that consumers would see electricity prices rise 4 to 5 percent, natural gas up by 9 to 11 percent, and a 5- to 6-percent hike for gasoline.

“There will be impacts on fuel and energy prices, but we expect these to be modest,” said Lauren McCloy, a senior policy advisor.

Additionally, the proposal exempts certain types of fossil fuels to “ensure Washington’s competitiveness in global and regional markets and protect rural jobs,” according to McCloy; among them are fossil fuel and electricity exports, an in-state coal plant that is slated for closure, and fossil fuels used in agriculture.

This is not Inslee’s first attempt at getting a carbon tax through the state Legislature: In both 2015 and 2016 the governor proposed a carbon tax to help meet the McCleary state Supreme Court mandate that the Legislature fully fund K-12 public education. Neither proposal made it to the governor’s desk.

In the runup to this year’s legislative session, Inslee said that he would push for using state budget reserves to pay for an additional $1 billion for public education to meet the most recent Supreme Court mandate. The carbon tax would replenish the withdrawn reserves.

This year’s version is essentially identical to last year’s proposal from the governor, save for how the revenue would be allocated.

In his State of the State address, Inslee called upon lawmakers to work across the aisle: “On this, there is no geographic divide. The Eastern Washington farmer whose irrigation supply is threatened by low snowpack faces the same crisis as the Western Washington shellfish grower whose baby oysters are threatened by ocean acidification,” he said.

But the governor’s carbon tax will face stiff opposition from both House and Senate Republicans while receiving only tepid support from Senate Democratic leadership.

Senate Majority Leader Sharon Nelson, D–Maury Island, was not enthusiastic about passing a carbon tax and said last week she is not sure the Legislature would be able to pass it in this year’s short 60-day session. During a speech given on Monday, Jan. 9 in the House chambers, Speaker of the House Frank Chopp, D–Seattle, didn’t mention a carbon tax when listing his legislative priorities.

However, bills mirroring Inslee’s proposal have already been introduced in the Senate by Sen. Reuven Carlyle, D–Seattle, and in the House by Rep. Joe Fitzgibbon, D–Burien.

On Tuesday afternoon, Carlyle disputed the notion that the Senate Democratic leadership isn’t fully behind the governor’s carbon tax: “The Senate leadership is absolutely and unequivocally committed to moving forward on this energy strategy, and it’s just a question of us crossing the t’s and dotting the i’s,” he said. “We’re going to refine the bill and kick it into high gear.”

Meanwhile, Senate Republicans — now in the minority — have staked out early battle lines in opposition. They argue that a carbon tax will hurt Washington industry, bring in unnecessary revenue, and, ultimately, fail to reduce carbon emissions significantly.

“If our ultimate goal is to reduce carbon, we don’t have to have the largest tax increase in [state] history,” Senate Majority Leader Mark Schoesler, R–Ritzville, said. “I’m completely against it.”

Sen. Doug Ericksen, R–Ferndale, has denounced Inslee’s proposal. “It’s a tax on energy, it’s not a carbon tax,” he said. “A new tax on energy in Washington state will drive jobs out of here … that just can’t happen to Washington state this year. We have to push back hard.”

House Republicans don’t like it either. “Is the issue of the carbon about the carbon or about the money?” said House Minority Leader Dan Kristiansen, R–Snohomish. “If it’s about the money, then I don’t think that it’s appropriate.”

Kristiansen has pointed to Washington’s wildfires as a major source of carbon pollution and argued that Inslee’s goals of reducing carbon emissions would be better served by investing in forest management. While Inslee’s carbon plan intends to put money towards forestry, a specific amount hasn’t been identified, said Reed Taylor, a senior policy advisor.

“Forest health is important … but the transportation sector is, by and large, the primary source of emissions in Washington state,” said Taylor.

Inslee’s staff claimed that the tax will reduce state emissions to 80 percent of 1990 levels, which would be larger than the current 50-percent reduction mandated by a law passed in 2008.

While relatively new in the U.S., other countries such as Ireland, the United Kingdom, Norway, South Korea, Sweden, and China have implemented or plan to implement various versions of a carbon tax, according to a 2015 World Bank Report. California expanded its own cap-and-trade system last summer.

“By passing a carbon tax, we would simply join our West Coast neighbors and the rest of the world, as the global economy moves away from fossil fuels and toward a decarbonized, clean-energy future,” Inslee said.

Inslee’s proposal aside, outside interest groups are looking to potentially put the issue before voters. The Alliance for Jobs and Clean Energy — an environmental pressure group — is currently drafting a carbon tax ballot initiative in collaboration with other groups.

The initiative’s purpose, reportedly, is to be a backstop in case the legislature fails to pass a carbon tax during the 60-day session. “We are preparing a ballot measure so that, if the Legislature fails to do its job, we are ready to take it to the people, and that’s because it’s time for action,” said Becky Kelley, president of the Washington Environmental Council and co-chair of the Alliance.