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Washington state Republicans and conservative groups are ramping up opposition to a new program requiring businesses to account for their carbon emissions, and these efforts could show up on the November ballot box for voters to decide whether to scrap the system.
The Evergreen State’s cap-and-trade program launched last year as a result of the 2021 Climate Commitment Act, a law that requires businesses emitting over 25,000 metric tons of carbon a year to pay for their emissions. The law has allowed Washington to join 13 other states that have created similar programs to reduce carbon in the atmosphere, with Washington modeling its system after California’s. So far, the program has raised $1.8 billion in revenue, funds that are expected to be invested into other green initiatives, such as clean energy development.
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But Republicans have attacked the novel system, tying its implementation to elevated gasoline prices while saying that the program lacks transparency.
“We have market players that are involved in it that are potentially adding to the cost of the program,” said state Sen. Drew MacEwen, the ranking member of the Environment, Energy, and Technology Committee. “We’ve got to have transparency in that regard because we’re driving up costs that ultimately are affecting Washington consumers.”
While Washington’s Ecology Department acknowledged that gas prices would increase as a result of the program, how high the cost would rise is still being hotly debated, with the department maintaining that minimal increases ranging between two to four cents are expected within the next two years. Critics, such as the conservative Washington Policy Center, are estimating that prices could increase by at least 46 cents.
However, it’s hard to decipher whether the program is significantly affecting gas prices, as Washington is one of three West Coast states that have historically high fuel costs for reasons that fall outside of the cap-and-trade program. Furthermore, gas prices at large are at the whim of an international market that can be disrupted due to economic and geopolitical reasons.
MacEwen is also calling for more detailed information on companies participating in the cap and trade program, how much is being spent on allowances (which businesses are required to obtain for emissions they produce), and how the money collected by the state is being spent. The Ecology Department currently reports on the number of allowances offered and sold, a list of qualified bidders, along with the total proceeds generated from the auction. But the reports do not specify beyond that, a point that the Republican lawmaker argues would hinder assessing whether the program is working to reduce carbon emissions.
“We’re all for reducing pollution; that’s not the issue,” MacEwen said. “The issue is doing it prudently and transparently.”
However, ecology officials maintained that releasing this information would risk detailing companies’ business strategies while hindering flexibility to participate in the program.
“If we gave information on all those pieces, then really big fuel supplier B would know what supplier A is doing, and that might be a competitive disadvantage,” said Luke Martland, the department’s Climate Commitment Act implementation manager. “We don’t want collusion; we don’t want everyone knowing what everyone else might be bidding.”
While the money is required by law to be spent on projects that range between reducing emissions, transitioning away from fossil fuels, and improving air quality while alleviating health disparities, specific types of projects will be determined and appropriated by state lawmakers.
A few GOP bills have been introduced to address the transparency issue. For example, a bill from MacEwen would require utilities to list out what specific charges are related to implementing the cap and trade program. But with Democrats in control of both chambers of the state legislature, chances of any GOP-led bills to either reform or outright repeal the program are slim to none.
Some conservative groups, however, are taking the effort directly to the polls.
Conservative advocacy group Let’s Go Washington submitted a petition last November to the Washington secretary of state’s office to eliminate the cap and trade program, collecting more than 400,000 signatures. If the initiative is not passed by the state legislature, the petition will automatically be on the ballot for voters in November.
It’s unlikely that the measure will track any movement in the Democratic-controlled body. Energy Committee Chairman Joe Nguyen, a Democrat, told local publication Crosscut that the proposal is “dead on arrival.”
However, if the measure ends up on the ballot box, the program could be headed for the chopping block.
In 2018, voters rejected a measure that would impose a carbon tax, with revenues intended to be allocated to green projects and environmental justice initiatives. In 2016, voters rejected a similar proposal, one that would’ve funded a tax cut. Both represented losses to environmentalists who said that a carbon tax is an effective method of curbing emissions through economic incentives.
Furthermore, a lawsuit against Gov. Jay Inslee’s (D-WA) administration could add to the rhetoric surrounding the cap and trade program.
A former economist for the Washington State Department of Transportation had claimed he was told to lie about the effects of the program on fuel costs. Scott Smith, who had worked as a transportation planner for the WSDOT for the last five years, alleged that he was under pressure to keep quiet about his calculations that the program would lead to a 45-50 cent increase in gas prices, stating that the pressure and retaliation were so high that he felt forced to resign, according to a report by local station King 5 News.
Conservative nonprofit Citizen Action Defense Fund filed a claim on behalf of Smith last December against WSDOT, the Office of Financial Management, and the Office of the Governor.
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The lawsuit could bring further scrutiny on the program, and Republicans, according to MacEwen, aren’t letting the pressure escape.
“We’re certainly going to continue to talk about it and bring it up in every [facility] that we can to shine light on the issue,” said MacEwen.
