HomeEnvironment & Climate NewsWashington State Imposes Carbon Dioxide Cap-and-Trade Regime

Washington State Imposes Carbon Dioxide Cap-and-Trade Regime

Washington Governor Jay Inslee has signed into law legislation capping carbon dioxide emissions and setting specific emission limits for individual businesses.

Simultaneously, Inslee used a line-item veto to remove language in Senate Bill 5126 tying implementation of the cap-and-trade scheme to passage of a transportation spending package that includes a gasoline tax hike of at least 5 cents per gallon.

Senate Bill 5126 was approved in the state senate by a margin of 27 votes in favor of the bill to 22 opposed, largely because of a “grand bargain” struck by lawmakers that included the gas tax. Many legislators expressed anger at the partial veto.

Carbon Credit Exchange

The new law establishes a cap-and-invest program for greenhouse gas emissions to be implemented by the Department of Ecology. A limited amount of emission credits are auctioned each year, with total number of credits slowly reduced overtime in an effort to reach “net zero” CO2 emissions by 2050.

Revenues from credit auctions are placed into a “Forward Flexible Account” targeting clean transportation, natural climate resiliency, clean energy transition and assistance, and energy efficiency projects.

Businesses purchasing credits are allowed to sell them to other businesses whose emissions exceed their allotments.

The legislation also requires an environmental justice review to ensure the cap-and-invest program achieves reductions in criteria pollutants in overburdened communities highly impacted by air pollution.

Inslee’s Veto ‘Unconstitutional’

Democratic lawmakers called Inslee’s veto of the gas tax a betrayal of the compromise reached to get the bill passed.

Inslee’s veto was unconstitutional and will be challenged in court, said House Speaker Laurie Jinkins (D-Tacoma), in a statement.

“The governor’s partial veto today of … the clean fuel standard bill reaches beyond his constitutional powers and we will ask the Washington courts to again rule on the balance of legislative and executive branch powers,” said Jinkins.

State Sen. Mark Mullet (D-Issaquah) said in a statement, his vote for the bill was premised precisely upon the funding provision Inslee vetoed.

“My votes were contingent on the bills’ funding for transportation projects,” said Mullet. “There is absolutely no reason that Gov. Inslee should veto portions of these bills that would help us tackle our state’s transportation needs.

“The Washington State Supreme Court says [the Governor] does not have the authority to veto sentences in bills, as [Inslee] did today,” Mullet said. “Not only is what he did today bad policy, it is unconstitutional.”

‘Policies are Regressive’

Washington state’s new cap-and-trade law will be ineffective and harm the poor, House minority leader J. T. Wilcox (R-Yelm) told Environment & Climate News.

“House Republicans voted against the low-carbon fuel standard and cap-and-trade bills because the policies are regressive and will make life more expensive for Washingtonians,” Wilcox said. “These measures will also do very little to reduce CO2 emissions.

“When environmental policies are balanced and effective, such as healthy forest initiatives and cleaning up toxic sites, you have seen Republican support,” Wilcox said. “But, we will not support ineffective policies that create more financial burdens for working families and small businesses.”

Washington state’s cap-and-trade law will do nothing to improve air quality but it will raise energy costs, says Todd Myers, director of the Center for the Environment at the Washington Policy Center.

“The low-carbon fuel standard (LCFS), when combined with cap-and-trade, does literally nothing to reduce CO2 emissions or improve air quality,” said Myers. “The LCFS adds nothing to reductions covered by cap-and-trade except extra cost; the only beneficiaries are the foreign biofuel companies that lobbied for it.

“The governor’s claim these bills won’t raise energy costs is simply dishonest,” said Myers. “Both California and Oregon admit the LCFS increases the cost of gasoline, with Oregon having an entire web page dedicated to the cost. To have to resort to dishonesty is an indication of how weak the justification for the policy truly is.”

The environmental justice provisions of the bill aren’t based in science but rather are a payoff to a key Democratic constituency, Myers says.

“The environmental justice provisions override science-based and objective standards of environmental effectiveness, and steer funding to politically favored communities,” Myers said. “Yet injecting more politics is not the way to reduce the impacts of poverty and pollution; in fact, it undermines science-based policies that do.”

Duggan Flanakin (dflanakin@gmail.com) writes from Austin, Texas.

Duggan Flanakin
Duggan Flanakin
Duggan Flanakin is the Director of Policy Research at the Committee For A Constructive Tomorrow. A former Senior Fellow with both the Texas and Arkansas Public Policy Foundations, Mr. Flanakin has a Master's in Public Policy from Regent University. During the years he spent reporting on environmental regulation in Texas and nationwide, Mr. Flanakin authored definitive works on the creation of the Texas Commission on Environmental Quality and on environmental education in Texas.


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