Washington Governor Proposes Carbon Tax

Published January 28, 2015

Washington Gov. Jay Inslee has pushed an ambitious cap-and-trade program requiring the state’s largest industries to pay for every ton of CO2 they release. The proposal is meant, in part, to meet Washington State’s projected $2 billion budget gap for the next two-year period. The plan could raise nearly $1 billion in the first year after it is enacted.

The revenue would pay for transportation projects, education-funding requirements imposed by the state Supreme Court, and energy assistance to low-income families and industries to offset the higher energy costs the carbon tax would impose.

His proposal would also help Washington meet a 2008 state mandate to significantly reduce greenhouse gas emissions to fight global warming.

Observers predict fierce resistance in the state Senate, where Republicans have control. Rep. Ed Orcutt (R-Kalama), the ranking Republican on the House Transportation Committee, stated in a press release, “It is difficult to comment on a proposal as lacking in details and verifiable facts as the governor’s. For example, he says his tax on polluters will raise nearly $5 billion over the next 12 years. How did he arrive at that figure? If his past statements as a candidate and governor on budget- and tax-related issues are any guide, I suspect it will not stand up to scrutiny.”

Environment Protection or Revenue

Daniel Simmons, vice president for policy at the Institute for Energy Research, says the plan to plug a budget gap with cap-and-trade or carbon tax revenue shows the point of these schemes is revenue generation, not environmental concerns.

“People who are promoting a carbon tax are doing so because it is a new tax; it is new revenue for the government,” Simmons said.

Increased taxes will generate additional revenue but no environmental benefit. Both cap-and-trade and a carbon tax increase energy prices, hurting regular Washingtonians and especially the poor. In exchange for that pain, the temperature “savings” would be less than miniscule, Simmons notes.

“If Washington State completely ceased emitting carbon dioxide today, the temperature ‘savings’ by 2100 would be 0.0023 °C. And cap-and-trade or a carbon tax would not eliminate carbon dioxide emissions or achieve anything even close. That’s why this isn’t about the environment; it’s about raising taxes,” Simmons said.

It’s About the Environment

Todd Myers, director of the Center for the Environment at the Washington Policy Center, notes cap-and-trade is the same system Europe used to cut carbon emissions. Now Inslee is trying to copy a plan introduced in California three years ago, Myers says. “If he’s successful, the state will tax gas companies and they will pay $12 per ton of carbon to get a permit,” he said.

“In Europe, cap-and-trade has caused volatility in gas prices. So if it passes, cap-and-trade will cause gas prices to go up.

“Washington already has one of the highest gas taxes in the country, and this will be applied on top. Inslee is doing this to combat ‘global warming.’ He’s a true believer, and he has already said in a radio interview last year that fighting global warming is akin to fighting the Nazis during World War II. Indeed, the environmental community has called him the greenest governor in the country,” Myers added.

Myron Ebell, director of the Center for Energy and Environment at the Competitive Enterprise Institute agrees Inslee is a true believer in catastrophic global warming.

“He wants to establish cap-and-trade, and he wants the recognition for establishing it in his state, and if he could, he would like Washington State’s economy to resemble what Jerry Brown has done in California. However, there is very little chance that could happen in Washington since they do not have a state income tax and there already exists a quite strong business community,” explains Ebell.

“In Washington State, though, [cap and trade] won’t have the same effect as [in] the rest of the country because much of the state’s electricity is delivered from hydroelectric. Any cap-and-trade plan would have to target transportation, electricity, and heating and cooling of homes,” Ebell explained.