Key Takeaways
Washington voters have rejected carbon taxes twice, but Governor Jay Inslee and the legislature used the back door to institute a “carbon market,” which is raising the price of energy and food.
Since the law began to take effect, gasoline prices have risen to 4th highest in the nation.
Opponents have garnered more than 400,000 signatures to repeal the law which will be on the ballot this fall if the legislature does not enact the repeal.
Opponents of the carbon law see it as a virtue-signaling money grab to redistribute billions of dollars to political allies of the party in power.
Washington state has some of the most expensive gasoline prices in the nation due primarily to its climate agenda pushed by Governor Jay Inslee. Backers of an effort to repeal Washington’s carbon market now have enough signatures to put it before lawmakers and voters. They have submitted more than 400,000 signatures for Initiative 2117, which could repeal the climate law. The initiative requires 324,516 valid signatures to make it to the ballot after being verified by the Secretary of State’s Office. It is one of six initiatives mostly seeking to roll back laws passed by the Democratic-majority Legislature that supporters of “Let’s Go Washington” wants to put before voters this year.
Washington’s 2021 Climate Commitment Act created a carbon-pricing system for greenhouse gas emissions. In its first year, auctions for carbon allowances raised $1.8 billion that is being used for the state’s green programs, including buying electric school buses and making public transit free for children, buying heat pumps and solar panels for farmers and low-income households, and improving safety for cyclists and pedestrians, among other purportedly climate-related initiatives. More than 41 million carbon allowances were sold. Each allowance represents one metric ton of emissions from the state’s biggest greenhouse-gas emitters, who then pass those costs on to consumers.
The carbon-pricing program requires companies, such as power facilities and refineries, to buy allowances to cover their emissions. Over the course of seven three-year periods, the number of available allowances will be reduced, creating pressure for industries to lower emissions. Businesses covered by the program are businesses that emit more than 25,000 metric tons of greenhouse gases per year. Those businesses are to first turn in allowances to comply with the law in November 2024 when one-third of 2023 emissions are due. The rest of the allowances for the first compliance period are due in November 2027. Some companies, such as natural gas utilities and oil refineries, will initially get a portion of their allowances free, but are required to buy more if they emit greenhouse gases above the allotted levels.
Washington’s goal is to cut emissions nearly in half by 2030, and be mostly carbon-free by 2050 to meet the targets of the Paris Agreement, which set an international framework to limit projected global warming to 1.5 degrees Celsius. Washington Governor Jay Inslee pushed through the climate law despite voters twice rejecting previous efforts to impose a carbon tax. For the last few months, Inslee has been pushing the Legislature to pass a bill that would link Washington’s carbon auction market with those in California and Quebec, contending that it would drive down the price of gasoline. Assuming Washington, California and Quebec agree to merge their carbon markets, the earliest the process could be completed is 2025, so there would be no relief to Washington state consumers in the near future.
Opponents of the climate law have blamed it for the state’s high gasoline prices and for driving up the cost of food. According to AAA, on February 13, Washington gasoline prices were the fourth highest in the nation at $3.90 a gallon for regular gas, $0.67 higher than the U.S. average of $3.23 per gallon. Opponents also argue that the law does not make sense when neighboring states such as Idaho do not have a carbon tax or a carbon auction.
Brian Heywood, a business owner from Redmond, Washington, funded the climate act reversal proposal, spending $1 million to get it on the November ballot. According to Heywood, “This is a triple tax on consumers, adding costs at the gas pump, the grocery store, and on home heating bills.” “The Legislature’s cap and tax scheme will not reduce even one ounce of carbon emissions. It has already taken a bite out of family budgets and put a heavy burden on commuters just so politicians can distribute feel-good subsidies to their political friends and allies.”
According to the Office of Secretary of State’s Elections Division, once an initiative is submitted and validated, lawmakers must take one of the following three actions:
- The legislature can adopt the initiative as proposed and it becomes law without a vote.
- Lawmakers may reject or refuse to act on the proposed initiative and the initiative is placed on the ballot at the next state general election, which is in November 2024.
- Legislators may propose a different measure dealing with the same subject and both measures must be placed on the next state general election ballot.
The Democrat-led Legislature is unlikely to adopt the initiative. And in both the case of a rejection and a refusal to act, it will end up in front of voters on the November ballot.
Washington state’s greenhouse-gas emissions in 2019 reached their highest level since 2007: 102 million metric tons. It was a 7 percent increase from 2018 levels, and 9 percent higher than 1990 levels. Governor Inslee proposed an additional $941 million in investments in projects intended to reduce emissions in the 2024 supplemental budget, adding to the carbon auction revenue.
Conclusion
The Washington state Democrat Legislature passed a climate bill in 2021 that puts in place a cap-and-trade system that is essentially a carbon tax, despite its residents voting against such a tax twice. Gasoline prices increased as a result, and Washington state now has the fourth highest gas prices in the country. Opponents to the climate bill have received enough signatures to put it to a vote this November in hopes of overturning it. They see no value in it as it has increased gasoline, food, and home heating prices without reducing emissions.
