Carbon Fee Would Invest In Clean Energy, But How Much Pollution Would It Cut?
One of the big decisions Washington voters face this election lies in Initiative 1631, which asks voters to impose a fee on carbon emissions. That’s the air pollution that comes from fossil fuels used in industry and transportation.
Two years ago, voters here rejected an initiative for a revenue-neutral carbon tax that had bipartisan support. This time, more stakeholders got involved and came up with a new proposal.
They want the fees collected to be invested in programs for clean air and clean energy, but they’re up against stiff opposition from big oil.
Some of the state’s heaviest hitters are chiming in on Initiative 1631, and there’s a lot of money on both sides.
Among the most prominent supporters is Washington Governor Jay Inslee, who has been trying for years to put a price on carbon. This summer, he joined campaigners at Westlake Park in Seattle to gather signatures and get the measure on the ballot.
“It’s going to help children breathe, have cleaner air. I think that’s the best reason for this,” Inslee said as he signed up a new supporter, who promised he would vote in November.
“For our kids, because that’s what’s most important to us,” Inslee said.
The governor says I-1631 is also a job creation program for the clean energy sector, which he says represents the future. Boosting that sector was part of the clean energy platform he ran on.
Speaking at a recent campaign press conference in the garage of a solar installation company, he said the oil industry is trying to fool people into voting against those jobs.
“They have flooded our air with pollution and they have flooded our air waves with distortion,” Inslee said.
Record Spending From Big Oil
The No campaign, with 99 percent of its funding from big oil, has amassed more than $26.2 million as of Wednesday, setting a new state record for spending against an initiative. Their ads are all over the airwaves. One of the most frequently used spots features a testimonial from former attorney general Rob McKenna, who ran against Inslee in the race for Governor in 2012.
“As attorney general, consumer protection was my top priority. That’s why I’m speaking out against I-1631. This new energy tax exempts many of the state’s largest polluters.” McKenna says.
The initiative does exempt several large polluters, including the TransAlta coal power plant in Centralia and trade-exposed industries such as steel and aluminum producers and Boeing.
But the yes side says TransAlta is shutting down five years after the policy would take effect because of a prior agreement with the state government, so putting the fee on it would undo that deal. And they want to make sure they have locally produced steel and aluminum to build wind turbines and solar panels. They also don’t want the initiative to be a job killer.
They say it will still cover the vast majority of the state’s big polluters, including oil refineries owned by two of the largest donors to the No campaign, Phillips 66 and BP.
Becky Kelley is President of the Washington Environmental Council, one of several groups that helped write the initiative. She says it’s carefully designed through the work of dozens of organizations and tribes.
“It really was built from the ground up by a very broad coalition, including environmentalists, labor unions, communities of color, climate-action-oriented businesses, faith leaders, health professionals,” she said.
Kelley says they wrote a policy that will reduce pollution and deliver clean energy to communities all over the state.
Details of I-1631
The measure would charge big polluters $15 per ton of carbon they emit, starting in 2020. The fee would go up by $2 per ton every year until the state meets its reduction goal for 2035 of 20 million metric tons of carbon, and until it is on track to meet its goal for 2050 of 50 million tons.
The money collected goes into a fund for investments in programs to address carbon pollution: 70 percent is for clean energy projects such as wind and solar, 25 percent goes to forest health and clean water. The remaining 5 percent is for public health, worker protection and assistance for vulnerable communities, such as those in flood and fire-prone areas.
There is also preference given to investments in areas that have been hard-hit by carbon pollution in the past. And the measure stipulates that at least 10 percent of the total investments authorized must be used for activities or projects formally supported by a Native American tribe, with preference given to those that they propose or administer.
Because it’s a fee, not a tax, it can only be spent on carbon-related problems and solutions. The state estimates it will raise $2.3 billion in the first five years.
But the reality is no one really knows at this point how much carbon reduction the board can actually deliver, because they don’t yet have a spending plan.
Opponents say this is a fatal flaw. Dana Bieber is coalition spokeswoman for the No on 1631 campaign.
"I think one thing we can all agree on is climate change is a serious issue and it deserves a serious response. But unfortunately, 1631 isn’t a serious response. It’s ineffective and costly,” Bieber says.
Gas And Utility Bills Going Up?
So how much would this law cost an average state resident? That depends on how much of the fees the big polluters pass along to consumers.
Experts mostly agree that it will be about 14 cents per gallon of gas in the first year. But the overall cost will include bills for electricity and most heat too.
Here’s Becky Kelley’s answer, for the Yes Campaign:
“Our assessments by folks out in the community who’ve looked at this think that it’ll be about $13 per household per month, Kelley says.
“And I think what you have to look at is what you’re getting for that. You’re getting access to clean energy, you’re getting cleaner solutions, you’re getting cleaner air. You’re getting more jobs in your community, more tax revenues from those jobs,” she says.
And over time, Kelley says, the oil and gas companies won’t be able to pass along as much cost, because more people will be using electric cars and sustainable energy that fossil fuel companies will have to compete with. So she expects the costs to eventually go down. And she thinks it’s worth it for households to pay a total cost of about $156 dollars per year on average, to start with.
Contrast that with the No side. Here’s Dana Bieber, citing a study commissioned by the oil companies:
“It determined that families would pay an additional $440 a year, just the first year alone, in increased costs, under 1631. And that the same time, we don’t know how the money is going to be spent. Because there is an unelected board with no real accountability that’s responsible for doling out $30 billion,” Bieber says.
I-1631’s backers disagree that the board overseeing the spending would be unaccountable. It would be appointed by the Governor to draft a spending plan that will meet the state’s carbon reduction goals. Fifteen members would represent the interests and expertise of the broad-based coalition that put the initiative together. They would have to review the plan every 4 years to make sure it’s working. And they are ultimately under supervision of the state legislature.
Supporters of the initiative say it’s a strength that they don’t have a plan yet. April Sims, with the Washington State Labor Council, represented the yes side in a recent debate of the measure at the University of Washington. She defended the open slate it would provide for the new spending.
“This is a changing economy. We need to be flexible and we need to be ready to move as the technology improves,” Sims says. “So we don’t want to limit ourselves to the ideas of today, because this is bigger than just today. We’re thinking about the future and the transition to a green energy economy.”
Will it work?
How the clean energy fund is invested is perhaps the most important question, says analyst Marc Hafstead with the Washington, D.C.-based think tank, Resources for the Future.
He’s been studying carbon policy for the past decade and says the price that I-1631 puts on carbon is really pretty low. It probably won’t get many people out of their cars at first or change other consumer behaviors much. That makes good investments in clean energy alternatives crucial.
“So, the success of the policy is going to depend on how effective those investments are at reducing emissions,” Hafstead says.
That means the board would need to invest in projects that deliver the most bang for the buck, like solar panels in the sunniest areas of the state or wind turbines in especially gusty places, Hafstead says. And he thinks other states will be watching to see if this system works.
“We historically have looked at the states as the laboratories. So I think that this is going to be a new experiment,” he said.
“And if it does pass, people will be watching really closely to see how the Washington households are actually changing their behavior and they’ll be watching to see how those investments are spent and if they’re effective at reducing emissions,” Hafstead says.
And if it fails, that would also send a signal, Hafstead says, about how difficult it is to pass this kind of policy, even in a mostly blue, environmentally-minded state.
Nives Dolsak, Professor and Associate Director at the University of Washington’s School of Marine and Environmental Affairs, says the carbon pricing scheme laid out in I-1631 isn’t perfect, but most policies aren’t.
“So the question comes down to, do we want to hold off and wait until we have the perfect policy, which I believe we will never have, because that’s just impossible in the political system,” Dolsak says.
“Or do we say yes to a policy, which we know is not perfect, but gets us started, forces us to rethink how we are pricing fossil fuels, forces us to rethink our decisions with respect to technologies we’re investing in, and adjust as we go.”
For most Washington voters, it will likely come down to weighing the urgency of addressing climate change with the effects of this measure on their pocketbooks, as well as whether they would trust a newly appointed public oversight board and the legislature to spend their investments wisely.
Correction: A previous version of this story incorrectly said the No on I-1631 campaign had raised more than a quarter billion dollars. The correct figure is $26.2 million as of Wednesday. The text of this story has been updated to reflect the change.