Washington Gov. Jay Inslee is making another push for a state carbon tax. The Democrat unveiled his latest proposal Tuesday during his State of the State address.
Under Inslee’s plan, industrial carbon emissions would be taxed at $20 per ton starting in 2019. After that, the tax rate would increase by 3.5 percent, plus inflation annually. The tax would raise an estimated $3.3 billion over the first four years.
During his speech, Inslee urged lawmakers to pass the carbon tax this year.
“Doing so will allow us to reinvest in all the things that drive down emissions,” he said. “We can build more solar panels. We can put more electric cars on the road. We can help more Washingtonians purchase energy-saving insulation for their homes and businesses.”
Under his plan, Inslee would dedicate 50-percent of the carbon tax revenues to clean energy projects, 35-percent to “resilience” projects including flood control and forest health and 15-percent to help low-income communities and displaced workers. In December, Inslee also proposed to use carbon tax revenues on a one-time basis to replenish state reserves he wants to tap to cover a nearly $1 billion shortfall in education spending for the 2018-19 school year.
Several hundred businesses operating in Washington would pay the tax, including utilities and oil companies. Energy-intensive and trade-exposed industries could petition for an exemption from the tax.
Last year, executives from Kansas-based Ash Grove Cement testified against a different carbon tax proposal in the Washington Legislature calling it the equivalent of a “death warrant” for the company’s Seattle plant.
“[It’s] putting facilities like us, heavily trade-exposed, energy-intensive industries on death row,” said Curtis Lesslie, the vice president of environmental affairs for Ash Grove.
Republicans have also criticized the idea of a carbon tax as bad for business and consumers.
“A new tax on energy in Washington state will drive jobs out of here,” said state Sen. Doug Ericksen, the ranking Republican on the Senate energy committee.
Inslee insists a tax on carbon would create jobs by fueling a clean energy economy in the state.
However, Inslee’s staff also acknowledged that Washington consumers would pay more in fuel and energy costs if a carbon tax is enacted. British Columbia and California already price carbon and Oregon is also considering it.
Passage of a carbon tax in a short, 60-day election year session appears to be a longshot in Olympia — even with Democrats in control of both the House and Senate. But there is a wildcard factor: the potential for carbon tax ballot measures in 2018 backed by tribal, labor and environmental interests. The threat of initiatives could bring the business community to the negotiating table at the Legislature.
Last year, Inslee proposed a similar carbon tax as part of his plan to fully fund schools. Under that proposal, 50 percent of the revenues would have gone to K-12 education. Instead, lawmakers adopted a new state property tax levy to fund schools.
In 2014, Inslee unveiled a “cap-and-trade” proposal designed to raise about $1 billion per year with nearly half the proceeds to fund transportation projects. That proposal died in the 2015 legislature.
Since his days as a member of Congress, Inslee has made combating carbon emissions and global climate change a signature issue. He even wrote a book about it titled “Apollo’s Fire: Igniting America’s Clean Energy Economy.”
A 2008 law requires Washington to reduce greenhouse gas emissions to 25 percent below 1990 levels by 2035 and 50 percent below 1990 levels by 2050. Projections show the state is not on target to meet those reductions.
There are proposals in the Washington Legislature this year to set more ambitious goals for carbon emission reduction that align with the 2015 Paris climate agreement.