2018 could see wave of West Coast climate pollution pricing

SEATTLE (Thomson Reuters Foundation) - If elected officials get their way, the entire West Coast of North America could be putting a price on pollution by the end of this year.

As state legislature sessions opened this month, Washington state Governor Jay Inslee called for a carbon tax and Oregon legislators proposed a “cap and invest” system.

Both policies are designed to make industrial emitters of carbon dioxide pay some of the costs of damage caused by growing levels of carbon dioxide in the atmosphere, and to create incentives for them to reduce emissions.

Carbon dioxide emissions are one of the major drivers of human-caused climate change.

If the Washington and Oregon legislatures pass such measures, they would join California’s cap-and-trade system to the south and British Columbia’s carbon tax to the north. The jurisdictions would be part of a united Pacific front on climate change.

“It is time to step up and give our citizens what they demand and deserve — and what is the law — which is a fight against climate change and the damaging health effects of carbon pollution,” Inslee, a Democrat, said in his State of the State speech on January 9.


In Oregon, political observers see the 2018 legislative session as the best opportunity to create a so-called “cap and invest” system that would cap the amount of carbon that industrial polluters can emit, forcing them to buy allowances for any excess.

Early estimates suggest the plan could raise up to $1.8 billion annually that could in turn be invested in renewable energy, low-carbon transportation, and other climate-friendly measures.

Governor Kate Brown has been less vocal than Inslee about her state’s carbon plan, whose details remain less developed than the Washington proposal.

In 2016, Washington state voters rejected a ballot initiative that would have created the first carbon tax in the United States.

Environmental groups split on the measure, with some criticizing the fact that cash from the tax would used to lower other taxes, rather to invest in the needs of vulnerable communities most affected by climate change.

But with a Democratic majority in both houses of the Washington state legislature, Inslee, who has made climate change a signature issue, has a good chance of seeing his landmark policy proposal come to life, experts say.

Inslee has proposed a $20 per ton tax on industrial carbon emissions that would increase 3.5 percent annually above the rate of inflation in order to deter increased carbon emissions.

The money raised would be reinvested in climate mitigation and adaptation efforts such as expanded public transportation, subsidized home insulation, and improving forest health.

The tax would increase consumer costs for heating oil, petrol, and electricity in areas not served by hydropower, which is a major energy source in Washington.

The governor’s office estimates that by 2020, electricity prices could increase 4 percent per unit, natural gas 9 percent and gasoline 6 percent per gallon.

The governor’s office said such price increases “are well within the range of normal price fluctuation for oil and gas, and normal rate increases for utilities”.

Inslee’s office said the tax would raise $3.3 billion in its first four years.

“We are still reviewing the details, but, yes, we think the policy gets the big pieces right and we are broadly supporting it,” Carbon Washington Executive Director Kyle Murphy told the Thomson Reuters Foundation.

The grassroots group led the signature drive to put the failed 2016 carbon tax initiative on the ballot.


Others grassroots climate groups are more cautious, however.

Front and Centered is a coalition of communities of color seeking climate justice. Many of the groups represented by Front and Centered opposed the carbon tax initiative that made it to the 2016 ballot because it did not reinvest the revenue raised by the tax in their communities.

Instead, the tax money would have been offset by tax cuts, with only 10 percent of Washington residents receiving assistance to pay higher energy and fuel prices.

“We support Governor Inslee’s ongoing leadership, as well as the idea of taxing carbon and reinvesting revenue,” Front and Centered spokesperson Aiko Schaefer told the Thomson Reuters Foundation.

But “we would like to see the bill strengthened in terms of ensuring that communities that are highly impacted both have greater investment and have a voice in the process,” she said.

According to a 2016 study by the Yale Program on Climate Change Communication, over half of all Republicans and nearly 90 percent of Democrats in both Washington and Oregon states believe in global warming, which is above the U.S. national average.

Both states voted for the Democratic presidential candidate in 2016 by wide margins and currently have entirely Democratic majorities in their state legislatures as well as Democratic governors.

“I believe we have to pay for our waste,” said handyman Ed Dep, sitting at a café in a Seattle co-operative grocery store. “Mitigating climate change is a cost we should be willing to pay.”


As the details of carbon pricing enter the negotiation phase in the Washington and Oregon legislatures, lawmakers can look both north and south for lesson learned.

British Columbia’s carbon tax of 30 Canadian dollars per ton, the continent’s first when it was adopted in 2008, has reduced emissions by 5 to 15 percent while not hampering economic growth, according to a Duke University and University of Ottawa study.

California’s cap-and-trade system, introduced in 2013, had a rocky start but has now sold out its pollution allowances for consecutive quarters, prompting critics to suggest it has been too successful as polluters buy up credits rather than aggressively reduce emissions.

Inslee previously tried a cap-and-trade system such as the one Oregon is now pursuing, but abandoned it in favor of a carbon tax.

Environmentalists tend to prefer cap-and-trade because such systems fix the total amount of carbon emissions allowed and that amount can be lowered over time.

Business groups tend to prefer carbon taxes because the price of pollution is fixed, whereas prices for emissions can fluctuate in a cap-and-trade market system.

Whatever the system of pricing carbon, climate justice activists say they want to make sure one principle is adhered to.

“We don’t want to make people poorer in the process,” Schaefer said.