Inslee’s State of the State calls for action this session to put a price on carbon

Following the Legislature’s successes tackling transportation and education, Inslee says it’s now time to turn attention to acting on carbon pollution

Gov. Jay Inslee today delivered his 2018 State of the State address, a speech that highlighted Washington’s strong economy and best-in-the-nation business climate saying “our economy is strong, our future is bright, but there are always new heights to reach, new challenges to overcome and persistent wrongs to right.”

Gov. Jay Inslee entering the House chamber to deliver his 2018 State of the State address on Jan. 9, 2018. (Official Governor’s Office Photo)

Inslee called on legislators to “forge a prosperous path for the next generation.” He laid out a series of measures he hopes legislators will act on in the 60-day session:

  • fund the final step of McCleary in time for the 2018–19 school year;
  • expand youth apprenticeship opportunities and career-connected learning;
  • approve an overdue capital budget necessary to fund hundreds of crucial projects related to school construction, housing, mental health and more;
  • expand access to democracy by passing voter rights and registration bills;
  • protect net neutrality;
  • expand women’s health care rights;
  • ensure Dreamers’ abilities to pay for college are not damaged by Congress’ refusal to renew their deferred-action status;
  • ban bump stocks, close the background-check loophole on semi-automatic rifles and require safe storage of firearms;
  • and put an end to the state’s death penalty.

The governor then turned his attention to an urgent crisis he says the Legislature has yet to tackle — climate change.

“The Legislature recognized this threat a decade ago when it pledged to the people of Washington that we would make our air cleaner and reduce carbon pollution,” Inslee said, referring to legislation passed in 2008 that set specific targets for greenhouse gas emissions. “But unless we act now, that promise will be broken.”

Gov. Jay Inslee delivers his 2018 State of the State address in the House chambers in Olympia on Jan. 9, 2018. (Official Governor’s Office Photo)

Inslee pointed to the Legislature’s work in recent years to tackle transportation and basic education funding as evidence it is now ready to take on its obligation to make Washington’s air cleaner and reduce emissions.

“Now is the time to join in action and put a price on carbon pollution. Doing so will allow us to reinvest in all the things that drive down emissions… and by doing these things, we can save our forests. We can help rural economies. We can protect our waterways.”

Inslee’s carbon tax proposal: drive down emissions and reinvest in creating clean-energy jobs

Carbon pricing is in place in about 60 countries and other jurisdictions around the world covering half of the global economy, and is being implemented by a growing number of U.S. states. Ten states currently have carbon pricing or cap-and-trade measures in place, including California. Six states — including Washington and Oregon — are currently considering proposals.

Inslee’s proposal announced today ends the unfettered release of carbon pollution by setting a price on carbon emissions. Under his proposal, more than 75 percent of the carbon tax would be reinvested in a range of emission-reducing and job-creating programs such as helping more people pay for energy-saving insulation in their homes, incentivizing further use of electric vehicles and buses, building more solar panels, supporting development of other clean energy technology, as well as updating irrigation and water management systems.

Emissions generated by transportation fuels and power plants would initially be taxed at $20 a ton, starting July 1, 2019. The tax rate would increase annually by 3.5 percent plus inflation. The tax would generate an estimated $1.5 billion in new revenue over the first two years and an estimated $3.3 billion over the next four years.

The four primary areas of carbon reinvestment include:

  • Energy transformation: Fifty percent of the revenue would support clean energy and transportation programs to bolster Washington’s already strong clean energy economy. Examples include grants to purchase electric buses and electric vehicle charging stations, expansion of production of renewable transportation fuels, and residential and utility-scale renewable energy.
  • Water and natural resources resilience: Thirty-five percent of the revenue would pay for improvements to Washington’s flood management and stormwater infrastructure, irrigation systems and culverts, and forest health.
  • Transition assistance: Fifteen percent of the revenue will help lower-income households and vulnerable communities transition to a clean energy economy, including making their homes more energy efficient to help lower their energy costs and help workers transition to a low-carbon economy through job training and other assistance.
  • Clean energy investment: Electric and natural gas utilities will be eligible for a tax credit based on their investments in measures and policies that reduce their emissions such as additional EV infrastructure, use of renewable energy, or development and commercialization of emission-reducing technologies. Funding would also be provided to help low-income customers pay their energy bills.

Inslee has been working with legislators and leaders from the business, labor, tribal and environmental communities to craft a Washington-focused program that tackles climate change and establishes Washington’s leadership role in the growing decarbonized, clean-energy economy.

The question is no longer whether the time is right to fight climate change, but how.

Even Republican leaders are expressing an openness to carbon pricing and action. Minority House Leader Dan Kristiansen announced last week his members are working on a carbon proposal of their own.

Growing support for a carbon tax

“We appreciate Governor Inslee’s collaboration and inclusion as Washington state sets the course toward a better energy future. PSE is committed to doing our part, which is why we set a target last fall to reduce our carbon footprint 50 percent by 2040. Reaching our full potential will require policy changes this year at the state level to update our regulatory environment and put a price on carbon, and Governor Inslee’s action today is an important step forward. We look forward to working with the governor, legislators and other interests to make the 2018 session the turning point for Washington state’s energy future.” — Kimberly Harris, Puget Sound Energy president & CEO

“We are fortunate that Washington, with its abundance of renewable hydropower generation, is already among the cleanest states in the country, but that doesn’t mean we can’t do more. Legislation that appropriately balances the interests of our customers, the economy, and the environment can effectively get us there. Under the Governor’s proposed climate change legislation, electric and natural gas utilities will have the ability to invest the carbon tax. Avista welcomes the opportunity to work with the Governor and the Legislature on an approach that supports our customer’s needs, creates technological advances, and considers the economic impact, even beyond the state’s borders, with the goal to improve our environment.” — Dennis Vermillion, president, Avista Corp.

“It is our shared duty to ensure that our lands and waters remain healthy and productive — supporting Washingtonians not just today, but far into the future. That starts with setting policies that effectively reduce carbon pollution. I applaud Governor Inslee and state legislators for taking up the issue of climate change. I look forward to working with the Governor and Legislature to advance legislation that reduces carbon pollution and strengthens our lands and waters, making them resilient in the face of climate change.” — Hilary Franz, Commissioner of Public Lands (Read her full statement here)
“There is growing consensus around the world that a modest price on carbon to invest in renewable energy is not just smart environmental policy but a responsible strategy for business and governments to tackle climate change together. The 2018 Legislature is working hard to negotiate a thoughtful, bipartisan approach and send a well-crafted bill that works for our state for years to come to the governor’s desk.” — Sen. Reuven Carlyle
“The governor’s proposal is one of several efforts on multiple fronts to reduce carbon pollution and mitigate the effects of climate change on our state’s people, communities and economy. I believe the Legislature is better suited to pass a carbon tax proposal than the initiative process, and the support from the business community on getting something done this year is encouraging. This will hopefully generate bipartisan support in both chambers to take the kind of action the public has been calling on legislators to take.” — Rep. Joe Fitzgibbon
“Today is an important day in Washington state’s path to a clean energy future. Governor Inslee has placed climate action at the top of the priority list for the Legislature this year by proposing a climate policy that cuts carbon pollution and accelerates the growth of clean energy jobs. While we are already experiencing climate impacts here at home, we also know there is a still a window of time to stop making it worse and build a bright future for us all. There is an urgent opportunity to act and to pass an effective and equitable climate policy in 2018.” — Vlad Gutman-Britten, Washington State Director for Climate Solutions.