Washington Governor Admits Carbon Tax Defeat

Gov. Jay Inslee couldn’t get the votes in time to pass one of his top priorities: a tax on carbon dioxide pollution. It would have been the first tax of its kind in the country.
by | March 2, 2018
Former U.S. Secretary of State John Kerry met with Gov. Jay Inslee in Olympia last month to help push the governor's carbon tax proposal. (AP/Ted S. Warren)

Even with the state Senate finally in control of his own party, Washington Gov. Jay Inslee still couldn’t find the votes for his long-hoped-for carbon tax, he said Thursday.

With the legislature wrapping up business next week, Inslee told the Associated Press that he didn’t have time to get the remaining “one or two” votes needed for passage. But he still touted the bill’s progress this year.

“I would consider this a sea change in the climate fight. It’s come a long way from where we’ve been. We’ve basically shown that carbon policy is within reach,” Inslee told the AP.

The Democratic governor, who has been called “one of America's leading climate evangelists,” has been pushing for ways to limit carbon dioxide pollution for years. So far, though, he’s had little success.

In recent years, Inslee focused on instituting a carbon tax. If Washington state had adopted one, it would have been the first place in the United States to impose a straight tax on the greenhouse gas emissions.

Other areas, such as California and several Northeastern states, use a cap-and-trade system to limit carbon dioxide pollution, but Inslee has advocated for a simple tax because it would be less complicated to administer.

But it has not been an easy sell politically. A carbon tax would, of course, raise the prices of gasoline, electricity and myriad other products that depend on burning fossil fuels when they’re manufactured. Raising the prices of goods is a sensitive issue in Washington, which has no income tax and thus relies heavily on sales taxes to fund its government. And anti-tax groups in the state are well-funded and well-organized.

Inslee’s carbon tax has stalled in the legislature previously, in part, because Republicans controlled the state Senate when Inslee took office in 2013. That left Inslee and other environmentalists to seek other avenues. The governor sought an administrative fix when he rolled out a Clean Air Rule that would have included emission fees for large polluters, but a judge struck that down late last year. In 2016, Washington voters rejected a ballot measure that also would have imposed a carbon tax. That proposal faced a steep climb, because even some environmentalists opposed it. The main dispute wasn’t over the carbon tax itself, but what to do with the revenue. The ballot measure would have used much of the revenue to pay for tax cuts and tax breaks for companies hard-hit by the carbon tax.

But the political landscape shifted last November, when Democrats took control of the state Senate. That gave Inslee and his allies a brief window to push through the carbon tax during this year’s short legislative session.

The idea did get some traction at first. It passed two Senate committees, and former U.S. Secretary of State John Kerry visited Olympia to push for the measure.

Even so, the sponsors changed the bill to make it more palatable to undecided lawmakers. Inslee had called for a tax of $20 per metric ton of carbon dioxide pollution, but that was scaled back to $10. (One car produces about 4.8 metric tons of CO2 a year; heating a home for a year yields, on average, 9.5 metric tons.)

With Inslee’s admission that the efforts in Olympia are stalled, some environmental groups are vowing to bring another carbon tax ballot measure before voters later this year.

“Climate action in Washington is coming,” Kyle Murphy, the executive director of Carbon Washington, said in a statement. “Opponents of this bill achieved little beyond a temporary delay in our inevitable trajectory toward a clean energy future. Carbon Washington will now focus its efforts on putting a price on carbon this year at the ballot or next year in the legislature.” The deadline for approving ballot measures is July 6.

Charles Komanoff, the director of the New York-based Carbon Tax Center, says the inaction in Washington state this year is disappointing but not fatal.

“We missed a chance to do something positive,” he says. “I don’t think that necessarily has to slow down parallel efforts in other states. I don’t think it will cast a long shadow. But if it would have passed, it would have opened the door. It’s a shame that the door is still closed.”

He says efforts are still underway to impose carbon taxes in Vermont, Massachusetts and the District of Columbia.

Both Vermont and Massachusetts are already part of the Regional Greenhouse Gas Initiative (RGGI), a decade-old cap-and-trade group in the Northeast that is on the verge of expansion.

But Komanoff says a carbon tax is a better approach, because, unlike RGGI, it would cover all industries, not just the electric industry. Plus, he said, it’s hard for businesses, innovators and even households to figure out what price they’ll pay for carbon dioxide pollution they cause under a cap-and-trade system, because those prices depend on many factors.

“We hope to get a beachhead somewhere in some state, with a carbon tax that will apply to all sectors,” he says. “We need a straight-up carbon tax with a price that people can wrap their head around and plan their investments around.”