Clean fuel standard, ‘cap-and-trade’ proposals pass state Senate late Thursday

OLYMPIA – The Washington State Senate passed Thursday two controversial climate proposals that aim to reduce carbon emissions in the state: a “cap-and-trade” bill and a clean fuel standard.

Both bills have been proposed by Democrats and Gov. Jay Inslee for years, but neither has made its way through the Legislature. They’re both pieces of what Senate Democrats call a “grand bargain,” which ties proposals that reduce carbon emissions to a transportation revenue package that funds new highways, roads and green energy initiatives.

The cap-and-trade bill, which passed 25-24 after a six-hour debate on more than 40 amendments, would put a cap on greenhouse gas emissions and force companies that cannot meet that cap to purchase carbon allowances from the state.

Four Democrats voted against the bill.

Bill sponsor Sen. Reuven Carlyle, D-Seattle, said the proposal is “good economics and good environmental policy.” It looks at effects of carbon on the environment, as well as the effects on people most harmed by climate change, he said.

“It is a profoundly serious endeavor that this legislation embarks on,” Carlyle said on the floor.

It would put a cap on emissions from large polluters by 2023. Companies who cannot meet the cap can purchase carbon allowances from the state. The revenue from those allowances would fund projects resulting in “long-term environmental benefit and increased resiliency to the impacts of climate change,” according to the bill.

Supporters say it will provide cleaner air across the state by reducing carbon emissions from the largest polluters in the state while generating some revenue for the state to spend on projects that could improve the environment.

Supporters also say it would invest in programs that would help those disproportionately affected by climate change, including people of color and low-income earners.

Opponents say the bill could result in working families paying more for fuel, electricity or food. Large corporations, they say, could find ways to avoid paying large fees.

“There is not a single person today in the state of Washington who will not be affected,” said Senate Minority Leader John Braun, R-Centralia.

An amendment proposed by Braun would have implemented a carbon pollution tax instead of the cap-and-trade program. It would have started with a $15 tax per metric ton of greenhouse gas emissions on the sale or use of fossil fuels in the state.

Republicans said this amendment would have broader support from business and corporations, but Democrats said the tax would not be enough.

Tax reform should be on the table, Carlyle said, but a carbon tax alone would not effectively reduce carbon.

“This is a climate bill, not a tax bill,” Senate Majority Leader Marko Liias said.

Opponents also argued it has negative effects on manufacturing and farms, which could see loss of jobs or increasing costs. Sen. Perry Dozier, R-Waitsburg, said the proposal could have harmful effects on farms in Eastern Washington because it could drive up costs for many small farmers who use a lot of fuel.

Sen. Mark Schoesler, R-Ritzville, criticized the passage of the bill in a statement, saying farmers in the state use large amounts of fuel to produce crops and move them to market or ports.

“Farmers and growers are price takers, not price setters, which means they’ll be hurt by higher fuel prices,” he said. “This bill will be very bad for ag, no question about it.”

The clean fuels standard bill passed 27-20 after a late-night debate. It aims to use progressively cleaner transportation fuels in the state, including those used in cars, trucks, boats, trains and aircraft.

If enacted, it would reduce overall greenhouse gas emissions from transportation fuel by 20% by 2035, according to the bill. To do so, the bill would incentivize the creation of alternative fuels in the state and penalize producers of transportation fuels that don’t meet the standards.

Similar to the cap-and-trade bill, opponents say it would result in an increase in gas prices. Supporters say that in California and Oregon, which also enacted these standards, those price hikes didn’t happen.

Inslee has tried to introduce both proposals for years, but they have never received enough support in the Legislature. He told reporters Thursday both the cap-and-trade and the clean fuel standard proposals would bring Washington in line with the rest of the West Coast.

“We need climate action this year,” he said. “We can’t run or hide from it. We have to defeat it.”

Senate Democrats are trying to keep both the clean fuels standard and the cap-and-trade proposals tied to a new transportation package.

Last week, the Senate Ways and Means Committee attached an amendment to the clean fuels standard bill that requires at least $500 million more every two years for transportation before the new standard could go into effect.

That new funding could come from a new transportation package, written by Sen. Steve Hobbs, D-Lake Stevens. His plan looks to spend $17.8 billion over the next 16 years on new investments in highways, roads and green energy initiatives. To do so, it uses some money from the cap-and-trade bill, as well as a 9.8 cent gas-tax increase and other taxes and fees.

For Spokane, that package could mean finally funding the long-awaited Division Street Bus Rapid Transit system. The proposal currently has $50 million set aside for the project for the next 16 years.

But that package only passes if both the cap-and-trade and low carbon fuels standard proposals do. While they’ve now passed the Senate, they might not be as lucky in the House, where leaders have already indicated it could be too late in the game for such a large package to pass.

The last day of the session is April 25, just over two weeks away.