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Inslee wants to limit carbon emissions, help with budget challenges

Arresting climate change is one of the governor's top priorities. Credit: Credit: Captain Kimo/Flickr

Gov. Jay Inslee unveiled his cap-and-trade program for controlling greenhouse gases Wednesday, saying it would raise money for education, transportation and poor families while also making Washington's air cleaner.

The plan calls for roughly 130 of Washington's biggest polluters to pay for permission to exude specific amounts of carbon emissions, which scientists have linked to global warming.

That approach is expected to raise $1 billion a year. Inslee called for that money to be divided into several chunks, including $400 million a year going to transportation projects to replace potential gas tax hikes. The governor wants another $380 million annually to go to education with the state's court-ordered improvements on student-teacher ratios to be the most likely recipient. Another $108 million would go to pay for a currently unfunded working families tax credit program with checks going to roughly 450,000 lower-class families. The remaining money, around $100 million, would go to businesses competing against out-of-state and foreign firms that don't face the same carbon-pollution restrictions.

Meanwhile, another controversial Inslee concept — installing a low carbon fuel standard on some the state' gasoline pumps — won't be detailed until after the 2015 legislative session is underway and after the state Ecology Department has studied that proposal some more.

Inslee painted his push for carbon controls as a matter of health for the young and future generations. “We recognize there will be alarmist attacks,” he said at a Seattle press conference. We should not be surprised.”

But he called for boldness: “We should overcome that fear and seize this moment of confidence and optimism."

Legislative Republicans have been leery for almost two years about any carbon emissions-related charges or taxes coming from Inslee

On Wednesday, Sen. Doug Ericksen, R-Ferndale and chairman of the Senate Energy, Environment &Telecommunications Committee, described Inslee's plan as using environmental issues to raise tax money for the state's general fund, which he believe is not appropriate. He said the targeted 130 facilities would pass their increased costs on to their customers. "The people of Washington are smart enough to know that corporate CEOs don't pay the taxes. It's the people of Washington who pay," Ericksen said.

Rep. Shelly Short, R-Addy and ranking Republican on the House Environment Committee, agreed. "Families and individuals will bear the brunt of the burden of his proposals as industries pass these new costs on to consumers,” Short said. “Those feeling the financial pinch the most will be low-income families who pay a higher percentage of their limited incomes on nondiscretionary expenses like fuel for their cars and energy to heat their homes. His policies show a serious disconnect from the free market system and basic economics 101."

Ericksen said the GOP could support some parts of Inslee's proposal not tied to any cap-and-trade system, such as a push to create more pollution-free technologies in the state.

Inslee expressed confidence that he can pick up enough Republican votes to get his proposal through the GOP-controlled Senate. "People have been looking at this through an ideological lens. I believe those days are passing. … They will find it better to tax polluters than motorists," Inslee said.

At an event earlier in the week, Inslee said the cap-and-trade proposal would eliminate the need for gas tax hikes of up 10 to 12 cents per gallon that various legislators from both parties have proposed in deadlocked talks to put together a roughly $12 billion package for transportation construction, operations and maintenance.

On Wednesday, Rep. Joe  Fitzgibbon, D-Burien and chairman of the House Environment Committee, said Inslee's proposal probably would not get a sure 50 votes in the House, the number needed to assure passage, if it were brought up this week. He said some legislators will remember a brutal, failed 2009 battle to get a cap-and-trade bill through the Legislature. And he noted that the oil industry will likely apply pressure on potential swing voters in the Legislature. 

Fitzgibbon said, however, that he can see a cap-and-trade package along the lines of what the governor wants passing the House after more discussions and debates.

Fitzgibbon and Sen. David Frockt, D-Seattle, see Inslee's proposal as a major piece in the final stages of the Legislature's overall budget talks, likely at the end of the 2015 legislative session. At that time, legislators will be haggling over finding money to pay for $1.04 billion in Supreme Court-mandated educational improvements, plus perhaps another $1.24 billion in voter-mandated school improvements from the recently passed Initiative 1351. Currently, the Legislature has identified no sources to raise that money.

At the same time, the Legislature will be tackling court-ordered mental health budget increases, as well as trying to find the money to pay for more transportation work. Inslee's proposal to charge polluters' $1 billion a year for carbon emissions rights could become a powerful bargaining chip in those budget talks, they said.

Inslee's cap-and-trade proposal would work like this.

By July 1, 2016, a total limit would be set on how much Washington's major polluters can give off in carbon emissions as a group. A major polluter would be a facility that exudes at least 25,000 metric tons of greenhouse gases a year. The state believes there are roughly 130 of these facilities. The last list was compiled in 2011 and the state would have to map out a new list by 2016.

Emissions from agriculture, waste management, biofuels and biomass energy would be exempted.

Corporations would bid on a metric-ton basis for enough of an allowance for their operations; no minimum bid figures have been calculated yet.

The statewide carbon-emissions limit would drop by roughly 2 percent annually, which is to force the facilities to work on their pollution controls. The idea is to reach statewide carbon emissions limits that the Legislature set in a 2008 law.  That measure set a goal of reducing the state's greenhouse emissions to 1990 levels by 2020, with further trimming of emissions to 25 percent below Washington's 1990 level by 2035 and to 50 percent below by 2050. So far, nothing has happened.

"It is past time to enforce the laws we have to reduce carbon pollution in the state of Washington,” Inslee said. “If we don’t act, we’re not going to meet our 2020 limit. We aren’t going to meet our 2035 limit. And we’re going to fall very, very short of our 2050 limit.”

When Nov.1, 2018 arrives, Inslee's plan calls for facilities to be able to trade, buy and sell parts of the carbon emissions rights they would purchase. After Washington's cap-and-trade system has settled in, the state would likely approach California, Oregon and British Columbia to link up with their cap-and-trade systems and create a Pacific Coast network, Inslee suggested.

Other facets of Inslee's clean-air plans unveiled Wednesday include seeking legislation to create incentives to own electric cars and to speed up the installation of high-speed charging stations for electric vehicles. He also wants to allocate $60 million to the state's Clean Energy Fund to help researchers, businesses and utilities to find extra money elsewhere to develop and deploy renewable-energy and energy-efficient technologies. In the 2013-2015 budget biennium, the then-$40 million fund leveraged $200 million in additional private money.

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