Courtesy Office of Gov. Jay Inslee
Washington state’s Climate Commitment Act requires polluting entities like oil refineries and power plants to pay for permits, or “allowances.”
Last week in Seattle, outgoing Washington Gov. Jay Inslee and California Gov. Gavin Newsom traded one-ups over which state had the most electric-vehicle adopters per capita. (No contest, it’s California, but Washington is number two.)
Washington, one of the most climate-forward states in the country, has been strongly influenced by the California experience. The Golden State was the first to launch an economy-wide price on carbon, putting its neighbor to the north in second again. But Washington is the first state to do so through its legislature. This past spring, state officials announced the intention to join California and Quebec in the Western Climate Initiative, after the launch of the state’s own cap-and-invest program, the Climate Commitment Act (CCA).
In effect for nearly two years, the CCA requires polluting entities like oil refineries and power plants to pay for permits, or “allowances,” in climate parlance. Sold at auctions held each quarter, the permits put a price on carbon from all of the state’s economic sectors.
But Inslee’s signature accomplishment is under siege. Which is why he has taken to canvassing, appearing at rallies, and inviting Newsom to join him in an effort to defeat Initiative 2117. That ballot question proposes to repeal the CCA, and prohibit any state agencies from establishing any future cap-and-invest or carbon-trading program.
It’s a strange development. The revenues from sales of the permits, some $3.2 billion, support a phalanx of programs in the 2023-2025 budget that Washington would otherwise be hard-pressed to fund. It’s a particularly vital source of funding for transportation to electrify its ferries, reduce and expand public transit lines and services, and build an electric-vehicle charging infrastructure and more. Schools, multifamily housing, and small-business needs are also recipients of the funding. The CCA also contains environmental justice components for locales that have been burdened by air pollution and climate change impacts. On the environmental front, dollars go toward preserving salmon and other fish habitats, preventing wildfires, and encouraging sustainable farming.
Those benefits could evaporate if voters decide to repeal the CCA.
“All of those programs would cease. Immediately,” says Democratic state Rep. Joe Fitzgibbon, the House majority leader. “This a major test of our climate ambitions.”
Without the CCA, the state would see a $4 billion shortfall in revenue over the next five years, and lose 45,000 jobs.
A mid-October online poll of adults and likely voters conducted by The Seattle Times, KING 5, and the University of Washington’s Center for an Informed Public found that 48 percent would oppose the initiative; 30 percent supported, but 22 percent were undecided. One-third of Republicans, who supported the initiative by three percentage points, were also undecided.
The CCA prods the worst offenders into devising strategies to reduce their emissions rather than pay higher prices for permits, or fines for noncompliance. The cap-and-invest program has been a fiscal boon for the state. Washington had already managed to lower emissions through initiatives like energy efficiency and renewable portfolio standards. But CCA goes a long way to put Washington on the path to achieving its net-zero emissions goals.
“You really have a hard time finding a ballot initiative with so much money on the line,” says Jonah Kurman-Faber, the founder of Greenlines Insights, a nonpartisan research consulting firm that published a Climate Commitment Act study in September. (Some of the report’s funders include organizations supporting a no vote, but the firm is not involved in the campaign efforts.)
In addition to energy transition funding, cap-and-invest revenues give Washington something else: leverage. Kurman-Faber explains that the state also uses CCA revenues to attract diverse investments to boost future economic prospects. In competitions for federal grant opportunities, for example, states can obtain $4.88 from Inflation Reduction Act and bipartisan infrastructure law programs for every state dollar allocated. This year, Massachusetts and Minnesota have appropriated money or specifically set aside funds in order to compete for federal dollars.
“The Climate Commitment Act is no different,” says Kurman-Faber. “The chances are a lot lower of securing these billions of dollars from [the federal government] without the [CCA] in place.” To attract private companies to start, expand, or relocate to Washington, economic development officials can also leverage the improvements it makes in the transportation sectors or its building codes.
Dispense with the CCA, and the state would see a $4 billion shortfall in revenue over the next five years, and lose 45,000 jobs. All told, however, the loss of federal, state, local, and private investments could total nearly $30 billion, compromise more than 250,000 jobs, and affect sectors like transportation and construction that have been instrumental in undertaking CCA-driven projects. “These are job-creating bills that are masquerading as climate policy,” says Kurman-Faber.
By his own admission, Brian Heywood, the millionaire hedge fund magnate behind the repeal, fled to Washington from California more than ten years ago to avoid taxes. (Washington has no state income tax.) Let’s Go Washington, his conservative political action committee, is for all practical purposes a one-man mission to eliminate or modify a number of state laws and regulations passed by the Democratic legislature, in a more pliable political environment than the one on offer in the Golden State.
He’s taken the stance that the CCA amounts to an illegal tax that has pushed the state’s gas prices higher, which feeds into the public’s wallet worries. He’s also maneuvered three other initiatives onto the 2024 ballot: a capital gains excise tax repeal, a requirement that employees opt in to a long-term care tax, and an end to measures designed to reduce reliance on natural gas.
The deciding factor for most voters may be the specter of even deadlier climate events.
CCA’s supporters have attracted a cornucopia of state organizations, nearly 600 in all, an effort the “No on 2117” campaign calls “unprecedented.” National, state, and local environmental groups oppose the repeal. So do Washington-based corporate behemoths Amazon and Microsoft, which have touted their own net-zero goals. BP, one of the state’s largest emitters, has said that it “supports economy-wide, market-based carbon pricing programs,” and opposes a repeal. Cascade PBS has reported that beyond BP, the state’s oil industry has been “neutral” on the CCA, perhaps realizing that the time to transition to a clean-energy economy is nigh and that the CCA is not a bad deal.
Over 50 small craft breweries also oppose the measure, including a Seattle brewery that released a “Time to Vote” IPA to support the no campaign. Twenty tribal nations, Black, Latino, and Asian groups, along with faith leaders, 200 health care professionals, and more than 35 labor unions have all urged a no vote.
The No on 2117 campaign has raised $11 million, and Heywood’s self-funded Let’s Go Washington about $6 million. Kelsey Nyland, spokesperson for the No campaign, finds that the harms that repealing the CCA would produce resonate with environmentally conscious voters, despite Let’s Go Washington’s catchy but deceptive message (“pay less”).
Fitzgibbon, the House majority leader, has long viewed a ballot box challenge to the CCA as “inevitable.” During the decade that the legislature worked on clean-energy and carbon-free initiatives, he says that there was considerable “resistance” from fossil fuel interests and “very loud” opposition from state lawmakers and voters, who defeated cap-and-trade plans in 2016 and again in 2018.
The broad support the CCA received in 2021, which “pleasantly surprised” Fitzgibbon, has expanded during the current campaign to include progressive environmental justice groups that opposed or were skeptical about the law and now appreciate CCA benefits.
The deciding factor for most voters may be the specter of even deadlier climate events. If intense hurricanes and tornadoes are the major threats on the East Coast, in the West it’s frequent wildfires and the smoke plumes they produce. “Washington voters can literally breathe, feel, and see the impacts of a changing climate,” says Nyland. “Even just five years ago, we would have never had a smoky summer or have a day that was hotter than 95 degrees.”
