After trying for more than a dozen years to impose a carbon tax in our state, legislative Democrats succeeded in 2021. That’s the now-infamous session which also gave our state a new income tax, the virtual decriminalization of hard drugs and the criminal-friendly restrictions on police pursuits.
At the time, Republicans warned the carbon tax would drive up energy costs. The new year brought a significant step in the rollout of the tax, and it seems we were right. Within the first three weeks of 2023, according to the Washington Policy Center (WPC), gas prices went up 25 cents per gallon in Washington compared to other West Coast states.
An even larger step in the implementation of the so-called “Climate Commitment Act” came a few weeks ago. It could end up raising gas by 39 cents per gallon and diesel by 47 cents per gallon, according to the WPC’s environmental-policy expert.
Gov. Jay Inslee recently denied any connection between the carbon tax he pushed and the rising gas prices in our state. That was to be expected. Anything but a denial would suggest Democrats were either ignorant or not completely honest about the effects of their policy.
Some background: The carbon tax was created by a Senate Democratic bill that basically requires companies to buy “greenhouse gas allowances,” sold at auction by the state, if they emit more than 25,000 metric tons of carbon dioxide per year.
The law was passed in 2021, but the first compliance period didn’t start until Jan. 1 of this year. That’s when gas prices started climbing in Washington but not in neighboring states. At the first auction, on Feb. 28, the state Department of Ecology sold off 6.18 million allowances — each worth one metric ton of emissions — at a final price of $48.50 per ton. That raised an estimated $300 million. The law allows four auctions per year, so this stands to take a huge amount of money from taxpayers.
A whole separate discussion could be had about the immense power this law gives to Ecology, and to an unelected state Environmental Justice Council that will get to make recommendations about spending the auction proceeds.
For now, let’s look at who will feel the most pain from this part of the Democrats’ climate crusade.
Common sense tells us what happens to the prices a company charges when its cost of doing business goes up. For the companies that were buyers during this first auction of carbon-emission credits, the collective cost of doing business in Washington just went up by around $300 million.
Having offered probably a dozen amendments to the carbon-tax bill — all rejected by the majority Democrats — I recall the debate that preceded the Senate vote in 2021. In what would have been among the last of his many articulate, no-nonsense speeches as a lawmaker, the late Republican Sen. Doug Ericksen summed up the consequences.
My former colleague from Whatcom County, then Republican leader on the Senate committee on environment and energy issues, said the carbon tax would produce no measurable reduction in carbon emissions at a global level. To understand the true effect of the tax, he added, follow the money.
“This legislation will raise billions of dollars from the people of Washington state. Now, who’s going to pay those billions of dollars? It’s not going to be the oil refineries, it’s not going to be the manufacturers, it’s going to be the people of Washington state who will pay through increased costs for their energy,” Senator Ericksen predicted.
For years, the governor and Democratic legislators claimed Washington’s tax code is “upside down,” or “regressive,” meaning lower-income people pay a higher share of their earnings to government in the form of taxes. They conveniently fail to mention how Democrats are responsible for that.
Senator Ericksen said the carbon tax would probably become the most regressive tax our state has. I agree.
Yesterday the AAA website that tracks fuel prices showed the average cost of a gallon of regular was above $4 in just four states. Washington, which has been at $4.24 for the past week, is among them.
The average in Oregon was $3.89, and $3.65 per gallon in Idaho.
Subtract state gas taxes (49.4 cents per gallon in Washington, 36 cents in Oregon and 32 cents in Idaho) and still, the average gallon of regular here cost 21.6 cents more than Oregon and 44.6 cents more than Idaho.
Governor Inslee has tried to claim the oil companies and the war in Ukraine are behind the latest rise in Washington gas prices. The AAA.com numbers suggest that’s disinformation. Otherwise, Oregon and Idaho’s pre-tax gas prices would have risen just as much.
The cost of living in our state is too high already. The carbon tax is making it even higher. We must do better.
Sen. John Braun, of Centralia, serves the 20th Legislative District, which spans parts of four counties from Yelm to Vancouver. He became Senate Republican leader in 2020.