On May 19, Gov. Jay Inslee joined his West Coast colleagues Jerry Brown of California and Kate Brown of Oregon in committing to a 35-year plan to achieve an 80 to 95 percent reduction below 1990 Greenhouse Gas (GHG) emission levels in his state of Washington. The Memorandum of Understanding (MOU) represents a first-of-its-kind agreement between 12 U.S. states and countries around the world. It’s the type of goal nobody can disagree with: aspirational, values-driven, and utterly detached from a road map to accomplishment.
It’s worth noting that Washington’s current GHG reduction goal for 2050 is 50 percent below 1990 levels. So, the governor is pledging to increase our level of ambition by at least 60 percent (50 percent below 1990 levels in 2050 under current law versus 80 to 95 percent below under his new MOU). He intends to do this through the following measures:
- Updating the state’s limits on carbon pollution to reflect the latest science
- Ending coal-fired electricity generation in Washington and reducing use of coal-fired power imported from other states
- Increased building energy efficiency and renewable energy
- More zero-emission vehicles, cleaner fuels and transit
- Establishing a cap-and-trade carbon pollution market program
The update to the state’s carbon limits seems innocuous enough as they already exist in law, but they’d need to be increased. On the second issue, he’s essentially taking credit for something already happening: the decommissioning of the only remaining coal-fired plant in Washington. The TransAlta plant in Centralia will see its first boiler shuttered in 2020 followed by the other boiler in 2025.
Items three and four are already major parts of our existing carbon reduction strategies, which have contributed mightily to driving carbon emissions below 1990 levels already. On items one through four, you’d be hard-pressed to find any Washingtonian who wouldn’t embrace a call to continuously reduce air emissions and find collaborative ways to empower people to do their part. It’s the Washington way.
That leaves a “carbon pollution market program,” which continues to be the one hammer in the governor’s toolbox of carbon reduction solutions. Unfortunately, his proposed cap-and-trade system has generated almost no support in the Washington State Legislature, and we don’t expect him to be selling an 80 percent reduction proposal anytime soon. Why? It’s simple economics, as described by his own Office of Financial Management (OFM).
During the governor’s Carbon Emission Reduction Taskforce process, OFM economists presented their analysis on what it would require to meet the current law goal of a 25 percent reduction in GHG emissions by 2035. Their analysis shows that the price of a gallon of gas would have to increase by $0.51 by 2020 and $1.47 by 2035 above price projections. Natural gas would increase by 23.1 percent by 2020 and 59.3 percent by 2035 above price projections. Remember, however, that current law targets are 60 percent below his new MOU. So, the impact to families, farms, and employers would be felt well beyond even these dramatic price increases.
The energy price increases the governor would need to mandate in order to meet the projected reduction targets in his MOU would dramatically constrain job opportunities. Energy Strategies modeled OFM’s “high-price scenario” (Figure 22) that was presented at the CERT meeting last fall to analyze the impact to employment. Their conclusion was that driving the cap and trade price to the level OFM suggested to meet current law targets would result in 242,141 fewer Washington jobs annually than under baseline projections. In manufacturing, particularly, you simply cannot drive up energy prices by over 20 percent and not drive down investment in Washington.
This is not lost on the governor. Despite his assertions that his cap-and-trade bill would only hit “big polluters,” OFM said it would immediately increase the price of gas by $0.12 per gallon. If that proposal is having a hard time winning support, surely his MOU to increase that by a factor of four will as well.
All of these declarations make for good press releases, but what do they really accomplish? There is so much more that Washington is doing and will continue to do to lead in the area of carbon reduction, and there is a broad coalition of stakeholders willing to build support for those policies. We wish the governor would spend more time carving a pathway to a bipartisan consensus on carbon reductions here at home, and spend less time making international declarations.