Washington Gov. Jay Inslee wants a cap and trade. A bill that would establish a carbon market was the centerpiece of his climate agenda, but it didn’t even make it out of the Democrat-led House. Stymied by the Legislature, Inslee’s dumping the “trade” part of his plan in order to use his executive authority. This week, he instructed the state Department of Ecology to establish a carbon cap that would cut emissions 50 percent from 2008 levels by 2050, a target passed by the Legislature.
The carbon cap sounds like a desperate move from a governor whose environmental reputation thus far has been based largely on rhetoric, not measurable action. “This is not the comprehensive approach we could have had with legislative action,” Inslee said in a press release. “But Senate Republicans and the oil industry have made it clear that they will not accede to any meaningful action on carbon pollution so I will use my authority under the state Clean Air Act to take these meaningful first steps.”
The announcement is vague, but its intent is clear. No specifics were laid out; all we know is that Inslee’s administration is getting started on a carbon cap, and it’ll spend the next year figuring out how to do it. What is not vague is the basic difference between a cap and a cap and trade — one doesn’t involve trade. “Unlike the legislation that Inslee proposed to the 2015 Legislature,” the release says, “the regulatory cap will not charge emitters for carbon pollution and therefore would not raise revenue for state operations.”
Read it like a warning: Set up a cap and trade, Inslee’s telling the Legislature, or I’ll establish a cap that taxes businesses and fails to raise any state revenue. The carbon tax will happen either way, so the state might as well get some cash out of it.
It’s a change in strategy for Inslee, who has largely been strong-armed by a Legislature that doesn’t share his environmental priorities. Along with the failed cap and trade, Inslee’s proposed clean fuel standards were killed by a “poison pill” in the $16 billion transportation package signed into law this year. Had Inslee enacted the fuel standards, about $700 million allocated to transit and bike infrastructure projects would have been shifted to the general transportation fund.
Reports have largely framed Inslee’s carbon cap announcement as a gotcha response to the poison pill, but clean fuel is just one method of lowering emissions, and it’s one that is already being embraced by some major polluters such as Boeing. Instead, Inslee’s trying to establish consequences for what is essentially a market failure — industry’s ability to expel carbon dioxide and other emissions into the air for free. In turn, he hopes, the Legislature will respond with a cap and trade like the one Inslee failed to advance.