Ballot initiative would undo Washington’s landmark climate law

Washington and Oregon voters have already begun casting their ballots in the November general election. In Washington, the statewide contests include races to elect a new governor and attorney general and four ballot measures, including Initiative 2117.

If approved, it would repeal Washington’s landmark law targeting greenhouse gas emissions, the Climate Commitment Act. The law established a cap-and-invest program, which requires refineries and other large polluters to purchase allowances equal to the carbon emissions they generate, while phasing out emissions by 95% by 2050. More than $2 billion has been raised since the law took effect last January to fund programs ranging from making transit free for youth to expanding EV charging infrastructure.

Let’s Go Washington, the group behind I-2117 and other state measures on the ballot this year, claims the law creates a “hidden gas tax” for consumers and is to blame for the state’s high gas prices. Let’s Go Washington is largely financed by Brian Heywood, a hedge fund manager who has questioned the wisdom of cutting carbon emissions.

Joining us to debate I-2117 are Washington state Sen. Joe Nguyen , a Democrat who represents the 34th District and is chair of the Environment, Energy & Technology Committee, and Todd Myers, vice president of research at the Washington Policy Center.

Note: The following transcript was transcribed digitally and validated for accuracy, readability and formatting by an OPB volunteer.

Dave Miller: From the Gert Boyle Studio at OPB this is Think Out Loud. I’m Dave Miller. We turn now to a debate over Washington’s Initiative 2117. If approved, it would repeal Washington’s Climate Commitment Act (CCA), which the legislature passed three years ago. The law established a cap-and-invest program, which requires the state’s 100 largest carbon emitters to purchase allowances equal to the emissions they generate, while phasing out emissions by 95% by 2050. More than $2 billion has been raised since the CCA took effect in January of 2023. That money will be used to fund a variety of programs, ranging from making transit free for youth to expanding EV charging infrastructure.

Let’s Go Washington, the group behind the repeal effort, claims the law creates a hidden gas tax for consumers and is to blame for a rise in state gas prices. The “No” on 2117 side says that repealing the law would blow a hole in transportation funding, and torpedo the state’s chances to make meaningful emissions reductions.

Todd Myers supports the initiative. He is the vice president of research at the Washington Policy Center. Joe Nguyen joins us representing the “No” side. He is a Democratic Washington state senator from White Center, and the chair of the Environment Energy and Technology Committee. Gentlemen, it’s good to have both of you on the show.

Joe Nguyen: Thank you for having us on.

Todd Myers: Thanks, Dave.

Miller: Joe Nguyen, first – can you just explain briefly how the Climate Commitment Act works?

Nguyen: Yes. So, first off, obviously we believe that climate change is real, and we believe that we have to take action urgently for us to mitigate the worst harms that are impacting us right now as well. We’re seeing wildfires, we’re seeing extreme heat, we’re seeing droughts. And want to make sure that we have the resources for us to actually ensure that we mitigate the harms that are happening right now.

So the way that the Climate Commitment Act works is that there’s a cap-and-invest program. It’s a market-based mechanism for us to cap how much emissions are being emitted through Washington state. And then through an auction, those who are obligated under these caps can have a market based mechanism for them to be able to purchase allowances, which we then use to help decarbonize sectors as well. And the goal is that it requires folks to decarbonize over time. And with the resources, we can help folks do that and achieve progress. This is modeled after policies in various jurisdictions internationally, and then also with California as well.

We believe that this is the path forward for us. We’ve tried a number of things. I don’t think that it’s going to be perfect off of the bat because solving climate change is very difficult. But it is a good start for us in Washington state.

Miller: Todd Myers, the central argument of your campaign to repeal this law is that it has increased gas prices for Washingtonians, and other prices as well associated with fuel costs. What do you base that argument on?

Myers: Well, I think I can base it on the fact that people listening to you right now who are in Portland aren’t crossing over to Vancouver to fill up their gas tank. We know that CO2 tax is a tax on gasoline, diesel and energy. That’s the purpose. The purpose is to drive up the cause of CO2 emissions and gasoline so that people choose alternatives. This is what we’ve seen in California. California admits this. The California Legislative Analyst Office says that their CO2 tax, which is similar to Washington’s, has driven up costs. Indeed, the minute that the CO2 tax in Washington state was implemented in January of 2023, the gap between Washington and Oregon’s gas prices immediately started to increase. They were basically the same in December of 2022. They jumped up to about 40-45 cents a gallon more in Washington state last year.

The data are very clear. The math is very clear. Everybody admits it, except during campaign time, when they want to say that it doesn’t. But it’s not just that they have been dishonest about the cost, they have also been dishonest about the benefits. And so the argument is that we need to have these taxes, and have this revenue to fund projects that reduce CO2 emissions and fight climate change. But the money is being wasted on things that don’t actually reduce CO2 emissions ...

Miller: I want to take these one at a time. I want to first stick with the first half of that, the cap side.

So Joe Nguyen, first of all, why not say “yes, this is increasing gas prices to some extent, but it’s worth it overall”?

Nguyen: So I’ve never denied that there’s an impact on fuel prices … for me, personally. What I will state is that gas prices before the CCA, in effect, was $5.20. Right now it’s about $3.89, the average price is in Washington state. So it’s significantly less than what it was before the CCA was in place.

My point has always been, and you can see this in testimony and Todd’s been there, is that there are a number of things that impact the price of fuel in Washington state, specifically OPEC being one of the main drivers. So part of the problem that we have right now is that we’re basically held hostage by a regime in OPEC and others, where we can’t control the cost of fuel because of the global implications that it has.

What we can control is giving people the opportunities and options to free themselves from that burden potentially by having an EV having, an E pump, having energy rebates. Most of the resources in the CCA goes towards alleviating the transition for a just economy as well. Oftentimes, when you see policies like this in the past fail, it’s because they don’t take into account the people that are impacted by it. Most of the investments, and Todd will point out that he doesn’t think that it impacts, carbon emissions, part of it is because we’re trying to help impact the people who are impacted now, whether you’re a tribe, whether you’re a small business, whether you’re an individual who has high energy costs, we want to be able to mitigate those. They may not have a direct nexus with decarbonisation. But that’s on purpose, because people are impacted by these policies and we have to ensure that they’re being addressed.

Miller: So Todd, to go back to you, what about Joe’s overall point here that this is a process of transition, and if you don’t like volatile gas prices, you don’t like the idea that it’s going to be over $5 when Russia invades, in a full scale way, Ukraine, then this is a way to actually get us away from that up and down, off and up of gas prices?

Myers: Well, the issue is, first off, that they have been dishonest about the impact. In 2023, they denied that it was actually having an impact. I’m glad that Senator Nguyen is now saying that’s true. Last year, he said that the reason prices went up were because a pipeline in the Olympics was shut down …

Nguyen: That’s a factual statement by the way.

Myers: There is no pipeline in the Olympics. What you said, it was “a pipeline in the Olympics.” There is no pipeline in the Olympics. It is the Olympic pipeline. And when you said that, it had been opened for three weeks. So you have, like the governor, said that the impact would be pennies have tried to hide the cost of this.

So yes, now you admit that the cost is high. Ok. That’s fine, I appreciate that, you are unlike others in admitting that there is a very high cost. Now, the question is …

Nguyen: First off, that’s not true. I said that there’s an impact. And also, we were on a show together Todd, a year ago, and I said this exact same thing. And I’m sorry if it’s an Olympic pipeline versus in the Olympics – that’s causing the hiccup. I don’t think that’s actually the issue that you’re facing right now. The initiative would fundamentally alter our ability to actually address climate change. So there’s one thing about …

Myer: I know you like to filibuster, let’s address that. That was where I was going when you interrupted me. So does this actually address the transition and CO2 emissions?

Nguyen: Yes.

Myers: The answer is no. For instance, in the initial bill, there was no money that went back to deal with the high cost of energy. That was only added this year, there was a $200 rebate, a one year, election year rebate. And in fact, one utility said we don’t need to send this out to our customers because we’re already getting more than this. The Department of Commerce said no, these checks have to go out before the election. They were designed to influence the election. Are those checks being sent out next year? No. So the relief that you talk about, or that you claim exists, is an election year thing. That’s absolutely true …

[Talking over each other]

Miller: Joe, let’s give you a chance to respond. Todd Myers, we heard your point … Joe Nguyen, your turn.

Nguyen: So first off, there’s consigned revenue in the bill specifically for energy mitigation. We did additional work to make sure that people were being kept whole because of the impacts that we were seeing. That’s how policies work. I don’t have a crystal ball. We don’t know how to actually solve climate change perfectly because it’s never been done before. So we do the best that we can and refine as you go along.

And that policy that you’re speaking of, it’s ironic that you think that it was done too fast, because most of the arguments that you made is that it’s not fast enough. This is how the process works. We find a problem, we fix the problem. The money was allocated in July. All programs, as best as they can, get it out during this time period. So that’s not nefarious by any means. But I’m happy to ensure that folks get the relief that they need as well.

Thirty-five percent of the funds from the Climate Commitment Act has to go through overburdened and marginalized communities, and 10% has to go through tribes. Built into the whole process is how to ensure that people’s harms are being mitigated as best as we can. So that’s fundamentally not correct in terms of what you’re saying is that they’re now just trying to help people out. I actually feel that we have a good start. Like I said this program, it’s not perfect, but I do think that we have a standard that other people are now seeing that they could potentially utilize as well. And I think that’s what scares a lot of the detractors from the policy. You have a lot of entities that profit from the current system and they don’t want to see it spread. They know that if we are able to achieve our climate goals, then there are certain legacy systems that are impacted by that negatively in a financial manner.

So we feel very strongly about this policy. The people who aren’t generally benefit from the current system. And there’s no solution that they’re proposing to actually help solve climate change. So we’re going to keep moving forward to address this very major issue, despite the rhetoric that we’re hearing right now.

Miller: Todd Myers, let me turn to that. First of all, do you want to see state action of any kind in terms of greenhouse gas emissions? And if so, what would you like to see the state do?

Myers: In fact, I advocated for a revenue neutral carbon tax. And the reason we need a revenue neutral carbon tax is to give money back to people so that they are not harmed, rather than playing politics with the money. As I said, the $200 rebates were not part of the original plan and they are not part of next year. The rebates are only given out when it is useful politically. And so that, I think, is the fundamental problem.

We do need to act on climate change, but we need to do things that are effective. And that has been another big problem with this. Joe says that it is entrenched interests that are fighting this. But in fact BP, one of the world’s largest oil polluters, has put $2 million into this. Why? Because they will profit. But who are suffering? Farmers across Washington state. The law promised farmers in Washington state that they would be exempt from the law. But the Department of Ecology simply refused to implement that, and they have paid $150 million, by our estimate, that they should not have paid. That, I think, is the fundamental problem, that the people who have written this are big corporations like BP, like Microsoft, who are profiting … and the people who pay for it are farmers. And despite what Joe says, the poor, the other folks who are paying these prices are not feeling the benefits of it. They are paying the costs. And the benefits are going to BP.

And what’s worst of all is that so many of the funds that they claim to help forest fires and other things like that actually go to more government staff. I say, the more concerned you are about climate change, the more frustrated you should be about the CCA, and the fact that the money is not actually going to reduce CO2 emissions, it’s going to more government expenditures. And again and again, when you look at the grants – like there’s a community decarbonization grant put out by the Department of Commerce using CCA funds. That grant specifically says that they will not measure the amount of CO2 reduced by the grant. When people look at this, they hear the rhetoric, they say “people are being taken care of and we’re fighting climate change.” But when you actually look at how the grants are spent, there are no metrics of success. There’s no requirement that CO2 be reduced. And the groups, like farmers who were promised that they would be taken care of, are left holding the costs.

Miller: Joe Nguyen, there’s a lot for you to respond to there. But the two big things – that the companies like BP are benefiting, and that groups like farmers are the ones who are being directly harmed – I’d like you to address both of those issues.

Nguyen: First off, again, it’s a market-based mechanism. The program that Todd would have proposed was a carbon tax. So that would have actually tax carbon, made your fuel more expensive, but there’s no actual obligation to decrease carbon emissions. That’s why it failed. That’s why it didn’t have enough broad support. That’s why I didn’t make it pass the legislature. That’s why I didn’t get passed through the initiative process in Washington state.

The difference between this one is that you have such a broad based coalition. You have environmental justice groups, you have low income advocates, you have farmers in certain respects as well, you have corporations like Microsoft, BP, Amazon. So the fact that you’ve seen this coalition being built to support the Climate Commitment Act, and to vote “no” on 2117, is because this was done over decades. This was done by talking to communities, by working with folks, by figuring out a path forward, by trying to make sure that we’re able to help people as much as possible.

Again, there is no perfect path. There’s no way for you to get a six pack and be healthy without working out and eating better food. This is hard work that we have to actually do, and that’s the process that’s being worked out right now. So in terms of BP potentially benefiting, I think BP is reading the writing on the wall and they understand that they have to decarbonize their infrastructure, and this is the best path for them to do it. Same thing with Amazon, same thing with the environmental justice groups, same thing with the community based organizations who want to see cleaner air and fuel for their communities as well.

Certainly, there will be people who are gonna be more progressive when it comes to fighting climate change, and the people who are not. I’m not gonna fault folks if they want to actually try to fix the problem versus be obstinate. But that’s my point, is that they’re trying to fix the problem. There is no alternative for the Climate Commitment Act that’s being brought forth by the opponents. And in fact, they’re saying that you cannot do anything in the future to either fix it as well. This is not a “hey, let’s try to solve climate change together.” This is “we don’t want them to solve climate change because it hurts our business, and therefore you can’t do anything.”

Miller: Todd Myers, I want to turn to the question of the budget implications of repealing this law, meaning a “yes” vote on this initiative. My understanding is the state is prohibited from using funds raised through the Climate Commitment Act directly to improve the state’s roads and bridges. But the legislature has based its overall transportation budget on future funding raised through this carbon marketplace that the law created.

So if this act is repealed, where do you think the legislature should make up the funding shortfall to fund transportation improvements, and ferry and transit services?

Myers: Well, we already have a budget. We already have a gas tax, those things are funded. The things that are funded in this, they are electric ferries, they’re not traditional ferries. So they are on top of everything else. That’s why the “no” campaign has been claiming that roads and bridges would be hit. They won’t have to be hit. And in fact, the state budget has a huge surplus. We have added nearly $20 billion to the state budget.

Additionally, I’d be interested to hear if Senator Nguyen is going to support the $1.3 billion that have been proposed for pay raises for state employees. What we hear all the time is that if the tax is cut, then we’ll have to cut roads and bridges and all these other things. But they won’t cut the $1.3 billion in pay raises. And that, I think, is fundamental to the discussion that we’re having here, is that the money is going to special interests and to political agendas, not to fighting CO2. You’ll notice that when they start “this is about fighting CO2 and helping adjust transition.” And then over time, what they say is, “yes, of course, it helps specific groups like BP, corporations and special interest groups.” And that, ultimately, is why the environmental community, and too many on the left, opposed a revenue neutral carbon tax, because it didn’t create a political slush fund.

That’s why I think people who truly care about climate change should be so frustrated about this. It is a political slush fund in the guise of environmental action. And so many of the projects don’t actually help climate change. They help political agendas. That’s why Washington state has failed, and missed every single one of its climate targets, because again and again, when the choice is between fighting climate change and doing things that are effective … like Microsoft is doing, the projects that they invest in are effective. We should follow that model. But we never do. We put politics ahead of the environment, and the CCA is a great example of that where we are spending billions on political agendas, not on actually reducing CO2 emissions.

Miller: Joe Nguyen, your response?

Nguyen: First off, I think workers deserve fair pay. I think our state workers are some of the hardest working people that we have. And they often work for salaries that are much below the private market. So in an argument where you think workers are the ones most harmed by this and you call out workers for getting a reasonable pay increase, I think that’s kind of suspect.

Also, you heard his response about what would you do in order for us to cover this gap? First off, there is not a surplus. We’re going to see this in this next budget cycle. So the idea that we raise gas taxes to then offset the revenue associated with this fundamentally raises the prices of fuel. So if their main argument is that this is going to raise fuel costs, and their solution is to raise fuel costs, that then seems to be counterintuitive. The fact that we’re able to actually do this in a way where … gas prices are lower now than they were before the CCA for a lot of reasons, but we also now have the tools and capabilities for us to actually mitigate some of these harms, and also move forward.

Because of the CCA – and by the way, it was done before the Inflation Reduction Act by the Biden administration – we have been able to unlock tens of billions of dollars in federal funding to help our communities to help our tribes to help our most overburdened communities that goes towards superfund, sites that goes towards folks who are most harmed, that does even go back towards farmers. What’s interesting is that we recognize that there was an impact on farmers as it relates to fuels. We put money in the budget last year to help cover what we thought would be that cost. That money hasn’t been fully subscribed. Farmers have not yet fully utilized that. So if it is an issue, we want to make sure that we solve it. But this is gonna be an iterative process. So the idea of taking away our tools to actually address climate change is a farce, and that’s why you should vote “no” on 2117.

The transportation package was the most progressive, thoughtful package for thinking as it relates to climate policies ever in Washington state. And that’s because of the CCA. So projects will be impacted by this, whether it’s subject to the gas tax or not. It’s because we have to be mindful of not just the current needs but the future needs of Washingtonians.

Miller: Todd Myers, if I may ask you a question. So cap-and-trade systems have been around for a while, not just for carbon emissions, but for things like the chemicals that led to acid rain or the hole in the ozone layer, and they have often been successful. Why not give this more time? It has been in effect for under two years now, why not let a few more years go by to see the data about the impacts, not just of the spending of the money that comes from it, but the potential carbon emissions that we simply don’t have the data from yet?

Myers: Well, in fact, cap-and-trade systems have a mixed record. As you mentioned, sulfur dioxide was good. But the cap and trade system under the Kyoto Protocol failed. The countries missed their targets. And the reason that they missed their targets is because it was a politically driven system and politicians changed the targets. And in fact, just less than two years in, Joe Fitzgibbon, who was one of the authors of it, has already talked about adding more credits and changing the targets. That’s the problem – the system is fundamentally political, and that it is used by politicians to achieve political agendas and reward interest groups, rather than reduce CO2 emissions. A flat CO2 tax with a rebate is a much better approach that targets CO2 emissions, and gives people an incentive to reduce them, without all of the money going to politics.

And the reason that you have people like Senator Nguyen saying “projects will be cut,” you notice that they change their language initially. They say “oh, roads and bridges will be cut.” But then it turns out that that’s false. So then they change their language. Initially, they said “oh no, it would only cost pennies.” But we know that’s [not] true. People in Portland, like I said, know that gas prices have gone up in Washington a lot. They don’t come over to Vancouver. People in Vancouver go to Oregon.

I understand that people want to fight climate change. I do too. But I want it to be effective. And the notion that you can trust people who have failed every time to reduce CO2 emissions, and who are promoting a system that is fundamentally political and targets politics, and has no metrics of success for CO2 reduction in the expenditures, that is just a fool’s errand. And what we’re going to find is that if you wait five more years, we’re going to have spent billions more dollars, and we’re still not going to be hitting our targets.

Miller: Joey Nguyen, last thirty seconds to you.

Nguyen: First off, thank you so much for having us on. What I’ll say, it’s actually very easy to complain. It’s very easy to say things are not working perfectly. As somebody who is in a position to help move the needle when it comes to climate policies, we’re doing the best we can with the best tools that we have as well. So the carbon process that Todd is describing, first off, doesn’t exist, it’s hypothetical. What we have now is the most robust and stringent climate policies in the world, for sure in the United States, helping us decarbonize. We’re seeing more homes with heat pumps. We’re seeing more people electrifying their EVs. We’re putting more money towards clean energy. We’re putting more money towards the workforce to help us get us there at the same time.

So from my perspective, we are fighting climate change with the best tools that we have possible. We’re doing it in a way that is mindful of not just the current impacts, but the historical harms that are being made as well. And we’re doing it by bringing a big tent together. I know that that’s kind of a political term. But the fact that you have labor, you have low income advocates, you have business, even oil companies want to be part of these conversations, is because they know that there’s something here.

So we’re going to move forward with climate policies that helps the majority of Washingtonians be successful. There’s always going to be an impact. It’s our job to make it as best possible as well. So thank you for covering.

Miller: Joe Nguyen and Todd Myers, thanks very much.

Myers / Nguyen: Thank you.

Miller: Joe Nguyen is a Washington state senator, a Democrat from White Center, chair of the the Environment, Energy & Technology Committee. He wants Washington voters to vote “no” on Initiative 2117. Todd Myers says vote “yes.” He is the vice president of research at the Washington Policy Center.

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