A bill that would create a cap-and-trade program in Washington state cleared the Senate Ways and Means Committee on March 22 and is likely headed for a Senate floor vote, amid warnings from some legislators of harm to taxpayers and business.
Sponsored by Sen. Reuven Carlyle (D-36), PSSB 5126 received additional technical and policy-related amendments by the Ways and Means Committee before it advanced.
Among the most noticeable changes to the proposal is a provision that delays implementation of compliance requirements until a new transportation funding package of $500 million or more per biennium is enacted.
Although titled the Washington Clean Energy Transformation Act, Sen. Jim Honeyford (R-15) told colleagues that “we should probably call this the ‘Business Relocation Act.’ We’ve passed a capital gains tax, now we’re going to pass cap-and-tax. I have a rather large employer in the 15th district that says if these two pass the legislature he is moving to Idaho.”
The bill would have the state Department of Ecology set up a cap-and-trade program by 2023, with the first emission baseline compliance period between 2015-2019. Entities subject to the program would then be able to purchase allowances; the revenue generated from those auctions would be put into various accounts, including a new Forward Flexible Account which would only be spent on transportation projects or activities.
Other technical or policy-related amendments include:
- Excludes emissions from landfills until 2031;
- Increases the amount of offsets during the second compliance period from 50 to 75 percent, though Ecology would be allowed to reduce that if the offset supply is insufficient; and
- Adds additional criteria for defining an emission intense and trade exposed (EITE) employer, which would receive free allowances during the first compliance period.
Additional amendments added prior to the committee vote include one introduced by Carlyle pertaining to “economic leakage.” The added bill language says that “the state shall pursue the limits in a manner that recognizes that the siting and placement of new best in class facilities that provide for the displacement of more carbon-intensive processes is in the economic and environmental interests of the state of Washington.”
That amendment also includes other language regarding new facilities that generate more than 25,000 metric tons of carbon a year but would reduce overall global greenhouse gas emissions.
Recently Ecology denied necessary permits for a Kalama methanol plant because it would increase state carbon emissions but reduce overall global emissions.
Carlyle told colleagues that “I think there is a lot of value in stepping back and recognizing that there are strong indications that we can grow our economy but do so with less of a carbon footprint.”
But Sen. Mark Schoesler (R-9) remarked that “if you’re the average taxpayer in the state of Washington…you’re getting hosed, plain and simple. I don’t think that’s good public policy.”
Also opposed was Senate Minority Leader John Braun (R-20), who argued that the program would mostly affect counties outside of the central Puget Sound region and “in districts presented by the minority. These facilities that are going to pay in this system provide the very foundation for our communities. It shouldn’t be surprising that we’re concerned about this. We have real, genuine concerns about what this is going to do to our local economies.”
PSSB 5126 has been referred to the Rules Committee.