Washington Bill Would Open Up Possibility of Regressive, Harmful Cap-and-Trade Program or Carbon-Dioxide Tax

Research and commentary by Tim Benson

A bill introduced in the Washington House of Representatives would give the state Department of Ecology (DOE) the authority to create either a carbon-dioxide tax or cap-and-trade system, or both, in the Evergreen State. If passed, DOE could establish each program without any sort of legislative approval.

“Department of Ecology staff could create rules that covered companies that emit as few as 25,000 metric tons of [carbon dioxide],” writes Todd Myers of the Washington Policy Center (WPC). “In Washington state, that would include food producers like El Oro Cattle Feeders in Moses Lake and Lamb Weston in Quincy. It could include timber mills like SDS Lumber in Bingen and Vaagen Brothers in Colville. It would include semiconductor manufacturers and solar panel manufacturers.”

Washington voters have signaled their opposition to a carbon-dioxide tax multiple times in the past half decade, most recently with their thorough rejection of Initiative 1631 (I-1631) in 2018.

Carbon-dioxide taxes are inherently regressive and disproportionally harm low-income families. The Congressional Budget Office (CBO) found a $28 per ton carbon dioxide tax would result in energy costs being 250 percent higher for the poorest one-fifth of households than the richest one-fifth of households.

CBO reports the reason for cost discrepancy is “a carbon tax would increase the prices of fossil fuels in direct proportion to their carbon content. Higher fuel prices, in turn, would raise production costs and ultimately drive up prices for goods and services throughout the economy … Low-income households spend a larger share of their income on goods and services whose prices would increase the most, such as electricity and transportation.”

WPC estimated the carbon-dioxide tax that would have been established under I-1631 would increase average household costs $234 to $305 in the first year alone, and $672 to $877 per year after 2030. “Taxpayers would feel the tax primarily in three ways. First, the largest impact would be at the gas pump,” WPC states, noting prices at the pump would increase by 14 cents a gallon during the first year and increase by two cents a gallon each following year. “Second,” the report continues, “a smaller portion, on average, would be associated with the cost of natural gas for home heating. Finally, since Washington’s electricity is mostly carbon-free, there would be a smaller impact felt in most utility bills.”

2013 study by the National Association of Manufacturers estimates a $20-per-ton carbon-dioxide tax in Washington, a threshold that would be have been met in 2022 under I-1631, would result in a 15 percent increase in household electricity rates. Additionally, the price of natural gas would increase by more than 40 percent in the first year. The study also estimates a carbon-dioxide tax would push gasoline prices up by 20 cents a gallon in the first year alone.

One other substantial problem with the carbon-dioxide tax is that it would produce an insignificant environmental benefit, as Oren Cass, senior fellow at the Manhattan Institute, noted in National Affairs.  “The effectiveness of a carbon tax as a matter of environmental policy [depends] not only on how it would directly alter the trajectory of [local] emissions but also on its ability to affect global emissions by driving globally applicable technological innovation or by influencing the behavior of foreign governments,” wrote Cass. “On each of these dimensions, the carbon tax fails.”

Advocates of cap-and-trade schemes point to California and the 10 northeastern states that make up the Regional Greenhouse Gas Initiative (RGGI) as examples of how these programs can be successfully implemented. In reality, cap-and-trade programs do little to reduce carbon dioxide emissions. Even worse, they are akin to regressive taxes. Cap-and-trade programs disproportionally burden low-income households, who are less able to afford higher energy and gasoline costs that these programs are designed to produce.

According to the U.S. Energy Information Administration, retail electricity prices in the 10 RGGI states and California are currently 45 percent higher than the U.S. average. Thanks to its copious hydroelectric power sources, however, the Evergreen State currently has some of the lowest retail electricity prices in the United States at 8.0 cents per kilowatt hour. This rate is 23 percent below the U.S. average. Moreover, a 2019 WalletHub study reports that only Colorado has lower total energy costs than Washington.

Evergreen State lawmakers should not enact anything that would give DOE the authority to establish either a cap-and-trade or a carbon-dioxide tax. Both programs would have a minimal effect on carbon-dioxide emissions and both would cause considerable economic harm to all Washingtonians, especially low-income Washington families. 

The following documents provide more information on cap-and-trade programs and carbon-dioxide taxes.

Legislating Energy Poverty: A Case Study of How California’s and New York’s Climate Change Policies Are Increasing Energy Costs and Hurting the Economy
This analysis from Wayne Winegarden of the Pacific Research Institute shows the big government approach to fighting climate change taken by California and New York hits working class and minority communities the hardest. The paper reviews the impact of global warming policies adopted in California and New York, such as unrealistic renewable energy goals, strict low carbon fuel standards, and costly subsidies for buying higher-priced electric cars and installing solar panels. The report finds that, collectively, these expensive and burdensome policies are dramatically increasing the energy burdens of their respective state residents.

A Review of the Regional Green Gas Initiative
This Cato Journal article authored by David T. Stevenson of the Caesar Rodney Institute finds the Regional Greenhouse Gas Initiative has not shown any added emissions reductions or associated health benefits, has had minimal impact on energy efficiency and low-income fuel assistance, and has increased regional electric bills.

Less Carbon, Higher Prices: How California’s Climate Policies Affect Lower-Income Residents
This study from Jonathan Lesser of the Manhattan Institute argues California’s clean power regulations, including the state’s renewable power mandate, is a regressive tax that harms impoverished Californians more than any other group.

Five Myths of Cap-and-Trade
Articles supporting cap-and-trade programs rest on a number of fallacies. In this article by Todd Myers of the Washington Policy Center, Myers identifies and explores five persistent myths concerning cap-and-trade, including the belief that a cap on carbon dioxide emissions guarantees emissions reduction.

The Deeply Flawed Conservative Case for a Carbon Tax
In this paper published by the American Enterprise Institute, Benjamin Zycher says the “conservative” Climate Leadership Council’s (CLC) much-hyped carbon-tax proposal is “naïve” and “virtually all of the … assertions in support of its proposal are incorrect or implausible.” The CLC’s plan is “poor conceptually and deeply unserious,” wrote Zycher.

The Case Against a U.S. Carbon Tax
In this paper from the Cato Institute, Robert P. Murphy, Patrick J. Michaels, and Paul C. Knappenberger examine carbon-dioxide tax programs in place in Australia and British Columbia and consider whether similar programs would be successful in the United States. They conclude, “In theory and in practice, economic analysis shows that the case for a U.S. carbon tax is weaker than its most vocal supporters have led the public to believe.” 

Economic Outcomes of a U.S. Carbon Tax
This report from the National Association of Manufacturers evaluates the potential impacts carbon taxes whose revenues would be devoted to a combination of debt and tax rate reduction would have on the U.S. economy. The results consider the varied economic effects of fossil-fuel cost increases caused by carbon taxes, as well as the positive economic effects of the assumption that carbon tax revenues would be used to reduce government debt and federal taxes.

The Carbon Tax Shell Game
Oren Cass of the Manhattan Institute argues the carbon tax is a shell game. The range of designs, prices, rationales, and claimed benefits varies so widely that assessing the validity of most proposals is nearly impossible to accomplish. In this article for National Affairs, Cass says the effect of carbon-dioxide taxes on emissions has proven to be insubstantial, a fact he says is ignored by the tax’s proponents when promoting its purported benefits.

The U.S. Leads the World in Clean Air: The Case for Environmental Optimism
This paper from the Texas Public Policy Foundation examines how the United States achieved robust economic growth while dramatically reducing emissions of air pollutants. The paper states that these achievements should be celebrated as a public policy success story, but instead the prevailing narrative among political and environmental leaders is one of environmental decline that can only be reversed with a more stringent regulatory approach. Instead, the paper urges for the data to be considered and applied to the narrative.

Climate Change Reconsidered II: Fossil Fuels – Summary for Policymakers
In this fifth volume of the Climate Change Reconsidered series, 117 scientists, economists, and other experts assess the costs and benefits of the use of fossil fuels by reviewing scientific and economic literature on organic chemistry, climate science, public health, economic history, human security, and theoretical studies based on integrated assessment models (IAMs) and cost-benefit analysis (CBA).

The Social Benefits of Fossil Fuels
This Heartland Policy Brief by Joseph Bast and Peter Ferrara documents the many benefits from the historic and still ongoing use of fossil fuels. Fossil fuels are lifting billions of people out of poverty, reducing all the negative effects of poverty on human health, and vastly improving human well-being and safety by powering labor-saving and life-protecting technologies, such as air conditioning, modern medicine, and cars and trucks. They are dramatically increasing the quantity of food humans produce and improving the reliability of the food supply, directly benefiting human health. Further, fossil fuel emissions are possibly contributing to a “Greening of the Earth,” benefiting all the plants and wildlife on the planet.

Nothing in this Research & Commentary is intended to influence the passage of legislation, and it does not necessarily represent the views of The Heartland Institute. For further information on this subject, visit Environment & Climate News, The Heartland Institute’s website, and PolicyBot, Heartland’s free online research database.

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March 13, 2020 6:40 am

When it comes to the subject of Global Warming/Climate Change, Governor Inslee is a an idiot on the subject matter. He has been an idiot for many years, which is why he will never stop pushing his program to fix a non existent problem.

He is totally convinced he has the answer to the non existent problem, which makes ideologists like him DANGEROUS to many. People like him get afflicted with the Planetary Savior virus infection, they become delusional, ideological and demand Socialism based powers to implement programs few wants.

I live in Conservative dominated Eastern Washington, glad to have a mild winter that reduced my power bill, thus any noise the idiot Governor makes about Climate change, I get really worried he will finally break through and smash the economy in the process, thus the end run attempt to get around the will of the people indicate he will pursue his climate delusions to the end, that is why the Jerk needs to be voted out of office.

Jeff Alberts
Reply to  Sunsettommy
March 13, 2020 12:07 pm

Inslee’s idiocy is willful. Information conflicting with his alarmist views is readily available, he simply chooses to ignore it.

Even if he is voted out of office (no likely), a conservative governor will be so hamstrung by a “progressive” legislature that he will be totally ineffective, and won’t last more than one term. That’s just reality in this state.

John F. Hultquist
Reply to  Sunsettommy
March 13, 2020 1:02 pm

Inslee spent last year running for POTUS on a one-legged stool — climate. He went nowhere.
Had he and his team sought to find problems to work on in Washington State, we might not now be one of the “hot spots” of the new virus. The State (March 12th) now has 31 deaths. At the Kirkland facility: “ Sixty-three residents have been infected and 22 people have died from COVID-19.
Having arrived late to the issue, he’s mostly got this wrong too. One of the worst governors ever for the State. Although there is a cluster of folks near the bottom of the list.

nw sage
Reply to  John F. Hultquist
March 13, 2020 7:15 pm

Don’t forget that Inslee continues to get a retainer from Soros connected action groups – AND HE SEES NOTHING WRONG WITH HIS GETTING PAID BY MORE THAN ONE ‘MASTER’!

March 13, 2020 6:40 am

Carbon dioxide gives life. Why would anyone tax it? Apart from political psychopaths…..

Pillage Idiot
March 13, 2020 6:51 am

“Apart from political psychopaths…..”

The question answers itself.

March 13, 2020 7:01 am

The amount of co2 that greta is going to see after the virus has been controlled will send her in to shock Lol

It may be sooner then expected, as companies are actually getting funds to find and produce a vaccine.

I feel they will push it through quickly due to the economic damage so far


Bryan A
March 13, 2020 7:03 am

The “People” of the once great state of Washington need to clear out their swamp of creatures who BELIEVE Cap and Trade or Carbon Pricing Schemes are the direction to go. Artificially inflating energy costs is NOT the way to go for a better future.
If something comes along that is better than Hydrocarbon Energy, it WILL dominate through market trade as a better, cheaper, more reliable energy source.

Steven Miller
Reply to  Bryan A
March 14, 2020 9:18 am

“The “People” of the once great state of Washington need to clear out their swamp of creatures who BELIEVE Cap and Trade or Carbon Pricing Schemes are the direction to go. ”

Those of us who were born and raised and spent our lives here are now outnumbered by the new comers, largely leftists from California, and hoards of people from other parts of the world. Visiting the stores near our home feels like you are in a foreign country. A third of the people where we live do not even speak English.

Donald Hanson
March 13, 2020 7:35 am

It is an attempt to form a ruling class. the democrat party and long term republican rino’s want a bureaucracy that rules the people that they can claim they didn’t have a hand in. They can wring their hands at election time and continue to let the bureaucracy rule the people. This has been in the works for quite a while. The nameless faceless government workers making and enforcing rules without the congress and senate having to vote on them.

Joel Snider
March 13, 2020 7:50 am

This is the route Kate Brown’s forcing on us via executive order – regulatory strangulation – and since they didn’t get their ‘Cap and Trade’, this is just going to be punishment.

Bryan A
Reply to  Joel Snider
March 13, 2020 9:45 am

I wonder if that Political Climate Forcing is in the Political Climate Models

Joel Snider
Reply to  Bryan A
March 13, 2020 3:14 pm

I think it’s definitely in the regular old climate models.

March 13, 2020 8:06 am

Its nonsensical to talk of a carbon tax as regressive. On that basis, the energy price is itself hugely regressive – the poor pay far more for a gallon of petrol (excluding the tax) as a percentage of their income than the rich do. Same for a hot dog. Or a flight. Or anything.

A carbon tax is about fully costing the price of something. You can argue about whether its needed, what rate it should be, but arguing that having people pay the full cost of what they buy is not regressive- unless you think there should be different prices for the rich and the poor for everything.

A regressive tax is not a flat tax. It is the opposite of a progressive tax.

John in Oz
Reply to  Phoenix44
March 13, 2020 2:36 pm

A tax is an ADDITIONAL cost to the price of goods so that money is available for OTHER purposes, not part of the production + profit equation.

March 13, 2020 8:10 am

Inslee’s Long March continues.

March 13, 2020 8:11 am

Fossil fuels destroyed the underclass by elevating it, from suffering to survive, to
influence and prominence. The carbon tax would reverse the advances in quality of life for most people.

Shady politicians getting their underhanded anti voter agenda implemented through civil servants, called regulators, to hide blame from themselves is what can be expected of scoundrels. These are the lowest of the low because they destroy those they are sworn to represent.

March 13, 2020 8:43 am

To paraphrase one of our trolls:
Democrats don’t respect democracy.

March 13, 2020 8:48 am

Evil never quits. It’s why it wins.

Bryan A
Reply to  Sheri
March 13, 2020 12:14 pm

To paraphrase the good Dr McCoy
In the battle between Good and Evil, Evil usually wins unless Good is Very Careful

March 13, 2020 8:51 am

Sounds like taxation without representation.

March 13, 2020 8:52 am

The regular session of the WA State Legislature ended yesterday. Since they’re not finished taxing and spending, there will be a special session called. Hide the women and children!

Democrats have majority control of the WA State House and Senate, and with Democrat Gov Insleeze, they can pass almost any tax they want. And they WANT more taxes and more spending, necessary or not, to expand government. It’s a like Leftist Legislative Disneyland.

Due to a hot tech economy, WA State is projected to have a $4B surplus for the upcoming biennium, mostly the result of massive tax increases in the last session. Lowering taxes or increasing the rainy day fund were never considered.

Fortunately, the local big business propped up the outnumbered and generally ineffective WA State Republicans, and narrowly prevented a hideously expensive and useless “Low Carbon Fuel Standard” (LCFS) bill from coming to a final vote. The current attempt to give the Dept of Ecology authority to enact a Low Carbon Fuel Standard via regulation is how the Leftist Klimate Kooks are trying to get around the direct legislative roadblock and avoid voter accountability for future LCFS regulations.

Since Gov Insleeze got 0% of the vote with his stupid and futile Klimate Kampaign for President, he’s running for a 3rd term. WA has not had a GOP governor since 1988.

It’s ugly these days, living in the Left Coast Feminist Socialist Republic of Martha Washington!

March 13, 2020 11:38 am

We here in California have been suffering CAGW tax burdens since 2013.
See how good it’s working!
The California legislature is making a dent in their woefully underfunded pension programs.
There’s plenty for homeless and illegal’s insurance.
California has a cash surplus!
And the lefty’s keep getting re-elected by extremely low IQ voters that buy into this “save the planet” crap.
California is way ahead of everyone single-handedly stopping the world-wide spread of CAGW by way of poverty.

March 13, 2020 9:38 am

Another progressive tax. So monotonic.

March 13, 2020 9:40 am

Carbon Dioxide Tax???

If we are going to inflict a CDT on plants, then will we also impose a Breakfast, Lunch and Dinner Tax (BLDT) on humans? Who decides BLDT on whom ? As we are carbon-based life form, are we aiming at a very quick global extinction of all life on the planet?

March 13, 2020 10:33 am

This is how Socialism creeps into American lives under the radar. Bit by bit, little by little, and it has been adding up over the last century. Taxes claiming to help our social needs that have nothing to do with governance but instead aim to redistribute wealth. AGW is the grandest wealth redistribution scheme ever invented.

Joel O'Bryan
Reply to  markl
March 13, 2020 10:58 am

It is the “grandest wealth political powerredistribution scheme ever invented.” is how I would phrase it.

Climate change is simply the Trojan Horse containing socialism, and the seizing of political power from the People and placing it into the hands of a few. And the key to doing that is that at the heart of every modern economy with an affluent large middle class is copious amounts of affordable energy. Everything depends on energy, electricity, diesel, oil, natural gas. Control energy and you control everything, including the people. Make the middle class into a serf class dependent on their “elitist benevolent” Lords and political class for subsidy handouts to pay for the necessity of electricity. Eliminate alternative sources of energy they may use like natural gas.

Keep electing Democrats and they will keep taking away the People’s voice using a whole slew of “new” things like “ballot harvesting”, carbon taxes, open borders with no immigration checks or controls on who votes, and placing power into the hands of bureaucrats unaccountable to the People.

March 13, 2020 12:06 pm

Looks like the “Evergreen” state has betrayed its namesake!

Jeff Alberts
Reply to  RockyRoad
March 13, 2020 12:31 pm

Again, Inslee is willfully ignorant of his state’s history. The reason it’s called the Evergreen state is due to wildfires, which many evergreen use to propagate their seeds.

March 13, 2020 12:21 pm

“A bill introduced in the Washington House of Representatives would give the state Department of Ecology (DOE) the authority to create either a carbon-dioxide tax or cap-and-trade system, or both, in the Evergreen State. If passed, DOE could establish each program without any sort of legislative approval.”

This is how dictatorships are run.

Rick R
March 13, 2020 12:28 pm

At least Oregon and Washington have the Initiative process
to fight this nonsense!!!

Reply to  Rick R
March 13, 2020 2:07 pm

Initiatives and Referendums (Referendi?) are trench wars in WA State due to political demographics.

WA State has a 2019 population of 7.55M; lefty King County has a 2019 population of 2.23M; 30% of the state. King Co voted 72% for Clinton & 23% for Trump in 2016, and it’s become even more lefty during Trump’s first term.

If the current give-the-power-to-bureaucrats-to-create-a-carbon-tax-via-regulation proposal becomes law, there will be a Referendum. The ones that strike down environmental laws usually lose, those that strike down taxes usually win. It will be a question of which side sets the narrative (Gaia vs economy) and comes up with more money, the Tom Steyer + mainstream media mafia, or big business. It’s hard to be optimistic.

March 13, 2020 4:59 pm

I wonder if the WA timber industry (Weyerhaeuser et al.) realizes that they are in the business of moving sequestered carbon from one point on the planet to another and thus should be exempt any carbon tax.

Wouldn’t sequestration be considered an offset?
And what about the carbon generated to move that sequestrated carbon to a different location?

This carbon taxy thing could get complicated.

Cue the lawyers.

Tom Abbott
March 13, 2020 5:47 pm

From the article: “CBO reports the reason for cost discrepancy is “a carbon tax would increase the prices of fossil fuels in direct proportion to their carbon content. Higher fuel prices, in turn, would raise production costs and ultimately drive up prices for goods and services throughout the economy … Low-income households spend a larger share of their income on goods and services whose prices would increase the most, such as electricity and transportation.”

That’s exactly right.

All these carbon dioxide tax schemes claim they won’t hurt the poor because the poor will get rebates. But the poor won’t get rebates for all the costs that go higher because of the carbon dioxide tax. If you tax gasoline, you raise the costs of everything in the economy, not just gasoline.

March 14, 2020 7:13 pm

“Fully costing the price of something”

What a CROCK. Is solar and wind FULLY COSTED? No, solar and wind producers are not required to pay for the backup power sources. And those REQUIRED backup sources would end up paying a “CARBON???” tax for the fuel wasted while spinning and not producing power because they need to be ready when the sun goes down or the wind stops blowing.

Wind and solar manufacture does HUGH damage to the enviroment just to get the natural resources to make the crap. Is that FULLY COSTED in the price of the electricity? Not by a long shot.

You may get away with that crap at some leftist climate fanatic blog, but I am surprised no one called you on it yet here.

All taxation, by its very nature, is regressive because the deciders will always make it so. The only time it is not regressive is when a country is on its way to Venezuelafication. Then the PRODUCERS up and quit and the country goes to something that rhymes with quit. The lower “classes” lose 20% or more of their body mass because of lack of sufficient food. Now THAT is regressive, and that is where all this is leading. It started with control of health care, then it will be electical power and other fuels, then freedom of movement, then full socialism, then totalitarianism, then the collapse of society, and hopfully, a rebirth of individual freedom and FREE ENTERPRISE! Then the new society can begin to rebuild wealth.

There ia a reason that the Democrats are all for ths is that they are actually the remnants of the loyalists. They really do believe the serfs cannot take care of themselves without the aristocracy, or the in the modern times, party apparatchiks.

Can’t wait till TRUMP! starts sending the DC bureaucracy to the 4 corners of the country, cutting their numbers and the cost to the country of that counter productive OVERHEAD.

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