Washington Governor Imposes Cap-And-Trade Through Executive Order

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Michael Bastasch DCNF Managing Editor
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Washington Democratic Gov. Jay Inslee is not waiting for the state legislature to regulate carbon dioxide emissions, but instead has issued an executive order to implement a cap-and-trade program, eliminate coal power and fund green energy projects.

“This is the right time to act, the right place to act and we are the right people to act,” Inslee said. “We will engage the right people, consider the right options, ask the right questions and come to the right answers — answers that work for Washington.”

Inlsee argues that more action is needed if the state is to meet climate goals passed by the legislature in 2008. Those goals call for the state to lower its carbon dioxide emissions by certain amounts by 2020.

The governor’s office is now imposing a cap-and-trade system to lower carbon dioxide emissions in order to meet state goals. Inslee has created a “Carbon Emissions Reduction Task Force” to design the state’s carbon trading system. The task force held its first meeting on Tuesday and will give its final recommendations to the governor in November.

“In Washington and across the nation, we’ve already begun to see the harm caused by climate change,” said Rod Brown, a member of the Cascadia Law Group and co-chair of the task force. “By acting now, we can protect Washingtonians while at the same time offering all of us the economic opportunities we see emerging in the clean energy economy.”

The executive order also requires state regulators to work with utilities to ban coal as a source of electricity in the state. Inslee has also ordered the creation of a “clean fuel standard” to reduce emissions from cars, trucks and other vehicles.

And, of course, no climate plan would be complete without a program to fund green energy projects across the state. Inslee wants state regulators to work with Washington State University and others to create green energy programs and initiatives aimed at increasing solar power — despite the state’s reputation for cloudy days.

Matt Dempsey, spokesman for Secure Our Fuels, said in a statement: “By now it should be absolutely clear that an LCFS is the desired goal for Governor Inslee and his administration. This policy is bad news for working families, consumers and businesses in Washington State who will have to pay higher prices for energy and transportation if the Governor has his way.”

Washington will become the second West Coast state to implement a cap-and-trade system, following in the footsteps of California. The Golden State has both a cap-and-trade system as well as a low-carbon fuel standard, both of which are raising costs for households and businesses.

“You’re going to be seeing higher energy prices throughout the Pacific Coast,” said Daniel Simmons, director of regulatory and state affairs at the Institute for Energy Research (IER).

“California’s electricity prices are higher than all of its neighbors, yet they keep going down this path,” Simmons added.

But Inslee’s executive order should come as no surprise. Last October, Inslee signed an agreement with California Gov. Jerry Brown, Oregon Gov. John Kitzhaber and the environment minister of British Columbia to push forward with climate regulations even if the U.S. as a whole failed to do so.

“California isn’t waiting for the rest of the world before it takes action on climate change,” Brown said last October. “Today, California, Oregon, Washington and British Columbia are all joining together to reduce greenhouse gases.”

Kitzhaber moved in February to use his executive authority to create an Oregon low-carbon fuel standard that would lower emissions from vehicles such as cars and trucks.

The West Coast already suffers from retail electricity prices and gasoline prices that are higher than the national average. California has seen huge price increases in electricity rates after the shutdown of the San Onofre nuclear power plant and cap-and-trade — retail rates for February 2014 were 16.18 cents per kilowatt hour, up from 15.68 cents per kilowatt hour a year ago.

Electricity prices in California were significantly higher than the national average of 11.88 cents per kilowatt hour in February 2014.

Washington, on the other hand, has electricity prices below the national average. The state actually had the “lowest residential electricity prices in the nation and the lowest combined electricity price across all sectors,” according to the Energy Information Administration. Most of its power comes from hydroelectric power — about 70 percent in 2010 to be precise.

While Washington does not produce much oil or coal, it’s the primary oil refining state in the Pacific Northwest and a place where mountain state coal mines look to export their products abroad. A low-carbon fuel standard in the state could hurt refining operations and increase prices at the pump.

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