Inslee fights to save landmark climate law

By Mike Baker and Coral Davenport / © 2024 The New York Times Company

EVERETT — Long before the League of Conservation Voters embraced him as the “greenest governor” in America, Jay Inslee had written a book about climate change that called for a clean-energy revolution that would be the equivalent of the Apollo space program in commitment and innovation.

But Inslee’s visions for advancing some of the world’s most ambitious climate policies repeatedly ran into the realities of politics during his 12 years in office in Olympia. Even in a largely liberal state where residents cherished the environment, legislators were reluctant to get on board. In 2018, voters rejected a carbon tax Inslee had championed.

It wasn’t until last year that Washington became the second state in the country to implement a landmark law capping emissions, requiring businesses to pay for the right to generate large quantities of carbon dioxide.

Now, as Inslee prepares to leave the governor’s mansion at the end of his third term, he is helping lead the fight against a ballot initiative, well-funded and fiercely fought, that would repeal Washington’s climate law.

“This is the single most important election, other than the White House, in the United States,” Inslee told supporters at a union hall this month in Everett, about 25 miles north of Seattle.

The vote on the measure, Initiative 2117, is being watched across the country and around the world as government leaders struggle with how to put in place plans with enough potency to drastically alter carbon emissions — the primary cause of global warming — while answering to voters concerned about the costs.

Inslee believes his state has found a way, by using the money companies pay for carbon allowances to invest in programs that will confront climate change, such as electric ferries, restoration of salmon depleted by drought and warming waters as well as free transit access for young people.

The program has developed a broad coalition of supporters. Bill Gates and Steve Ballmer, the former Microsoft leaders and two of the world’s wealthiest people, are among the biggest financial backers of the campaign to sustain the measure. Environmental groups have rallied to support the cause, and so has the oil company BP, which operates the largest oil refinery in the Pacific Northwest.

Repealing the climate law, a BP spokesperson said, “moves the state backward on climate action and endangers funding for key transportation infrastructure and other low-carbon projects.”

The campaign to repeal the law was spearheaded and in part bankrolled by Brian Heywood, a hedge fund manager who moved his company out of California a decade ago because he was fed up with the taxes there and is now trying to fight new costs in Washington. His opposition to the climate measure, focused on increased costs to consumers, has support from industry groups that represent builders, truckers and retailers.

As the new climate law was rolled out in 2023, gas prices bounced upward in Washington, and they remain elevated compared to those in neighboring Oregon. Heating bills have also gone up, with one projection suggesting many residential natural gas customers may end up paying more than $20 extra per month during the coming winter than they would have without the climate plan.

California, which passed the nation’s first cap-and-trade law nearly 20 years ago, has weathered many attempts to repeal its measure. A 2010 ballot initiative supported by some of the nation’s largest oil refiners was defeated with the help of a $25 million campaign led by billionaire climate activist Tom Steyer.

Around Washington, some voters have expressed mixed feelings — a desire to do the right thing, a reluctance to be among a select group being asked to fund the fight on climate change.

Teresita Ronquillo, a retired union electrician in the Seattle area, was among many people who showed up this week at a gas station in Seattle that was briefly offering discounted prices as part of an event organized by the repeal campaign.

Ronquillo, 69, said she has concerns about climate change and has long supported Democrats, including Inslee. But after discussing the initiative to repeal the climate measure with her family, she said, she has decided to vote for it. While she wants to address the problems the planet faces, she has more immediate concerns while living on a fixed income and having to pay gas prices topping $4 per gallon when she goes to care for her grandchildren.

“I’m going, ‘Where am I going to get that money?’ I don’t know how I’m going to pay for it,” Ronquillo said.

The repeal campaign has raised $8.5 million, but the campaign to sustain the law has now brought in double that.

“I’ve got no money coming in from oil,” Heywood said in an interview. “No big energy money coming in to me. I would be happy to take their money. Who’s standing up for them? It’s me standing up against Bill Gates and Steve Ballmer.”

Opponents of the repeal have run more than a dozen television and social media advertisements hailing the programs the law has paid for, including expanded public transit. One of the ads features Bill Nye the Science Guy, the popular PBS children’s television star from the 1990s.

Other states so far have not followed the lead set by California and Washington. In Oregon, Democratic lawmakers twice over the past five years were on the cusp of passing similar climate laws, but failed when Republican lawmakers walked out of the legislative sessions, denying them the quorums needed to pass.

Maryland, New York and Pennsylvania have all talked about enacting similar programs, but have not yet done so.

Climate-change activists warn that a setback in Washington could halt further plans around the country. On the other hand, a vote to keep the measure could open doors elsewhere.

“If Washington is indeed successful this fall, it literally opens the door of opportunity for states across the country,” said Kate Brown, a Democratic former governor of Oregon. “This is about creating momentum and transformation. It says that this is not just California that can do it. To know that this is winnable at the ballot, when this goes directly to voters, is a huge layer of protection and comfort for public policymakers.”

Washington’s cap-and-invest program sets a limit on overall emissions. By 2030, it caps emissions at 45% of 1990 levels, a limit that grows more stringent over time until the state reaches a goal of net-zero emissions by 2050.

Businesses that generate a large amount of carbon emissions must purchase allowances through quarterly auctions to offset their impact. That money, totaling more than $2 billion so far, has helped fund environmental investments around the state.

Reuven Carlyle, a former Democratic state senator who was an architect of the plan, said the “cap-and-invest” strategy was a modification of the more commonly discussed “cap-and-trade” idea. Carlyle said he had heard concerns that money raised from California’s cap-and-trade program did not always flow directly to climate mitigation programs.

The lesson from California was that people needed to see the connection, Carlyle said, to understand the benefits. “We got to build Version 2 with their help, with their support.”

But there are still questions about the lingering costs to consumers. Inslee had downplayed the risk of price hikes after the measure passed, saying that it was “going to have a minimal impact, if any — pennies.” Inslee’s Department of Ecology estimated a potential increase of 1% to 3% in gas prices.

So far, the effect appears to have been greater. Washington’s gas prices had long tracked closely with Oregon’s, according to data from AAA, as both states are largely dependent on the same sources. But while the gap between gas prices in the two states had averaged around 10 cents per gallon in the years before the new law, reflecting Washington’s higher gas tax at the time, the average gap jumped to 35 cents in 2023, when the law went into effect. That number has fluctuated, and so have carbon auction prices, but Washington’s gas prices are currently about 40 cents per gallon higher than Oregon’s.

Companies bidding in the most recent carbon auction paid $29.88 per metric ton of carbon. That translates to about a quarter per gallon, if companies were to pass the full cost to consumers, said Andrew Wineke, a spokesperson for the state Department of Ecology.

Utility companies have also increased natural gas heating prices, although the law provides relief for low-income customers. The utility company Avista said longtime customers are currently set to pay an average of $5.45 more per month this winter as a result of the law, and the company has requested additional increases that would bring the total difference to $21.22 per month over past prices, all attributable to the climate law. The state’s largest utility, Puget Sound Energy, said customers have been paying an average of $7.98 more per month because of the law.

But the state has also suffered from the economic consequences of climate change.

Scientists have concluded that the extraordinary heat waves that scorched the Pacific Northwest this summer and in 2021 would almost certainly not have occurred without global warming. Studies have shown that climate change is lowering snowpack, causing glaciers to recede and increasing the frequency of landslides. A decline in the population of shellfish, which make up a major part of the region’s seafood industry, is linked to increased carbon dioxide pollution in the atmosphere and ocean.

Inslee said the investments will also help build a new clean-energy economy. “Over time, this is the reasonable economic decision to make,” he said in an interview.

The Canadian province of Quebec, which has a cap-and-trade program that is now linked with California’s, hopes to link with Washington’s as well, if the law stays in place.

By increasing the number of states involved in the cap-and-trade market, members could in theory reduce more carbon emissions with less financial burden on consumers, Benoit Charette, the environment minister of Quebec, said in an interview.

“The state of Washington could be a great partner,” said Charette, who said he had met with Inslee to talk about expanding the Washington carbon market into Canada. “It could be better for all the partners, but the decision is up to the people of Washington. We will be watching the repeal vote closely.”

This article originally appeared in The New York Times.