Thanks for mentioning our estimates of the impact of the tax on carbon dioxide emissions in your recent editorial (“Why we’re buying carbon emissions by the ton,” The Herald, Nov. 10). To be clear, the Washington Policy Center didn’t come up with the numbers. We simply applied the calculation used by the state of California when estimating the impact of their cap-and-trade system on gas prices and used the current allowance price in Washington. This is a standard formula. We simply applied it.
However, you also included information that is factually incorrect from Gov. Jay Inslee’s office and Climate Solutions that is worth correcting.
You noted that, “Others, including Gov. Jay Inslee’s office, cited in a Crosscut article, have suggested that oil companies have used the auctions as cover for some of the nation’s highest profit margins, at 60 to 80 cents a gallon. Climate advocacy group Climate Solutions has put the oil companies’ profit as high as $1.09 a gallon in Northwest states.”
These claims are incorrect. Both Inslee and Climate Solutions cite the Oil Price Information Service as their source. I encourage you to call OPIS directly about this claim. Brian Norris is the executive director of Retail Data at OPIS and he can explain what the data actually mean.
The number is not oil company profit. Indeed, the number has nothing to do with oil companies. Instead, it is the markup from wholesale to retail charged by gas stations, including Safeway, Costco, and other stations. Additionally, it is not profit. The markup must cover all a station’s costs, including rent, labor, taxes, credit card costs, etc. It is gross revenue, not profit.
Both the Governor and Climate Solutions have been told that their claim is false and that OPIS data don’t have anything to do with oil company profits. But they continue to dishonestly repeat that claim.
There are many things we can do to effectively reduce carbon dioxide emissions. I wrote an entire book about it. We have consistently favored effective efforts that reduce carbon emissions, contrary to the wasteful and ineffective policies that have characterized Washington’s approach.
Climate policies that are based in consistently dishonest claims are doomed to fail — as they have been for the past decade — not to mention unethical.
Washington Policy Center