California’s experience proves Governor Inslee is right to pursue cap and trade

Gov­er­nor Jay Inslee’s bold yet sen­si­ble step to bring Wash­ing­ton State into the grow­ing North Amer­i­can cap and trade sys­tem is pre­dictably gen­er­at­ing oppo­si­tion from Repub­li­cans. State Sen­a­tor Cur­tis King, the Repub­li­can chair of the Sen­ate Trans­porta­tion Com­mit­tee, took to the pages of the Seat­tle Times to denounce Gov­er­nor Inslee’s plan. Unfor­tu­nate­ly for King, his attack on the gov­er­nor’s cap and trade plan is dis­proved by recent events here on the West Coast.

Sen­a­tor King’s argu­ment is that cap and trade will some­how hurt drivers:

The governor’s plan to pun­ish big pol­luters was no sur­prise either. How­ev­er, it won’t be the gas and diesel indus­try that would pay. It would be the peo­ple in our state who own a gas- or diesel-pow­ered vehi­cle who would foot the bill. Every per­son who needs to dri­ve a car or truck to get to work would be pun­ished because they are the “big, bad polluters.”

This is the stan­dard right-wing line about cap and trade, that it will cause prices at the pump to soar.

Except it won’t.

Cal­i­for­nia adopt­ed a cap and trade sys­tem in 2006, and defend­ed it at the bal­lot box in 2010 from an effort backed by oil com­pa­nies to repeal it. The sys­tem began oper­a­tion in 2012. But it was­n’t until Jan­u­ary 1, 2015 that fos­sil fuels, includ­ing diesel and gaso­line, were includ­ed under the car­bon cap.

This caused a great deal of anger from the oil com­pa­nies. Their lob­by­ing arm, the West­ern States Petro­le­um Asso­ci­a­tion, employed astro­turf tac­tics to try and con­vince the Cal­i­for­nia Leg­is­la­ture to exempt fuels from cap and trade and fight the state’s low car­bon fuel standard.

Their efforts failed, but not before scar­ing Cal­i­for­ni­ans into think­ing that their gas prices would soar. The oil indus­try astro­turf groups howled about a hid­den gas tax that would cause gas prices to rise by as much as 76 cents per gallon.

Last week, the dread­ed day final­ly arrived — gaso­line was cov­ered by the cap and trade sys­tem. So what hap­pened to gas prices in California?

If you look close­ly at this chart of the aver­age Cal­i­for­nia gas price, you’ll see a slight uptick at the begin­ning of Jan­u­ary: from $2.62 per gal­lon to about $2.65 per gallon.

That pales in com­par­i­son to the rapid fall in gas prices that took place in the pre­ced­ing 30 days. Even with the 3 cent increase, the aver­age price of a gal­lon of gas in Cal­i­for­nia was still 40 cents below the price in ear­ly December.

Dri­vers don’t appear to have noticed, accord­ing to the Sacra­men­to Bee:

“I didn’t notice any price change today or yes­ter­day,” said Sacra­men­tan Bill Nel­son, 45, fill­ing up at the Chevron sta­tion at 19th and Broad­way, where reg­u­lar was post­ed at $2.79 a gal­lon. “I’m just glad I’m not pay­ing $4 a gal­lon like I was pay­ing for a long time.”

Jean­ice Walk­er, 29, also con­sid­ers the cur­rent price of gas a reprieve. Walk­er was pump­ing gas Fri­day at the Valero sta­tion at Broad­way at River­side Boule­vard, where reg­u­lar was going for $2.45 a gal­lon for cus­tomers who paid cash.

“It always goes up for some rea­son or anoth­er,” Walk­er said. “I’m glad I’m get­ting a break with these (cur­rent prices).”

It’s pos­si­ble that the price of gas could rise a bit fur­ther, maybe as much as sev­en more cents a gal­lon. But that’s back­ground noise against the dra­mat­ic drop in prices that’s tak­en place lately.

In fact, ana­lysts pre­dict that the over­all price of gas may con­tin­ue to fall, and dri­vers will nev­er notice the impact of cap and trade at the pump.

This should come as no sur­prise. Gas prices are noto­ri­ous­ly volatile. Prices usu­al­ly decline in the fall and increase in the spring, often by much more than three or even ten cents a gal­lon. The effect of cap and trade is just back­ground noise amidst the usu­al rise and fall in gas prices.

More impor­tant­ly, Cal­i­for­ni­a’s expe­ri­ence proves that Gov­er­nor Inslee’s cap and trade plan will have a very small effect on gas prices — and that the effect will be some­thing Wash­ing­ton dri­vers can eas­i­ly afford. Dri­vers aren’t going to be “pun­ished,” as Sen­a­tor King claims. They’ll hard­ly notice.

So if dri­vers aren’t pay­ing the cap and trade costs, who is? The answer is it’s the big pol­luters. In this case, the oil com­pa­nies. They’re the ones who have to pay for the car­bon cred­its, and those costs are not actu­al­ly very easy to pass along to dri­vers. Of course, that’s why the oil com­pa­nies fought so hard to stop cap and trade.

The cap and trade rev­enue then gets plowed back into projects that make Wash­ing­ton green­er and more sus­tain­able, includ­ing mass tran­sit. The result is an effec­tive new effort to reduce car­bon emis­sions and address the prob­lems that glob­al warm­ing will cause to the North­west — all at a price dri­vers can eas­i­ly afford.

Sen­a­tor King may not want to admit it, but Cal­i­for­ni­a’s expe­ri­ence with cap and trade is prov­ing Gov­er­nor Inslee cor­rect. Wash­ing­ton should move ahead with the gov­er­nor’s plan to fight pol­lu­tion and build a more inclu­sive, sus­tain­able economy.