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.