NPI's Cascadia Advocate

Offering commentary and analysis from Washington, Oregon, and Idaho, The Cascadia Advocate is the Northwest Progressive Institute's unconventional perspective on world, national, and local politics.

Tuesday, January 6th, 2015

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.

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2 Comments

  1. Cal­i­for­nia is cer­tain­ly not a state that I would ever want any­one to emu­late in any­thing. And I say that as some­one who is a third-gen­er­a­tion Cal­i­forn­ian who left. Find anoth­er exam­ple and I might be per­suad­ed. But using Cal­i­for­nia as an exam­ple, good grief!

    # by Cynthia :: January 8th, 2015 at 10:54 AM
  2. Good piece, strong­ly agree. The fear tac­tics from big oil and allies have been proved wrong dozens of times. Ulti­mate­ly, cli­mate and clean ener­gy poli­cies cre­ate con­sumer choic­es which cuts into the oil monop­oly — exact­ly why they are so stri­dent in their oppo­si­tion.

    # by Ross Macfarlane :: January 12th, 2015 at 10:14 AM

2 Pings

  1. […] Robert Cruick­shank, Pres­i­dent, North­west Pro­gres­sive Insti­tute (first pub­lished by North­west Pro­gres­sive Insti­tute Advo­cate) […]

  2. […] [USA] California’s expe­ri­ence proves Gov­er­nor Inslee is right to pur­sue cap and trade NPI’s Cas­ca­dia Advo­cate, 6 Jan­u­ary 2015 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.’” […]

    Ping from REDD in the news: 5-11 January 2015 | REDD-Monitor :: January 12th, 2015 at 3:11 AM