NPI's Cascadia Advocate

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

Thursday, September 7th, 2023

A public bank could help Washington tackle the growing threat of climate damage

The dev­as­ta­tion from Washington’s wild­fires this sum­mer showed that the con­se­quences of cli­mate dam­age are get­ting worse. Wild­fires have mul­ti­ple caus­es, whether human neg­li­gence, poor for­est man­age­ment, or freak nat­ur­al acci­dents. Nev­er­the­less, the warmer and dri­er sum­mers in the Pacif­ic North­west has meant that the fire sea­son has got­ten longer and poten­tial­ly more volatile.

So far, the destruc­tion of Washington’s lat­est wild­fires has been rel­a­tive­ly con­tained. The deaths of two peo­ple and the destruc­tion of over three hun­dred and fifty homes is trag­ic, but in terms of acreage, the wild­fires this sea­son have been rel­a­tive­ly small. How­ev­er, with­in the con­text of the last few decades, mas­sive wild­fires have become more com­mon in Washington.

Pri­or to the twen­ty-first cen­tu­ry, the largest wild­fire in Washington’s his­to­ry was the Yacolt Burn in 1902 that scorched near­ly 240,000 acres. In 2014, that record was bro­ken when the Carl­ton Com­plex Fire burned approx­i­mate­ly 256,000 acres.

Then, in 2015, the Okanogan Com­plex Fire eclipsed that destruc­tion with wild­fires that burned near­ly 305,000 acres. Five years lat­er, that record was smashed again when the Wash­ing­ton Labor Day Fires burned more than 330,000 acres.

Unless Wash­ing­to­ni­ans want a future where out-of-con­trol blazes are the new norm, they are going to need to make mas­sive invest­ments in for­est man­age­ment and become a mod­el state for rapid­ly reduc­ing green­house gases.

While the state has adopt­ed a coher­ent pol­i­cy for the for­mer, it is still strug­gling with the lat­ter, most­ly because it lacks the will to embrace pro­gres­sive rev­enue sources that could secure the nec­es­sary invest­ments in a green­er future.

There is good news: In the past few years, the state has begun a con­cert­ed effort to improve its for­est man­age­ment and its response to wildfires.

In 2021, law­mak­ers passed HB 1168, which allo­cat­ed $500 mil­lion over the next eight years to the Depart­ment of Nat­ur­al Resources (DNR) to imple­ment its 20-Year For­est Health Strate­gic Plan of Cen­tral and East­ern Washington.

The fund­ing not only sup­port­ed greater resources for fire­fight­ers — a request that Lands Com­mis­sion­er Hllary Franz had been mak­ing for years — but also pri­or­i­tized long term for­est health. The DNR’s twen­ty year Strate­gic Plan called for the repair of 1.25 mil­lion acres of Washington’s for­est, while acknowl­edg­ing that more than 2.7 mil­lion acres are con­sid­ered unhealthy, includ­ing being vul­ner­a­ble to wildfires.

As of Octo­ber 31st, 2022, DNR, along with its part­ners, has already treat­ed 500,000 acres across cen­tral and east­ern Washington.

The bad news is the state has yet to mean­ing­ful­ly reduce cli­mate dam­ag­ing emis­sions. Wash­ing­ton does have a rep­u­ta­tion for tak­ing the cli­mate cri­sis seri­ous­ly, but recent his­to­ry demon­strates we have strug­gled to rise to meet the moment. In 2019, the state released 102.1 mil­lion met­ric tons of green­house gas­es into the atmos­phere, which was not only a 7% increase from 2018, but the most since 2007. It also was 9% high­er than the emis­sion tar­gets set by the state. A con­sid­er­able con­tri­bu­tion to this increase was the state’s elec­tric­i­ty sector.

From 2018 to 2019, emis­sions from elec­tric­i­ty increased by 5.4 mil­lion met­ric tons. Essen­tial­ly, weath­er vari­abil­i­ty — extreme­ly cold and rainy win­ters matched with excep­tion­al­ly hot and dry sum­mers — meant that peo­ple were using more elec­tric­i­ty to stay com­fort­able in their homes.

The state’s strat­e­gy for clean ener­gy deploy­ment left Wash­ing­ton vul­ner­a­ble to back­slid­ing. Instead of rely­ing on a tech­nol­o­gy-neu­tral posi­tion that focus­es on sup­port­ing pre­vi­ous­ly exist­ing pub­lic insti­tu­tions, Washington’s leg­is­la­tors have tend­ed to favor cli­mate poli­cies that are tech­nol­o­gy spe­cif­ic, piece­meal, and large­ly depen­dent on the con­sump­tion pat­terns of indi­vid­ual consumers.

As an exam­ple, con­sid­er the state’s empha­sis on pri­vate solar panels.

For years, Wash­ing­ton has pro­vid­ed a sales tax exemp­tion for solar ener­gy sys­tems, includ­ing per­son­al rooftop solar pan­els, and net meter­ing that allows indi­vid­ual solar pro­duc­ers to sell their ener­gy back to the grid. Unfor­tu­nate­ly, these incen­tives have only had a mar­gin­al impact on our clean ener­gy production.

After years of exper­i­men­ta­tion, it is time to admit that piec­ing togeth­er a solar-pow­ered utopia from a mil­lion indi­vid­ual actors has failed.

Instead, more empha­sis should be placed on increas­ing the sup­ply of clean ener­gy avail­able to util­i­ties. By far, the most sig­nif­i­cant pub­lic ener­gy insti­tu­tion in the state is the con­sor­tium Ener­gy Northwest.

Orig­i­nal­ly named the Wash­ing­ton Pub­lic Pow­er Sup­ply Sys­tem, Ener­gy North­west was the prod­uct of a decade of activism from rur­al pop­ulists and urban pro­gres­sives, specif­i­cal­ly from Wash­ing­ton State Grange. Cur­rent­ly, the con­sor­tium pro­vides ener­gy to twen­ty-eight pub­lic pow­er util­i­ties, includ­ing twen­ty-three of the state’s twen­ty-nine pub­lic util­i­ty dis­tricts, all at low prices.

With a sig­nif­i­cant clean ener­gy port­fo­lio that includes nuclear, hydro, wind, and solar, Ener­gy North­west deliv­ers near­ly 1,300 megawatts of pow­er through­out the state, and it could do much more if giv­en the need­ed resources.

In addi­tion to sup­port­ing the state’s pub­lic util­i­ties, Wash­ing­ton will also need to make mas­sive invest­ments in its infra­struc­ture. The warm­ing cli­mate is like­ly to yield more extreme weath­er. To pre­pare for this future, Wash­ing­ton will not only need to repair its dam­aged infra­struc­ture but make addi­tion­al invest­ments to for­ti­fy it. In 2019, the Amer­i­can Soci­ety of Civ­il Engi­neers gave Washington’s infra­struc­ture a grade of “C-.” Red flagged areas include drink­ing water infra­struc­ture, roads, pub­lic tran­sit, and wastewater.

Stormwa­ter infra­struc­ture received a near fail­ing grade.

The bad shape of Washington’s roads and lack of invest­ment in tran­sit is wor­ry­ing, since the trans­porta­tion sec­tor is our largest source of emissions.

Trans­porta­tion infra­struc­ture is inti­mate­ly con­nect­ed to the state’s hous­ing short­age. The denser an urban area, the eas­i­er it is for peo­ple to adopt alter­na­tive forms of trans­porta­tion — such as walk­ing, bik­ing, and the uti­liza­tion of pub­lic bus­es and trains. Unfor­tu­nate­ly, years of mis­guid­ed devel­op­ment poli­cies have locked the state in a car-cen­tric plan­ning mindset.

Wash­ing­ton is mov­ing away from the sprawl mod­el, but chal­lenges lay ahead. In the next twen­ty years, the state is going to need to respon­si­bly build 1.1 mil­lion units of hous­ing to just keep up with antic­i­pat­ed pop­u­la­tion growth.

The bot­tom line is that to effec­tive­ly deal with cli­mate dam­age, Wash­ing­ton must make con­sid­er­able invest­ments in clean ener­gy, infra­struc­ture, trans­porta­tion, and hous­ing. This won’t be easy, but there are solu­tions available.

In addi­tion to bal­anc­ing its tax code, Wash­ing­ton has the option of cre­at­ing a pub­lic bank to hold the rev­enue the state col­lects. Then, using the full faith and cred­it of the state, the state could make loans to fund vari­ety of social needs.

The idea might seem rad­i­cal, but there are already exam­ples of it working.

Wash­ing­ton has exper­i­ment­ed with poli­cies that have come close to pub­lic bank­ing. In 1997, Wash­ing­ton was one of sev­er­al states that par­tic­i­pat­ed in the Depart­ment of Transportation’s State Infra­struc­ture Banks (SIB) to fund trans­porta­tion infra­struc­ture. With cap­i­tal­iza­tion of $1.5 mil­lion from the fed­er­al gov­ern­ment, Wash­ing­ton set up a revolv­ing loan fund to allo­cate invest­ments to roads and high­ways. Sim­i­lar­ly, in 2013, the leg­is­la­tors cre­at­ed a Clean Ener­gy Fund (CEF), which — like SIB — oper­ates as a revolv­ing lender.

Through­out its his­to­ry, Washington’s CEF has loaned near­ly $150 mil­lion and sup­port­ed more than 5,000 ener­gy projects.

These poli­cies are encour­ag­ing, but they suf­fer from two major shortfalls.

First, they are painful­ly under­cap­i­tal­ized. The amount of mon­ey need­ed to solve Washington’s prob­lems needs to be in the bil­lions, not mil­lions. Sec­ond, revolv­ing loans can direct mon­ey to need­ed areas, but unlike an actu­al bank they do not expand the mon­ey sup­ply by lend­ing out against deposits. For a gen­uine pub­lic bank, Wash­ing­ton should look to the suc­cess­es in oth­er states.

Sev­er­al states — includ­ing Alaba­ma, Geor­gia, Ken­tucky, Illi­nois, South Car­oli­na, Ten­nessee, and Ver­mont — have all had state owned pub­lic banks in their his­to­ry. Cur­rent­ly, North Dako­ta is the only state in the coun­try that has a pub­lic bank, and it is a major pil­lar of the state’s econ­o­my, with lend­ing prac­tices that sup­port eco­nom­ic devel­op­ment and dis­as­ter relief.

Last year, BND had $10.2 bil­lion in assets, main­tained a loan port­fo­lio of $3.2 bil­lion, and made $191.2 mil­lion in prof­it. How­ev­er, unlike a pri­vate bank, its sur­plus­es are plowed back into the state’s economy.

Dur­ing the most recent leg­isla­tive ses­sion, Sen­a­tor Pat­ty Kud­er­er (D‑48th Dis­trict: Belle­vue, Red­mond, Kirk­land, the Points com­mu­ni­ties) intro­duced SB 5509, leg­is­la­tion to cre­ate a pub­lic infra­struc­ture bank for Washington’s local, munic­i­pal, and trib­al gov­ern­ments. While the bill would not dupli­cate the mod­el North Dako­ta uses, it could lead to a strong pub­lic bank­ing sec­tor in Washington.

SB 5509 was heard in the Sen­ate Com­mit­tee on Busi­ness, Finan­cial Ser­vices, Gam­ing & Trade on Jan­u­ary 31st, 2023. It was sched­uled for exec­u­tive action in Feb­ru­ary, but failed to receive the nec­es­sary votes to advance, due to the oppo­si­tion of Demo­c­ra­t­ic Sen­a­tor Mark Mul­let (D‑5th Dis­trict: East King County).

Mul­let and Kud­er­er are each now seek­ing statewide office. Mul­let is run­ning for gov­er­nor and Kud­er­er is run­ning for insur­ance com­mis­sion­er. Mul­let’s posi­tion in the Sen­ate is also up in 2024, which means he must for­go a Sen­ate reelec­tion bid in order to pur­sue his guber­na­to­r­i­al ambi­tions. In just a year and a half, the chief Demo­c­ra­t­ic oppo­nent of pub­lic bank­ing in the Leg­is­la­ture could be out of office.

If Wash­ing­ton is going to deal seri­ous­ly with the impacts of glob­al warm­ing, includ­ing mak­ing the nec­es­sary invest­ments through­out the state, then it should embrace the promise and poten­tial of pub­lic bank­ing. Oth­er­wise, res­i­dents of the state will like­ly face a much harsh­er future, both eco­nom­i­cal­ly and ecologically.

The real­i­ty that Wash­ing­ton’s lead­ers need to face, which ought be felt as intense­ly as the heat from the state’s wild­fires, is that the Earth is only going to respond to our actions. Rhetoric won’t be enough. Our deeds must match our words if future gen­er­a­tions are to inher­it a hab­it­able planet.

About the author

Mar­co Rosaire Rossi is the exec­u­tive direc­tor for Wash­ing­to­ni­ans for Pub­lic Bank­ing and an adjunct pro­fes­sor in polit­i­cal sci­ence at Cas­ca­dia Com­mu­ni­ty Col­lege. He received a PhD in polit­i­cal sci­ence from the Uni­ver­si­ty of Illi­nois-Chica­go and author of the book “Pol­i­tics for the 99%.” He cur­rent­ly lives in Taco­ma, Washington.

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