Here’s how activists can succeed in their next attempt to put a price on carbon

Two Blue states tried — and failed — to put a price on carbon. What makes passing a carbon tax so difficult?

Washington state Governor Jay Inslee speaks at a rally during the March for Science on April 22, 2017 in Seattle, Washington. (CREDIT: Karen Ducey/Getty Images)
Washington state Governor Jay Inslee speaks at a rally during the March for Science on April 22, 2017 in Seattle, Washington. (CREDIT: Karen Ducey/Getty Images)

Last November, Democrats in Washington state notched a stunning victory, electing Manka Dhingra to the state senate and effectively tipping the state’s legislative scales entirely in favor of the Democratic party. With Democrats in control of the state legislature for the first time since 2012, Governor Jay Inslee (D) zeroed in on a prize that had evaded him for years: passing a carbon tax.

“We are not afraid of being a vanguard,” Inslee told the New York Times in early March, noting the state’s role in fostering barrier-breaking companies like Boeing and Microsoft. “In this case, we’re developing a new policy system, and we hope it would be followed.”

But Inslee’s dream of a carbon tax born in Washington and copied elsewhere won’t come to fruition — at least not this year.

Like in 2015, the bill to put a price on carbon died in the state legislature on March 1, a few votes shy of passing out of the Senate. In Oregon, a few days later, a similar attempt to put a price on carbon — this time in the form of a cap-and-invest proposal known as the Clean Energy Jobs Bill — died in the Democratic-controlled legislature.

And so, in the span of a few days, the country’s two best chances for a meaningful price on carbon died with relatively little fanfare.

Elsewhere, states like Massachusetts, New York, Connecticut, and Vermont have toyed with the idea of a price on carbon, but maintain that a number of barriers remain in place — from Republican opposition in both the legislature and governorship to debates over what to do with the revenue raised by a carbon market.

The wave of state-level action that some had thought might come from the passage of a carbon price in Oregon or Washington appears, at least for the time being, to have stalled.

But failure can be valuable, and the lessons from Oregon and Washington can provide a useful road map for pushing forward with expansive climate action — not just a price on carbon.

A policy years in the making

Putting a price on carbon can come either through a carbon tax, or through a cap-and-trade system that places a limit on emissions and allows industry to trade credits. For years, this has been held as a kind of platonic ideal for climate action.

Economists generally agree that it’s a useful forcing mechanism for getting carbon out of the economy because it creates a market that incentivizes low-carbon technology in all sectors, from manufacturing to transportation.

Conservatives and businesses generally like the approach — at least over other kinds of climate policies — because it creates certainty in the market and allows business to engage in long-term planning. And Democratic lawmakers, generally, like the idea because it moves the ball forward on climate action in a way that sounds both serious and achievable.

But, if the situation in Oregon and Washington over the past few years has been any indication, theoretically championing a price on carbon is very different than carrying that policy across the finish line.

As Brad Reed, communications director with Renew Oregon — a group that has worked hard to pass the Clean Jobs Energy bill over the last few years — put it, oftentimes politics has a way of lagging behind policy.

We, as the advocacy campaign, believed this bill was ready to roll,” Reed said of the Clean Energy Jobs bill, which had been introduced in 2017 and work-shopped by legislators in the off-season before the 2018 session. “It could have passed this year based on policy. But politics is a different matter.”

Politics, in Oregon’s case, meant the state’s legislative quirk that dictates that on even-numbered years lawmakers meet for an abbreviated, 35-day session — a little more than one-fifth the length of a normal session.

In January, Senate Majority Leader Ginny Burdick cautioned that the short session might not provide lawmakers with enough time to bring a bill as large as the Clean Energy Jobs from proposal to reality.

In that acknowledgement was the tacit admittance than even in Oregon’s Democratic-controlled legislature, Democrats potentially lacked the votes to pass the sweeping plan to cap carbon emissions and invest the revenue in climate-oriented projects like energy efficiency and renewable energy.

The political costs of a carbon price

While Democrats hold majorities in both the House and the Senate, their majority in the Senate is especially thin, with Democrats holding just a 17 to 13 edge. In 2017, when the Clean Jobs Energy bill was first proposed in legislative committee, four Democrats — including the Senate President — failed to publicly voice support for the bill.

In Washington, where a lack of votes also torpedoed carbon tax legislation, Democrats face a similar problem.

Dhingra’s election in 2017 is what tipped the scales of the State Senate to Democrats, meaning their margin for error is a single legislator. Just one person could be the difference between a successful vote or failed policy. But Washington Democrats lost by far more than that in 2018, with two lawmakers expressing hesitations about the bill in committee and another voting for the bill without recommendation — an unenthusiastic endorsement, at best.

As Dave Roberts points out over at Vox, Democrats in Oregon and Washington face the same problem that plagues the national party: Progressive voters tend to be concentrated in urban areas, which means that while places like Portland and Seattle trend extremely blue, the map becomes more purple and, eventually, red, as you move away from population centers.

That’s a problem because, for all the talk of conservatives and business interests getting on board with a carbon price, the policy still faces considerable opposition from industry and industry-supported lawmakers.

In Oregon, for instance, a number of conservative groups launched ad campaigns during the legislative session aimed at undermining the Clean Energy Jobs bill’s chance of passing. And Portland General Electric — one of the state’s largest utilities — opposed the bill this legislative session, arguing that as written it would raise rates for its customers. PGE lobbied legislators to make several changes to the bill, including revising the language to be less stringent.

But there are perils that come with tailoring a price on carbon too much to suit the needs of industry. This is a lesson that Washington carbon tax proponents learned the hard way in 2016, when the nation’s only carbon tax initiative was voted down at the ballot box.

The initiative was crafted by a group known as CarbonWA to be revenue neutral, meaning that it didn’t actually raise taxes, but rather funneled revenue from one tax into a tax cut elsewhere.

Conservative lawmakers like this approach because it allows them to support a price on carbon without supporting raising taxes. But environmental groups — and especially environmental justice and social justice groups — were quick to criticize the approach.

A revenue-neutral tax, they argued, would place undue burden on vulnerable communities, especially low-income and communities of color, which would bear the brunt of an increase in fuel prices without reaping benefits from investments in clean energy or energy efficiency.

Oregon appeared to learn from Washington’s mistakes in 2017, by bringing together a broad coalition of stakeholders to weigh in on the proposal that would eventually become the Clean Energy Jobs Bill. Legislators held interim hearings between the 2017 and 2018 session that involved people from environmental groups, public health groups, tribes, agriculture, and industry.

Washington also seems to be learning from the past, with environmental groups planning on bringing a carbon pricing initiative in the 2018 election that, unlike 2016, would reinvest revenue in the transition to a low-carbon economy.

Learning from past mistakes

All of this is to say that while Oregon and Washington failed to put a price on carbon — at least for the time being — they both came a lot closer than ever before to making that policy a reality.

That happened for a multitude of reasons: higher awareness of climate issues, more Democrat lawmakers in positions of power, and years spent fine-tuning policies that had failed previously.

In Oregon, activists like Renew’s Reed characterize the 2018 session not as a failure, but as an “interim victory.” More lawmakers than ever before are talking about a price on carbon as a priority issue for the next legislative session, he said, with Senate President Peter Courtney effectively telling lawmakers to come back ready to pass cap-and-invest in 2019 or to not come at all.

And a wide coalition of environmental, public health, and social justice groups in Washington have already filed their intention to get a carbon fee on the ballot in November, meaning that Washingtonians will likely have another chance to make carbon pricing a reality.

The initiative differs from the 2016 attempt in some key ways, most notably in the way that the revenue from the fee would be spent. It would go towards funding a diverse set of programs aimed at helping the state transition to a low-carbon economy, from climate resilience projects to increased energy efficiency.

These are useful lessons to learn, and hopefully states looking to Oregon and Washington for guidance on putting a price on carbon won’t look past them.

If, in 2018 or 2019, Oregon or Washington succeeds in getting a carbon price on the books, the failures of the past will have innately shaped whatever iteration becomes law, revealing the pressure points that environmental justice groups — or industry — can’t or won’t move past, and illuminating the areas where consensus might be achieved.

But those missteps will have also wasted valuable time on an issue that, unlike so many policy areas, is beholden to a fierce time horizon — the climate projections of mid-century that seemed distant at the beginning of the 21st century will be years away by the time a Pacific Northwest carbon market kicks in.

Looking beyond a price on carbon

It’s crucial that states looking to Oregon and Washington for a blueprint on climate action look not just at the states’ experience with carbon pricing, but with any number of smaller — but perhaps more consequential — energy and environmental policies.

In 2016, for instance, Oregon passed the Clean Electricity and Coal Transition Plan, arguably one of the most ambitious climate and energy laws in the entire country. It dictates that the state’s two largest, investor-owned utilities completely phase out coal power by 2030 and obtain at least 50 percent of their electricity from renewable energy sources by 2040.

A year later, Portland and the surrounding county of Multnomah voted to transition to 100 percent clean energy by 2050 — a decision that activists say helped defeat Portland General Electric’s plans to expand natural gas-fired power stations in the eastern part of the state.

In Washington, legislators are still considering whether to pass a bill that would mandate the state transition to 100 percent renewable electricity by 2045 and phase out all coal-fired power by 2030. Legislators told E&E News that they are “very close to a very big breakthrough” on the bill, which is largely modeled off a similar law in Hawaii that passed in 2015.

And where the carbon tax might have spooked Republican and Democratic lawmakers loathe to be seen as supporting a tax increase, a bill like the 100 percent renewable proposal offers lawmakers a chance to forge ahead on climate action without tying themselves to a particular tax. Instead, proponents of the 100 percent renewable bill have been painting it as a chance for the state to invest in cutting-edge technology like battery storage, which could help boost Washington’s position as a leader in green manufacturing.

Lawmakers in Washington have until March 8 to pass the bill — and, if they succeed, they’ll show the country that while a price on carbon is certainly an important step towards solving the climate crisis, it’s not the only way forward.

Action on climate includes carbon pricing, absolutely, but it also includes other things,” Vlad Gutman-Britten, Washington director of Climate Solutions, told ThinkProgress. “Climate is an urgent crisis and we need to do everything we can to un-ring the bell of emissions. The first step is starting to dig ourselves out of the hole.”