A Seattle-based conservative think tank says Gov. Jay Inslee (D) knew nearly a decade ago that Washington’s cap-and-invest program — launched in 2021— would dramatically increase gasoline prices in the state.
In 2021, Inslee and other Democrats contended that cap-and-invest — which went into effect Jan. 1, 2023 — would increase gas prices by “pennies on a gallon.” In reality, prices at the pump have increased 21-50 cents per gallon, depending on how the calculations are done.
In a press release issued Jan. 4, the Washington Policy Center (WPC), a “free market” think tank opposed to the cap-and-invest program, noted that one of Inslee’s staff members briefed the Washington Senate’s Environment, Energy and Technology Committee in 2014, predicting that a cap-and-trade program could raise gas prices by 44 cents per gallon.
“It has been obvious the governor and his administration knew they were lying,” Todd Myers, the WPC’s environmental director, said in the press release.
Asked by NetZero Insider whether it was appropriate to compare 2014 and 2021 calculations on different incarnations of cap-and-trade, Myers emailed in reply: “The physics and math haven’t changed. Gasoline still emits 19.6 pounds of CO2 per gallon.”
Myers argued that the two incarnations of the program are the same, but Democrats in the Washington Legislature made significant changes and compromises in the cap-and-invest legislation in 2020 and 2021 to get enough votes to pass the program.
At a Jan. 4 press conference in Olympia, Inslee pointed to the challenge of predicting the movement of gasoline prices. The Washington Department of Ecology, which administers cap-and-invest, came up with the “pennies per gallon” estimate partly based on estimates from California’s cap-and-trade program.
“Ecology made a good faith effort. It’s like a weather report — hard to predict,” Inslee said.
The governor said the state’s experts predicted lower gasoline price increases because they expected allowance auction prices to be similar to California’s when it began its program in 2012. Auction prices have been a factor in setting gas prices.
Washington’s quarterly settlement prices in 2023 — $48.50 to $63.03 per metric ton of emissions — were much higher than what state experts predicted in 2021. By comparison, California’s allowance prices started at $10 in 2012 and rose to slightly above $36 in 2023.
A reason for California’s lower auction prices is that Washington is trimming carbon emissions at roughly twice the rate as the Golden State over the next decade before flattening out, according to observers. That translates to Washington having fewer allowances to auction off than California, driving up prices in the Evergreen State.