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Think tank: Gov. Inslee knew cap-and-trade could hike gas prices a decade ago

Less than six months before the carbon tax went into effect at the beginning of last year, Inslee downplayed the notion the carbon tax would result in higher gas prices.

Published: January 5, 2024 8:48am

(The Center Square) -

The Center Square – Gov. Jay Inslee has long known that a carbon tax could significantly increase gas prices in Washington state, contends the conservative Washington Policy Center think tank, which says it has the receipts to back up that claim.

In a Thursday morning blog post, WPC Environmental Director Todd Myers notes that reports from Inslee’s 2014 Carbon Emissions Reduction Task Force, or CERT, showed a carbon tax could result in a significant hike in the price at the pump.

In fact, Inslee’s then-chief policy advisor Matt Steuerwalt, based on an analysis created for the task force, told the Senate Environment, Energy & Technology Committee that a carbon dioxide price of $52 per metric ton – almost identical to the state’s current carbon dioxide price – would increase prices by 44 cents per gallon.

The calculation used by the Inslee administration for its projection is the same one used by WPC in 2022 to predict a 46-cent increase in the price of a gallon of gas.

The WPC blog notes that the Inslee administration’s cost projection was covered by the media at the time, referencing a Sept. 25, 2014, Crosscut article by John Stang detailing how studies from the governor’s office show a carbon tax would increase gas prices.

Less than six months before the carbon tax went into effect at the beginning of last year, Inslee downplayed the notion the carbon tax would result in higher gas prices.

“This is going to have a minimal impact if any,” Inslee told reporters in July 2022. “Pennies. We are talking about pennies.”

Gas prices in Washington were the most expensive in the nation this past July, with the average price at just under $5 a gallon, according to AAA. The state’s current average gas price is still among the highest in the nation.

“It has been obvious the governor and his administration knew they were lying, especially when the State of California and energy economists across the political spectrum all agreed about the price increase a tax on CO2 emissions would generate,” Myers’ blog concludes. “Now, there is no denying that Governor Inslee knew too.”

Inslee spokesperson Mike Faulk was not impressed with WPC’s broadside against the governor.

“There is nothing to substantiate this fossil fuel-funded think tank’s latest character attack on the governor,” he said in an email to The Center Square. “Digging up a previously reported, decade-old number unrelated to today’s cap-and-invest program doesn’t tell us anything about gas prices today. We don’t have to look at decade-old studies to understand the effects of Washington’s cap-and-invest program.”

As for gas prices, which Faulk described as a “roller coaster,” he noted they “are down more than a dollar since October and they are continuing to drop as we head into 2024. But we know those prices will go back up in the spring, as they do every year. The highest gas prices we’ve ever seen in Washington came back in 2022 – well before the cap-and-invest program began.”

Referencing the Department of Ecology’s 2022 analysis of the cap-and-trade program’s carbon auctions, Faulk noted that “the average price for a gallon of unleaded costs about 22 cents more today. That’s a little more than the year-over-year increase in Oregon, but less than what California has seen.”

He concluded, “And while that’s a little higher than Ecology’s economic analysis predicted, it’s half of what the Washington Policy Center and fossil fuel companies have claimed. We’re just starting the second year of this new program. As time goes on and businesses have a chance to implement emission reduction strategies, those competitive pressures will grow.”

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