Inslee: WA to receive $900M surplus from pollution credits

Governor Jay Inslee’s administration is set to receive a substantial windfall from pollution credits paid by the oil and gas industry, exceeding initial projections by nearly $900 million. The announcement was made during a presentation at Seattle’s Miller Community Center, where Inslee outlined his proposed allocation of these unexpected funds over the next two years.

Originally anticipating $2.1 billion from quarterly carbon credit auctions for the 2023-2025 biennium, the Department of Ecology revised its estimates upward to approximately $3 billion. Specifics regarding the allocation of the additional $900 million are slated for release Dec. 13 with the unveiling of the 2023-2025 supplemental budget.

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Among the proposed allocations is a provision for a $200 electric utility bill credit, catering to roughly one-third of the state’s households meeting specific low-income criteria. Inslee reiterated his objective of gradually phasing out fossil fuels, emphasizing the significance of this unexpected revenue in advancing this agenda.

However, critics contend that companies involved in the auction of pollution credits are transferring the financial burden back to consumers through inflated gas prices. Inslee rebutted these claims, dismissing the notion of a direct correlation between the auction and elevated consumer costs during a statement on Monday.

Inslee’s stance aligns with his ongoing support for the Climate Commitment Act (CCA), which faces opposition in the form of Initiative 2117, spearheaded by State Rep. Jim Walsh, R-Aberdeen. Backed by an estimated 420,000 signatures, the initiative aims to repeal the CCA, citing escalated fuel and energy prices and dubbing it a “hidden tax.”

The Secretary of State’s Office is in the process of evaluating the initiative’s eligibility for ballot inclusion, a move that Inslee cautioned could have detrimental effects on the state’s economy.

“The folks behind the repeal of the Climate Commitment Act are aiming to severely impact Washington’s economic stability,” Inslee warned during Monday’s address.

If certified, the initiative would be presented to lawmakers for adoption in the 2024 session, a scenario unlikely to materialize given the Democratic majorities’ support for the CCA passed merely two years ago. Failure by lawmakers to address the initiative would prompt a statewide vote in November 2024.

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Inslee also highlighted the areas where the additional CCA revenues would be directed, emphasizing support for clean energy initiatives, clean transportation for schoolchildren, job creation in sustainable industries and aiding communities disproportionately affected by pollution.

“They (oil and gas companies) should not be able to pollute in unlimited amounts in the skies of this state of Washington,” Inslee said. “Washingtonians deserve a limit on pollution. That’s what they’ve got.”

In addition to the proposed spending, the governor’s office announced plans for new legislation aimed at enforcing transparency in gas pricing strategies, pursuing linkage with California and Quebec carbon auction markets.

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