Gov. Jay Inslee proposed on Monday another $941 million for action on climate change, including environmental justice, clean energy and transportation projects, in his 2024 supplemental budget. The budget would tap into stronger-than-expected revenue from the state’s carbon-pricing program.
The proposal comes toward the end of the first year of the program that makes the state’s largest emitters of greenhouse gases pay for their pollution. It would add to the $2.1 billion already allocated by lawmakers during the 2023 session for the next two years toward climate and clean energy projects.
Also Monday, Inslee’s office announced pieces of legislation for the upcoming session intended to increase transparency over gas prices, pursue linkage with the California and Quebec carbon markets, and transition Puget Sound Energy out of the gas sector and limit future methane gas use.
The additional funding also would include a one-time $200 credit on residential electricity bills for low- and moderate-income households. According to Inslee’s office, 750,000 households, about a third of all Washington households, would be eligible for the credit, which would be automatically applied to those already enrolled in low-income energy assistance programs.
The Legislature convenes its next regular session Jan. 8.
Puget Sound Energy is the state’s largest natural gas provider, and the upcoming bill would give the utility more flexibility with the state’s Utility and Transportation Commission to adopt a formal plan to decarbonize and shift away from natural gas.
The bill is a continuation of one from the last legislative session that would have banned new natural gas hookups, said Sen. Joe Nguyen, D-White Center. But the upcoming bill would not ban new gas hookups, he said.
Last month, the state’s Building Code Council voted to make it nearly impossible to use natural gas or other fossil-fueled appliances to heat new homes and buildings. Barring any legal challenges, the rules go into effect in March.
To date, Washington’s carbon-pricing program has raised more than $1.5 billion from the sale of 31.9 million carbon allowances over three quarterly auctions and two special auctions, triggered by high allowance prices. A fourth-quarter auction took place last Wednesday, though the results and prices will not be available to the public until later this week.
The carbon-pricing program is the cornerstone of the 2021 Climate Commitment Act, which requires the state’s biggest-polluting businesses to reduce their emissions or purchase allowances to cover their emissions. Each allowance represents 1 metric ton of emissions; the number of allowances available at auctions will decrease over time, ramping up pressure on industries to lower their emissions.
The goal is to be mostly carbon-free by 2050, in an effort to meet the targets of the Paris Agreement, which sets out an international framework to limit global warming to 1.5 degrees Celsius (2.7 degrees Fahrenheit).
The Climate Commitment Act currently faces a repeal effort backed by opponents who blame the law for high gasoline prices. Opponents of the law said they have submitted more than 400,000 signatures, enough for the initiative to appear on the November 2024 ballot for voters to decide.
Inslee unveiled the bills and proposals at the Miller Community Center gymnasium on Seattle’s Capitol Hill, surrounded by other politicians, supporters and children holding signs reading “healthy communities for all” and “clean energy for all.”
The governor, who has faced criticism for initially downplaying the program’s effect on gasoline prices, took the opportunity to skewer the oil and gas industry again for “sucking billions of dollars of profit out of Washingtonians and polluting the skies and destroying the future of these children.”
While gas prices have fluctuated — decreasing $0.70 since September in Seattle — the oil industry has continued to be profitable to the tune of $200 billion in 2022, Inslee said.
State Sen. Mark Mullet, D-Issaquah, pre-filed a bill for the legislative session that would scale back Washington’s early emission reduction goals and offer motorists two annual $30 discounts on their car tabs.
While emission reductions would come more slowly for Washington, Mullet said his bill would keep intact the spirit of the Climate Commitment Act (which he voted for), while alleviating the increases in gas prices it created.
Mullet, who is also running for governor, noted that the effort to completely repeal the policy is gaining traction and his bill is an attempt to preserve the state’s big-picture goal of reducing greenhouse gas emissions 95 percent by 2050, compared with 1990 levels.
Mullet’s bill seems unlikely to gain traction in the Statehouse. Nguyen, who chairs the Senate’s Environment, Energy and Technology Committee, said he probably won’t give the measure a hearing. There too little time in this year’s short session and too little time, as climate change warms the Earth’s atmosphere, to ease pressure on polluters, he said.
Politicians in support of Washington’s carbon-pricing program are hopeful that linking with the California and Quebec markets will stabilize prices. In order for that to happen, some “tweaks” to Washington’s program — and California and Quebec’s — would need to happen, including changing limits around how many allowances an individual company or trading firm can purchase and how emissions from imported electricity is reported, said Department of Ecology Climate Policy Manager Joel Creswell.
The additional $941 million for clean energy and climate projects includes:
- $322 million for communities hit hardest by pollution, including money for community decarbonization projects, electric school buses and grants to upgrade heating, ventilation and air conditioning systems in schools
- $182 million to decarbonize buildings, including heat pump installations and energy efficiency upgrades for low-income multifamily households and state universities
- $170 million to develop a clean-energy workforce
- $52 million for transportation, including electric ferries and installing electric vehicle chargers along state highways
- $140 million for climate resilience projects, including grants for fish passages and for the Washington Department of Transportation to improve stormwater quality for coho salmon.
More details will be announced on Wednesday when Inslee is expected to unveil his full 2024 supplemental budget.
