The Skagit County Public Works Department, which operates the ferry, believes it would be cheaper in the long run to get a new ferry than just replacing broken parts, said Jennifer Rogers, the department’s spokeswoman.
The price tag for a new Guemes Island electric ferry is $45 million. With $10 million from cap-and-invest revenue allocated by the Legislature to build a new ferry, the project is on its way.
The money being raised by Washington’s new Climate Commitment Act — the formal name for the cap-and-invest program — is doing more than shore up the state budget. The more than $2 billion collected from quarterly carbon auctions is being used to address climate change and for climate-adjacent projects like the ferry system.
A November referendum has been set in which Washington voters will decide whether to repeal the program funding hundreds of projects like the new ferry, which is expected to transport about 200,000 vehicles and 400,000 passengers a year.
The Skagit County Public Works Department estimates it will take 18 to 24 months to build and test a replacement ferry. This project may be slowed or even canceled if voters choose to repeal the Climate Commitment Act.
Last spring, the Legislature allocated $1.08 billion in cap-and-invest revenue for fiscal 2024-2025, of which $848.6 million comes with the caveat that the appropriations become effective on Jan. 1, 2025. That means if the cap-and-invest program is repealed in November, that $848.6 million worth of projects disappears. Overall, the cap-and-invest program has raised roughly $2.15 billion since Jan. 1, 2023.
Every quarter since the beginning of 2023, the state has been auctioning carbon emission allowances to polluting industries. The program has been blamed for a 21- to 50-cent-per-gallon increase in gasoline prices, but the reasons for gas price fluctuations are actually much more complex, and the price of gas has gone up and down since the new program started.
Since bidding participation is kept confidential, no public information is available on which oil companies have bought allowances and how much they have purchased. Therefore, it is impossible to tell if the finances of all oil companies and gasoline providers are affected equally, even though gas prices usually go up and down in unison. Fuel prices increase or decrease due to numerous national, international, political, geographic and economic factors.
Only Washington and California have cap-and-trade programs; a few other states are considering joining, but first they want to see how Washington’s voters react in November.
Opponents of the cap-and-invest program — led by Rep. Jim Walsh, R-Aberdeen and chairman of the state GOP, and Brian Heywood, leader of Let’s Go Washington, which collected signatures to put conservative initiatives on the ballot — argue that the Democrat-controlled state government is forcing people to pay more for gasoline to fund its pet programs.
Supporters of the cap-and-invest program, however — led by Democratic leaders and liberal organizations — argue that the revenue is paying for numerous programs scattered geographically and demographically across Washington. At least 30 percent of the money raised in carbon auctions is supposed to go to disadvantaged communities, especially those disproportionately affected by pollution.
Gov.Jay Inslee began pushing for some type of cap-and-trade program in Washington more than a decade ago. For Inslee, the environmental and health impacts of the program take priority over the economic benefits.
“The basic fundamental purpose of this program is to reduce pollution. The second part is to help Washingtonians with the investments. … The investments are broad. The program is not one thing. It’s many, many things,” Inslee said at a May 13 briefing.
Rep. Walsh contends some of the cap-and-invest-funded programs should be discontinued, while others should be financed by other means. “These are not the best use of the taxpayers’ resources. The state needs to live within its means with tighter budgets. … The state continues to operate with a budget surplus, so we do not need this carbon tax scheme,” he said.
Heywood contends the cap-and-invest program is merely a way for the governor and Democratic lawmakers to pass out money to special interest groups in exchange for votes. “These are just the lollipops that Gov. Inslee is handing out. These would qualify as bribes … This is $2 billion taken off the backs of drivers. … The [Climate Commitment Act] is not a virtuous program,” Heywood said.
In response to Heywood’s accusations, Inslee’s office referred the matter to the No On 2117 campaign, a coalition of roughly 250 organizations that oppose the initiative and want to keep the cap-and-invest system.
In an emailed statement, No On 2117 did not address the bribery accusations: “The millionaire backer of I-2117 has made it crystal clear that his goal with this extreme plan is to roll back protections for our air and water and cut investments in transportation.”
As an example of a cap-and-invest boondoggle, Heywood cited a $4 million appropriation to the Washington Department of Ecology and Whatcom County to deal with flooding in the Nooksack River basin. He said the $4 million merely creates a bureaucracy without actually installing any dikes or other flood-control measures.
A massive 2021 Nooksack River flood displaced 14,000 Canadians and 500 Whatcom County residents from their homes, prompting a 2022 agreement between British Columbia and Washington to prevent future floods. The 2024-2025 cap-and-invest budget allocated $2 million to Whatcom County for flood control planning and technical studies, $900,000 for coordinating with British Columbia, $738,000 for Whatcom County government staff to work on flood prevention, $364,000 for the Washington Ecology Department and other local governments to work on flood planning.
“Given the devastating impacts of the 2021 flood and that climate change will bring increased flood risk to the basin, this is important work that brings together groups on both sides of the border to collectively develop durable solutions that will reduce flood risk, increase community resilience, and restore habitat,” Washington Office of Financial Management spokesman Hayden Mackley wrote in an email.
Gary Stoyka, natural resources program director of the Whatcom County Public Works Department, said in an email that the county’s portion of the $4 million “supports a process that will lead to the construction of infrastructure and other features to address this problem. We cannot build much of anything, particularly involving entities outside of the U.S., without a plan and buy-in from the affected communities.“
Heywood also noted that former state senator Reuven Carlyle, architect of the cap-and-invest legislation, founded Earth Finance, a consulting firm for corporations seeking to cut carbon footprints while remaining profitable. He sees this as Carlyle profiting off the cap-and-invest program.
Carlyle said Earth Finance has not done any business with any project receiving cap-and-invest money.
“Brian Heywood’s 100-percent-false accusation about me personally is a reflection of the deceptive and misleading Initiative 2117 that will do absolutely nothing to reduce gas prices, but is 100 percent certain to increase pollution and eviscerate transportation funding statewide,” Carlyle said.
He said cap-and-invest was designed to create clean-energy jobs, invest in ferries, provide free public transit for youth, support sustainable aviation fuel, improve wildlife protection, boost salmon recovery and other projects.
In broad strokes, the $1.08 billion in cap-and-invest dollars the Legislature allocated for 2024-2025 includes money for electric vehicle chargers, electric fire engines, buses and other government vehicles. The money will be used to pay to preserve forest lands, build trails, and make public schools and universities more energy-efficient. It will buy solar panels to generate electricity in public and private buildings. And it will pay for a Kitsap Transit hydrofoil ferry. and fund salmon recovery efforts.
The Legislature also set aside $184 million in cap-and-invest revenue for the upcoming 2025-27 biennium to build two hybrid electric/diesel ferries to get them running by 2028.
Much of the money collected is to be distributed in grants to local governments, tribes, ports and other organizations.
Fusion power
About $256,000 of Climate Commitment Act money has been appropriated to develop a fusion reactor industry through 2024’s House Bill 1924, which sets up a public/private partnership that is supposed to report back to the Legislature this December on how to boost and regulate fusion energy in Washington.
Helion Energy of Everett is among the leaders in developing a fusion reactor capable of providing electricity to homes and industry. A fusion reactor is expected to be smaller, cheaper and safer than the huge fission nuclear reactors that currently dot the world. The physics and engineering of splitting an atom is simpler than slamming two atoms together during fusion. But a fundamental problem with fusion is that it usually takes more energy to create the nuclear reaction than is generated.
Two breakthroughs have occurred in recent years. In 2022, Helion heated the plasma within its prototype reactor to 100 million degrees Celsius for a millisecond, a key benchmark in eventually generating power. Later that year, using a different approach, the Lawrence Livermore National Laboratory in California also reached the 100-million-degree mark, with the produced energy being slightly greater than the power used to create it.
The Wall Street Journal reported in 2023 that Helion had signed a contract with Microsoft to provide it with a 50-megawatt fusion reactor by 2028 and provide a 500-megawatt reactor for steel manufacturer Nucor Corp. at one of its American plants by 2030. The WSJ also reported that Silicon Valley entrepreneur Sam Altman, head of Open AI and chairman of Helion’s board, is trying to work out an agreement in which Helion provides power to several data centers — which, the WSJ reported, could raise conflict-of-interest issues.
Besides Helion, three other fusion energy companies are in Washington: Avalanche, a fusion energy start-up in Seattle designing micro-fusion reactions; Zap Energy is building a system; and Kyoto Fusioneering is creating key fusion reactor plant components.
Heat pumps
The Legislature appropriated $55 million for the 2023-2025 budget biennium for grants to install heat pumps as well as insulation through regional and local programs. The future of this program will be decided by voters in November.
While not as glamorous as fusion reactors, this bread-and-butter endeavor would send cap-and-invest revenue to save energy in homes across Washington, from apartments to houses. The target is 8,000 housing units, with at least 30 percent of them in rural communities. An important part of this program is to seal up homes so less heat escapes. “We’re paying not to heat up the outdoors,” said Nate Lichti, housing investment manager for the Washington Department of Commerce.
Trapping carbon
Another project dependent on the initiative passing this fall is a $5 million project aimed at capturing carbon in the soil. Huge amounts of carbon are trapped in the earth with the potential to be released into the atmosphere. The state is waiting for the results of November’s referendum before dividing up this money, said Dani Gelardi, senior soil scientist at the Washington Department of Agriculture.
Potential measures include increasing no-till farming in Washington. “No till” means a shallow furrow is scooped out for plant seeds, rather than being overturned, which increases the chances of carbon being released. Cover crops could be planted after harvests, drawing carbon dioxide out of the air and injecting it through their roots into the ground. And methane could be captured from dairy farms.
The science of keeping carbon in the soil is still in its infancy. “We are at the scratching-our-heads stage, but a lot of researchers are working on this,” Gelardi said.
Salmon habitat restoration
Another $58.3 million has been allocated in grants to many agencies and organizations for numerous non-glamorous projects to make rivers, streams and deltas better places for salmon to travel through and rest.
Global warming heats these bodies of water to temperatures that threaten the salmon’s health. These projects include planting shade trees, installing dikes to control streams and creating eddies within those same streams and rivers. These programs also depend on the November referendum results.
