SHIFT is clearing the air… without a carbon cap

The Office of Governor Jay Inslee recently attacked SHIFT for daring to tell the truth. They claim that the $1.17 per gallon of gas cost estimate we use is false. From the governor’s office,

“The $1+ cost estimate has already been debunked by the exact same consultants the Republicans claim to get the number from… That’s because there are a million different ways to design a clean fuel standard that would result in wildly different cost variables…”

Now for the truth.

SHIFT is not making up the $1.17 per gallon cost estimate. That estimate comes from Inslee’s own climate report. You can find the report here.

Here are the facts:

1. Washington State Climate Legislative and Executive Workgroup (CLEW), which includes Inslee, selected Leidos (a consulting firm) to “prepare an evaluation of approaches to reduce greenhouse gas (GHG) emissions in Washington State.
2. The report is titled “Evaluation of Approaches to Reduce Greenhouse Gas Emissions in Washington State—Final Report.” It was issued on October 14, 2013.
3. The stated purpose of the report is to ensure that all greenhouse gas reduction policies are “prioritized to ensure the greatest amount of environmental benefit for each dollar spent and based on measures of environmental effectiveness, including consideration of current best science, the effectiveness of the program and policies in terms of costs, benefits, and results, and how best to administer the program and policies.”
4. The report places the cost of a Low Carbon Fuel Standard (LCFS) between $103 and $131 to reduce one ton of CO2 emissions. By the U.S. Environmental Protection Agency’s math (one gallon of gasoline emits 0.9% of a metric ton of CO2, or 1/112th of a metric ton), that equals a cost of up to $1.17 per gallon of gas.

Knowing all these facts, now consider this:

Inslee, along with the two other Democrat members of CLEW, issued a draft proposal for the reduction of greenhouse gas emissions which they presented at a CLEW Public Hearing on December 13, 2013. You can find the proposal here.

The proposal states,

“Based on the information reviewed by the Workgroup [CLEW], we believe these policies are the most cost effective tools we have available to meet our state emission limits…”

Inslee’s proposal goes on to outline five programs to be “developed and implemented in Washington.” The first of the proposed programs places a cap on carbon pollution emissions, the Low Carbon Fuel Standard (LCFS) referred to in the CLEW report.

Ready for more truth?

The National Bureau of Economic Research (NBER) puts the cost of a Low Carbon Fuel Standard in the range of $307 to $2,272 per ton. According to the Washington Policy Center, that would place an additional $3 to $22 per gallon of gas.

From the NBER,

“For a broad range of parameters, we find that the LCFS is unlikely to increase CO2 emissions. However, the surplus losses from the LCFS are likely to be quite large ($80 to $760 billion annually for a national LCFS reducing carbon intensities by 10 percent), energy prices are likely to increase, and the average carbon cost ($307 to $2,272 per ton of CO2 for the same LCFS) can be much larger than damage estimates…”

Inslee’s office may be correct in stating that there are a “million different ways to design a clean fuel standard that would result in wildly different cost variables,” but they fail to consider… reality. The truth is that the “million different ways” has already been factored down to one way. The way Inslee repeatedly described as the most “cost effective” way… the $1.17 per gallon of gas way.

And, considering the estimates cited above, the $1.17 gas tax figure appears to be quite a generous cost estimate.