The Case Against a Market Solution to Reduce Greenhouse Gas Emissions: Towards a Just Transition

Public Hearing on HB 1314, Photo by Edgar Franks
Public Hearing on HB 1314, Photo by Edgar Franks

January 27, 2015, Olympia, WA – The fact that Governor Jay Inslee is fully behind the proposed Carbon Pollution Accountability Act (CPAA), also known as HB 1314, raised enough eyebrows from both sides of Washington state’s partisan divide to fill the halls of congress this afternoon. The public hearing for the Congressional Environmental Committee in Olympia  was filled to capacity, overflowing into a secondary viewing room which was also filled to capacity. Those who got to present on the first day of hearings offered rehearsed appeals both for and against the bill and a second hearing is set for Thursday, January 29, 2015 to accommodate those who did not get a chance to testify.

According to the drafters of the legislation the bill proposes implementing a carbon pollution market program to reduce greenhouse gas emissions.

What are Greenhouse Gasses?

Greenhouse gasses are those gasses that create a barrier (greenhouse effect) in the atmosphere that absorbs sun rays (infrared radiation), resulting in the artificially elevated heating of the earth (global warming). These gasses include carbon dioxide, methane, nitrous oxide, water vapor, sulfur hexaflouride and Chlorofluorocarbons which are released into the atmosphere (emissions) as exhaust fumes produced by biological, industrial manufacturing, agricultural, metal production, energy production, oil refining and other capitalist processes.

What is a Market Program aka Cap & Trade?

A market incentive approach for controlling greenhouse gas emissions, the primary contributor to global warming. This economic scheme sets a “cap” (limit) on emissions, and allows stakeholder corporations to “trade” for credit if they must pollute beyond set emissions limits.

HB 1314 proposes to do this is by legislating the following process to accomplish the above:

  • Establishing a market based greenhouse gas (GHG) emissions program to be implemented by the Department of Ecology.
  • The GHG emissions program must limit statewide emissions to levels, established for 2020, 2035, and 2050 by requiring facilities, fuel suppliers, and electricity importers whose annual GHG emissions exceed 25,000 metric tons of carbon dioxide equivalent to obtain emissions allowances, beginning July 1, 2016.
  • Distribute allowance auction proceeds to transportation projects, education, housing assistance programs, a sales tax rebate to low-income persons, a business and occupation tax credit for certain energy-intensive industries and rural economic assistance programs.

Governor Inslee’s aid, Chris Davis presented to the Congressional Environmental Committee a chart of WDNR Fire Suppression Costs from 1971 to 2014 that showed the cost of suppressing fires in Washington rising to over $250,000,000 as evidence of the cost of climate change to the state of Washington. He argued that all Washington residents would support the governor’s proposed investments in transportation infrastructure economy and community health, and that all would benefit from cleaner air.

Davis explained that the target of the bill was the 130 top polluters in the state which were responsible for 80% of the emissions. He explained that the CPAA would reduce carbon emissions in 5 steps:

  1. Limit the emissions by reducing the emissions of the 130 top polluters gradually.
  2. Providing Allowances to industries that produce emissions and allow an auction of allowances where industries can trade for more allowances. 1 metric ton of emissions is equal to 1 allowance.
  3. For the industries to report their emissions and for the state to monitor emissions.
  4. To invest the revenue generated from the CPAA back into communities. This includes $400 million to be invested in transportation including transit, roads, bridges, electric car incentives. $380 million to be invested in education, K-12, full day kindergarten. $163.5 Million to be invested into low-income housing and rebates.
  5. To create a compliance process that will take place every 3 years.

A total of nine panels proceeded to testify for and against the bill, every single one of them speculating about the cost and benefits of the economic impact that the legislation would have to their own private interests.

For the side that spoke in favor of the bill, most spoke of the economic benefits the bill would have upon the creation of infrastructure, niche markets in alternative energy, design, manufacturing and entertainment (Skiing and retail); most of the NGO’s present emphasized the economic benefits of the reinvestment of the anticipated revenues to the housing, public health, education and transportation initiatives that they were championing; while Labor spokespeople spoke on both sides of the issue bringing up conflicting speculations about the anticipated positive and negative impacts upon job creation and corporate flight.

The side that spoke against the bill delivered mostly rhetorical and storytelling speculations about how the cost of production would “trickle down” to imaginary consumers that included little old grandmothers and small business owners who were inept at managing their business compared to the highly capable corporations that would simply leave or pass down the cost to the imaginary consumers. When it came down to how much the proposed initiative would actually cost these corporations, every single one of the nay sayers had a concrete number, most were for transportation costs based on an anticipated increase in the cost of fuel.

Very few of those testifying in the 9 panels talked primarily about the primacy of reducing carbon emissions, every single one, however, had something to say about the money.

Market solutions are just that, they are a compromise with large corporations that have everything to do about the money.

TOP POLLUTERS IN WASHINGTON: 
1. Transalta coal plant, Centralia [Scheduled for decomission in 2025]
2. BP’s Cherry Point Refinery, Blaine, WA
3. Shell Puget Sound Refinery, Anacortes, WA
4. Phillips 66 Refinery, Ferndale, WA
5. Berkshire Hathaway’s Natural Gas Plant, Chehalis, WA
6. Clark Public Utilities Natural Gas Plant, Vancouver, WA
7. Puget Sound Energy’s Mint Farm Natural Gas Plant, Longview, WA

SOURCE: EPA Report, Whatcom’s Oil Refineries among top polluters in [WA] State

Dashboard 5
Slide1
Urban Latino Enclaves vs. Carbon Emissions Polluters

For Latino urban enclaves and the diverse frontline communities in which they live reducing carbon emissions is not a matter of money, it is a matter life and death. It is for this reason that some community stakeholders who testified on Tuesday both for and against the bill did not deny the impact that emissions have upon the lives of these frontline communities.

Tukwila city Councilman De’Sean Quinn, for example cited the fact that african americans, immigrants and refugees in his city suffered from the “highest rates of asthma” as a frontline community. WCAN Political director Mauricio Ayon pointed out that the most impacted communities by climate change are people of color and those with lower incomes, while the top polluters are affluent and white. Jeff Johnson, the president of the Washington State Labor Council urged the environmental committee of the urgency of moving towards a Just Transition away from fossil fuels.

What is Just Transition?

Just Transition is a multi-faceted proposal to transition away from extractive economies including fossil fuels, incineration, agrofuels, nuclear energy and other manufacturing processes that cause ecological harm. The framework proposes justice for workers and those impacted by extractive industries by creating new jobs and a safety net to ease the transition out of a dependence upon fossil fuels with the full participation of impacted communities.

Source: Climate Justice Alliance/Our Power Campaign

Slide1
Latino Enclaves Vs. Environmental Impacts

When it comes to the entire state of Washington it becomes clear that the majority of Latino Enclaves are clustered around major environmental hazards, they are frontline communities impacted by Environmental Racism.

What is Environmental Racism?

“Environmental racism is the disproportionate impact of environmental hazards on people of color.”

Source: EJ Net

Latinos are not the only environmental hazard impacted frontline communities in Washington State. Tribal Reservations for example are also clustered around major environmental hazards.

Slide1The Lummi Nation for example in Northwest Washington has three of the state’s top polluter’s next to a sacred site, at Cherry Point. The BP Cherry Point Refinery, Blaine, WA emitted 2.6 Million Tons of CO2, the Phillips 66 Refinery in Ferndale, WA emitted 2.6 Million Tons of CO2, and the Alcoa Intalco Works site in Ferndale, WA emitted 1.2 Million Metric Tons of greenhouse gasses according to the last EPA report cited above. The Yakima and Wanapum Nations also have sacred sites located on the Hanford Nuclear Reservation in Central Washington. They are some of the most impacted communities yet they will not directly receive any of the proposed revenue gathered by Governor Inslee’s Cap and Trade bill.

Slide1

Black and African American communities as recorded in the 2010 census are also located along the frontline communities where oil refineries and natural gas power plants are operating in Washington State, Tukwila Councilmember Quinn spoke to the prevalence of Asthma as one result.

Slide1

Asian American Communities, similar to the Latino enclaves are also clustered around environmental hazards in the state of Washington. At the hearing a representative of the Asian Pacific Islander Coalition urged the environmental committee to act to stem emissions.

It is important to note that under Governor Inslee’s plan, none of these impacted communities will see an immediate reduction in greenhouse gas emissions as they are most impacted by the state’s top polluters who will have the ability to either purchase more allowances at auction, or as the naysayers believe relocate offshore and leave many of the workers in these communities without a transition to alternative employment; furthermore as brought up by an REI spokesman, none of the revenue is being invested into cleaning up the damage that has already occurred in the environmental hazard impacted communities. As Mauricio Ayon had inferred earlier, it is the most impacted who will bear the brunt of the negative impacts of this policy as he mentioned, “wealthy people have the ability to adapt, but not the poor”.

Frontline communities who are most impacted agree with the science of Climate Change and Governor Inslee’s imperative to act to reduce Greenhouse Gas Emissions for the future sustainability of the state. However, under HB 1314 frontline communities are being thrown under the proverbial bus when it comes to justice. Without a Just Transition away from Fossil Fuel Economies there can be no Environmental Justice for those who have been targeted by Environmental Racism. This is why that road to a Just Transition requires the full democratic participation of these frontline communities as major stakeholders. As the hearing demonstrated, most of frontline communities agree with the governors call for a carbon tax, however a market solution is not the best path towards restoring the environment as it misallocates funding towards projects that very clearly line the pockets of special interests that did not directly include any recourse for Latinos, Native Americans, Black and African Americans, and Asian and Pacific Islanders.

What is a Carbon Tax?

A carbon tax is an economic approach to controlling greenhouse gas emissions that seeks to deter excessive pollution by making it expensive. The state sets emission standards and polluting corporations must pay a “carbon tax” for any emissions that exceed the set limit.

What is a Moratorium?

A moratorium is the temporary prohibition of an activity. In the case for carbon emissions, a moratorium would require energy corporations to stop the extraction of fossil fuels and to deplete the fossil fuel reserves they have accumulated before the matter is taken up again.

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