Over the last couple of weeks, there’s been a lot of hand-wringing about the state of climate policy in the Northwest. Washington’s citizen-backed renewable energy standard is in jeopardy and neither Oregon nor Washington appears close to implementing the Western Climate Initiative. Even British Columbia’s pioneering carbon tax is taking fire.

Freak out! Everybody panic!

Or not. If you take a sober look at regional climate policy, you’ll see that it’s still percolating.

Yes, it’s true: things are not as good as we would like. Legislative prospects for regional cap and trade this year look dim. For the past six months, we have been hoping that the three Northwest jurisdictions — BC, Oregon, and Washington — would sign off on the recommendations of the Western Climate Initiative (WCI), kick-starting what would be the most comprehensive and progressive carbon pricing program anywhere on earth. Don’t lose sight of that: WCI would be the best carbon-reduction plan anywhere in the world. We haven’t exactly set a low bar for progress.

(Actually, we have been aiming at an even higher bar. We wanted the Northwest jurisdictions to improve upon the WCI, enhancing equity through full auctioning plus rebates targeted at lower income families.)

In case the Eeyores haven’t noticed, the legislature is still in session in Oregon and Washington. And anyone who knows anything about politics knows that it’s tough to know anything about politics. Things can change quickly and unexpectedly—and many of us are still working hard to see WCI become a reality in the Northwest. So let’s not start the Monday-morning quarterbacking while there’s still time left on the clock.

  • Oregon Governor Kulongoski remains determined to leave a green legacy, one that includes cap and trade. And this week Washington Governor Gregoire took the unusual step of testifying before a House committee, urging lawmakers to move toward WCI’s cap and trade program. Whatever else happens this session, you can bet that Governor Gregoire hasn’t played all her cards yet. And if you want to see how serious she is, here’s the governor saying in unequivocal terms that she will be fighting for the bill:

    You may recall that last year, late in the session, she marched in to arm-wrestle state leaders into signing off on HB 2815. It was a landmark piece of legislation that set Washington’s climate targets into law, among other things.

    In part, Governor Gregoire’s appearance in the House may have been in response to a week’s worth of blistering editorials from the state’s most respected newspapers, including the Olympian, the Seattle Times, and the Seattle Post-Intelligencer (pause for reverential silence). Here’s a sample from the Everett Herald:

     So when the Senate passed E2SSB 5735 last week, it took all the teeth out of the governor’s cap-and-trade plan, essentially calling for more study. The House needs to do better, at least by establishing a hard-and-fast emission cap, even if it means taking more time to develop the particulars of a trading system.

    Take a moment to grok that. We’re at a place now where newspaper boards across the state are demanding answers. They want to know why don’t we have WCI’s cap and trade already.

    Astonishing! I should know. My job includes talking to journalists and opinion leaders and I can personally attest that a few months ago, cap and trade did not event register as a faint blip on the radar screens of many major Northwest scribes. And legislators? In preliminary conversations, I considered someone to be on the informed end of the spectrum if he or she had even passing familiarity with the term “cap and trade.”

    Nowadays, editorial boards are demanding cap and trade. What’s more—in fact, what’s most impressive — is that they understand the details. They want assurances about the features of policy design that wonks like me stay up late worrying about, things like auctioning rules, emissions thresholds, and secondary market governance. To me, this is almost as huge a turnaround as if my five-week-old son started sleeping through the night.

    That’s not all that’s changed. Over the last year, climate advocates forced the hands of the region’s biggest polluters. Scores of businesses, utilities, and local governments have put themselves on record asking that cap-and-trade programs include transportation fuels, the single largest source of emissions in the Northwest. (Here’s one list. Here’s another.) Including transportation fuels is a huge win for comprehensive carbon limits; one that will not go unnoticed by federal lawmakers—especially when we tell them.

    Perhaps even more importantly, during the debates in Olympia some of the most outspoken opponents went on the record opposing state policy on the grounds that they prefer uniform federal policy. (I’m looking at you, Western States Petroleum.) You can bet those endorsements of federal cap and trade will make their way to Washington, DC. (Hat tip to the Northwest’s National Wildlife Federation office.)

    The same sort of shift has occurred in Canada. Though British Columbia’s well-crafted carbon tax has become a political liability for the ruling Liberal party in some parts of the province, it also appears to have borne fruit across the country. At the Canadian federal level, there’s a robust discussion over whether the future holds carbon taxes or a North American-wide cap and trade program. Though Prime Minister Harper remains an obstacle, it appears the political tides may have turned, in part because of the four Canadian provinces that have joined the WCI, especially giants Ontario and Quebec, which are moving to adopt a joint cap and trade program.

    That’s not to say there aren’t lessons from the last half year. Foremost among these is my new axiom: “you can’t predict the future.”

    Two big events changed everything. The first was the economic implosion. It’s little wonder that state officials’ attention has be
    en diverted. They’ve already got plenty of fish to fry: multibillion dollar funding gaps that will scorch universities and pre-schools, social services and prisons, road repair and state parks. Given the economic context, the mere fact that the legislatures in Oregon and Washington are still considering putting a price on carbon is remarkable.

    The second big event is Barack Obama. Obama winning the presidency was hardly a foregone conclusion in the months leading up to the election. Plus, as president, he’s giving every indication that he go all-out to deliver comprehensive, fully auctioned cap and trade with built-in protections for working families.
     
    Like two storm systems converging, Obama and the economy merged this winter. The result was to a vacuum that temporarily sucked the air out of regional carbon pricing.

    Why temporarily? Because there’s a corollary to my axiom about not being able to predict the future: “you still can’t predict the future.”

    Yes, prospects seem improved for federal climate action, but we cannot know what will happen in Congress. Already eight centrist US Senators have raised red flags. And the opponents of carbon constraints are motivated, ruthless, and marinating in cash. So even in the Obama administration, national carbon limits may face an uphill battle.

    If federal action loses steam, regional policy will return to the front burner. And there’s a feedback loop. Part of the reason why federal legislation is finally cooking is because states and provinces including those in Cascadia have been successful in bringing regional carbon policy to a boil. Set WCI and the other regional programs aside to cool and federal lawmakers may suddenly lose interested in nationwide cap and trade.

    Or it may be that federal climate policy is watered down, and regional programs can step up to more comprehensive and fairer versions of cap and trade. We just don’t know how regional policy will interact with federal law. As I’ve said, you can’t predict the future.

    So chill out, hand-wringers! If WCI doesn’t pass legislative muster this spring, I’ll join you at the bar for an evening, but then it’s right back to work in the morning. Even without a big win this Spring, we’re still making good progress.