Jan. 30, 2009

Cap and trade would harm our employers, economy
Rep. Barbara Bailey

There is a proposal in the Legislature that, if enacted, would harm our state employers and economy. House Bill 1819, known as cap and trade, is something I encourage you to learn more about.
 
I’d like to start with the premise that I care deeply about our environment. We should be proud that our state is one of the cleanest and greenest in the nation and its contribution to global carbon emissions is insignificant.

While our environment remains important, what many of us are worried about more is our economy. We continue to see people lose their jobs, homes and investments. While I’m optimistic our economy will bounce back, as we navigate this road state lawmakers must be mindful of how their decisions impact employers. This statement could not be any more applicable than to cap and trade.

The idea is to cap the amount of carbon emitted in the state from any business producing over a certain amount. Businesses would be required to purchase allowances at auction from a Western Climate Initiative entity to allow them to emit levels of carbon over this amount. If businesses did not have enough allowances to cover their emissions, they would have to pay hefty fines. If businesses did not use all of their allowances, they could sell them on an open market.

If all this seems confusing, that’s because it is. First, we would be one of only a few states to implement cap and trade. So when we encounter problems, we would basically be on our own. This would put our state at a serious competitive disadvantage with other states.

Second, the four options for businesses – paying penalties, buying allowances, reducing production or pursuing off-sets – are each costly. These costs would be passed on to families through higher utility, gas, energy, goods and services bills. This would be devastating for low and moderate income families and pile on to our economic woes.

Many businesses could also be forced to move, downsize or close their doors. Imagine what this would look like to an employer who wanted to start up or relocate from another state. Why would any entrepreneur or business leader want to deal with such a risky and expensive system? You could probably answer this question better than I can.

Third, cap and trade would create a new interstate commerce market of buying and selling emission allowances. The entity that would regulate this market would be untested, and the parameters of its authority are still not clear. This scenario could invite confusion, greed and artificially inflated prices that many of our businesses could not afford.

Last, our state is responsible for three-tenths of one percent of global carbon emissions, and 1.4 percent of the United States’ carbon emissions. While I support other environmental programs, including the clean-up of Puget Sound, we simply do not need a risky and expensive cap and trade system to preserve the clean and green environment we enjoy today.

If cap and trade is to eventually evolve into something less punitive to families and businesses, it will happen at the federal level. In the meantime, let’s not put our state out on a limb. Instead, let’s focus on solutions to preserve and create jobs, and balance our state budget without raising taxes. That’s what families and businesses need.

Rep. Barbara Bailey, R-Oak Harbor, represents the 10th Legislative District and is assistant ranking Republican on the House Ways and Means Committee. She can be contacted at (360) 786-7914 or bailey.barbara@leg.wa.gov. The 2009 legislative session began Jan. 12 and is scheduled to run 105 days.

For more information, contact: John Handy, Assistant Director: (360) 786-5758