Another push for a low carbon fuel standard, despite its being found to be ineffective and costly in California.

Gov. Inslee is making another push for a low carbon fuel standard (LCFS). Looking back we found our first post on this was in 2015, when it nearly scuttled that year’s comprehensive transportation package. In 2019, the LCFS was back. This week, TJ Martinell in The Lens reports,

Governor Jay Inslee’s Jan. 14 State of the State speech focused primarily on a low carbon fuel standard (LCFS) proposal that in past session has failed to clear the legislature and funding homelessness prevention programs.. Some building advocates say an LCFS would only make housing less affordable, which the state Department of Commerce cites as a driver of homelessness…

Inslee also touted the LCFS proposal via SB 5412 intended to reduce greenhouse gas emissions in the state’s transportation sector. LCFS programs generate credits for entities that provide fuel below the standard and deficits for entities that provide fuel above it. If a deficit occurs, entities must purchase credits from clean fuel providers.

AWB has identified significant downsides to the LCFS, noting that the Puget Sound Clean Air Agency is promoting a regional LCFS that “e would raise the cost of gasoline by up to 57 cents per gallon by 2030 and raise the cost of diesel by up to 63 cents per gallon over the same time period.”

AWB opposes a LCFS for several reasons, beyond that major cost:

  • The regulation will impose private-sector infrastructure costs of up to $2 billion in order to achieve compliance;
  • The PSCAA estimates an LCFS would reduce the Gross Regional Product (GRP) under every scenario considered;
  • In the scenario chosen, the LCFS would reduce the GRP across Washington state by $1.4 billion between its first year of implementation and 2030;
  • The only potential air quality benefit demonstrated is a reduction in particulate matter with a diameter less than 2.5 micrometers, which the agency plainly admits is “mainly as a result of federal vehicle standards”;
  • The agency’s economic analysis does not quantify any of the other pollutants that make up greenhouse gas emissions, nor does it offer any form of an estimate on how regional emissions would be impacted as a result of implementing a LCFS;
  • California officials estimate their LCFS has reduced greenhouse gas emissions in the transportation sector by just 1.4%; and
  • California Legislative Analysis’s Office officials conclude the LCFS is the most inefficient method of reducing greenhouse gas emissions and recommend the state should “amend or eliminate it” all together.

The Lens quotes a building industry representative on the impact of an LCFS on housing costs.

Building Industry Association of Washington Government Affairs Director Jan Himebaugh told Lens recently that an LCFS would also inevitably raise the price of houses. “Residential construction workers aren’t on one job site every day. We have multiple projects across town. It adds a significant amount of money to get to a job to build it, let alone the costs to bring materials to a job site. Material delivery is going to be more expensive.”

In the Everett Herald, Jerry Cornfield reports the measure may face tough sledding in the Senate, as it did last year.

The same moderate Democrat, Sen. Steve Hobbs of Lake Stevens, is running the transportation committee. And he still views a low carbon fuel standard as a pricey and ineffective tool for reducing tailpipe emissions, the largest source of climate-damaging pollutants in Washington.

Enough of Hobbs’ Democratic colleagues apparently shared this position last session to deter caucus leaders from pulling the bill out of the committee and to the Senate floor for a vote.

Cornfield points out that the caucus has a new member. But, Hobbs has a plan.

Hobbs seems to be more of a climate practicalist. He knows it will cost money to save the planet for future generations. He just thinks those paying should be able to reap some benefits now.

To that end, he came up with Forward Washington. It’s a 10-year, $16-plus billion package of transportation improvements largely paid for with a 6-cent hike in the gas tax and new fees on carbon emissions and development. He said he’d swap cap-and-trade for the carbon fee, if it would help win support.

He argues it’s the best available means at the moment for generating enough revenue to undertake major road projects, like replacing the I-5 Columbia River bridge and U.S. 2 trestle, complying with a federal court order to eliminate fish passage barriers, and curbing tailpipe emissions.

And he, too, cites the California Legislative Auditor.

That study found “a broad consensus” among economists that pricing carbon with a cap-and-trade system or a carbon tax is the most cost-effective way to reduce emissions. In contrast, some of the major policies aimed at reducing emissions in the transportation sector — such as the low carbon fuel standard (LCFS) and financial incentives for zero-emission vehicles — appear to be much more costly.

It does seem odd to pursue a policy that has been demonstrated to be inefficient in green California.  An issue to watch closely in the short session.