Washington leads nation in gas prices — here’s why

As you’re enjoying the beautiful weather this summer, you have likely noticed the gradual increase in gas price hikes over the past few months when you fill up at the pump. According to AAA, Washington now has the highest fuel price in the nation, surpassing California. Considering this rate of increase is unique to Washington state, it’s worth examining the main cause. 

In 2021, Gov. Jay Inslee signed the Climate Commitment Act (CCA*), creating a cap-and-trade program similar to California where major industries must purchase “allowances” based on how much carbon they emit. The refineries in Whatcom are examples of industries that are impacted by this program. 

These allowances are purchased via auctions hosted by the Washington State Department of Ecology. The money collected by the state is intended to be used to incentivize green energy projects, theoretically offsetting the carbon emissions taxed in these auctions. 

So why the sudden increase in gas prices? Though it was passed in 2021, the cap-and-trade program is being implemented this year. Even before implementation, research groups like the Washington Policy Center warned this program would likely increase the price of gas by up to 45 cents per gallon — or more. In response to these allegations, Gov. Inslee responded: “This is going to have a minimal impact, if any. Pennies. We are talking about pennies.”

As it turns out, these projections were, if anything, modest. Even though only the second auction has been held, gas prices have already increased between 35 and 52 cents per gallon since the tax went into effect this year — furthering the difference between Washington’s average and the national average. Since Gov. Inslee’s original claim, his staff quietly scrubbed from its website his statements downplaying gas price increase concerns. 

It’s pretty simple: The industries paying more because of this fee/tax just buck the regulatory costs to the customers — you and me — at the pump. The governor’s office has acknowledged this, saying industries affected by the CCA pass on costs to the consumer “similar to any business with compliance costs related to things like workplace safety or bookkeeping.” 

Here in Whatcom County, The Seattle Times recently documented how leaders with the Lummi Nation and other tribes, who were supporters of the Climate Commitment Act, “didn’t realize” how much this tax would increase gas prices. Tom Wooten, chair of the Samish Indian Nation, said of Inslee after meeting with him about the gas price increases: “I’ve lost a lot of respect for that man … I don’t think the average citizen should be taking it on the chin.”

Now that this program is up and running, even original proponents of the bill have been taken aback. 

Even before the CCA, Washington already had the third-highest gas tax in the nation. Politicians from both sides of the political aisle criticize Washington’s regressive gas tax, arguing it disproportionately impacts working families and low-income folks. The regulatory Leviathan created by the Climate Commitment Act is no different: As we fight to recover economically from a pandemic and grapple with the inflationary aftermath, these extra fuel costs add up quickly, impacting our daily lives.

Inslee’s administration has rebuffed concerns raised by tribal leaders and other critics, blaming the price increases on “compliance obligations” — not new taxes — from the CCA. Regardless of the linguistic gymnastics, here’s the bottom line: As long as the Climate Commitment Act exists in Washington, gas prices will likely continue to climb (and stay at a high price) relative to other states. 

The potential tradeoff, on the other hand, is a program that stewards taxpayer dollars wisely and makes targeted green job investments. While I’m not optimistic about this prospect, I hope that myself — and the skeptics who have been right so far — are wrong. 

* Note: The Climate Commitment Act, SB 5126, was passed in 2021. The 42nd District delegation voted as follows: Sen. Doug Ericksen, nay; Rep. Sharon Shewmake, aye; Rep. Alicia Rule, nay; 40th District: Sen. Liz Lovelett, nay; Rep. Debra Lekanoff, aye; Rep. Alex Ramel, aye. 

Simon Sefzik is a former State Senator for the 42nd Legislative District and now works for Project 42, a nonprofit aiming to build a durable infrastructure to improve the course of Washington.