OLYMPIA, Wash. — Starting January 1, 2023, drivers in Washington might have to shell out even more for a gallon of gas, but just how much the increase could be is widely debated.
A new law passed by state lawmakers, aimed at curbing carbon emissions, takes effect in less than two months. And, depending on who you listen to, the increase in gas prices could be dramatic or just a few cents per gallon.
People on social media are widely sharing false claims that the state is adding a 46-cent per gallon gas tax. There is no new gas tax, however, the state did add a carbon fee that could impact the price at the pump.
Here is what’s actually changing.
THE QUESTION
Is Washington putting another 46-cent state tax on each gallon of gas? Over the existing tax? - from KREM 2 viewer Brandy.
THE SOURCES
- Joel Creswell, Washington State Department of Ecology
- Todd Myers, Environmental Director at Washington Policy Center
- Colin Murphy, UC Davis
THE ANSWER
We can VERIFY, no, there is not a new gas tax in Washington state. However, companies that emit greenhouse gases may need to pay a new carbon emissions fee.
Some argue that the new fee will hurt consumers, as they say, the companies who have to pay the carbon fees will pass the extra cost onto consumers at the gas pump.
The Washington State Department of Ecology says since the law has not yet taken effect, it is unclear what the impact will be. Also, how much it will cost drivers is going to depend on many factors and is yet to be seen.
WHAT WE FOUND
The policy at the center of this debate is the Climate Commitment Act passed by the democratically led state legislature and signed into law by Governor Inslee last year.
It means, starting in January, many companies that emit CO2 gasses will be charged a carbon offset fee based on how much CO2 emissions they produce. The more emissions, the higher the fee.
To be clear, that’s not the same as a gas tax that consumers pay on top of every gallon of gas. It’s a fee that companies that produce CO2 emissions pay.
What some analysts and the Washington State Department of Ecology disagree on is how much companies will increase costs to consumers to cover their emission fees.
Joel Creswell with the Washington State Department of Ecology says drivers likely won’t notice the immediate impact on gas prices.
“I don't think anybody is going to sit there on January 1 and say, ‘you know, the price just went up a bunch. It must be those new carbon regulations Ecology put in place,’” Creswell said. “And I really don't think it's going to be noticeable.”
But some say the carbon offset fees companies will start paying will be passed down to consumers.
Todd Myers, Environmental Director at Washington Policy Center, is one of those people. He posted an analysis with the headline, 'State’s new tax on CO2 emissions projected to add 46 cents per gallon to the cost of gas.' So, our Verify team asked him how he came to that figure.
“So, the way the system works is that for every metric ton of CO2, gas sellers have to buy a permit,” Myers said. “Department of Ecology estimates that that permit will cost $58 For every metric ton. That translates into 46 cents a gallon. So yeah, there's a bit of math behind it. But again, these are the Department of Ecology’s estimates on how much it will cost to buy permits to emit CO2.”
However, the Department of Ecology, which is tasked with implementing Washington’s new policy, argues that Meyers’ analysis is overly simplistic and doesn’t account for other market variables.
“The trouble with how Mr. Meyers approached these calculations, and his piece, is that you know, he did do some math, it's just not math that’s reflective of reality,” Creswell said. “Because in the real world, we know that there are a lot of different market players.”
Washington’s program is similar to carbon offset programs already in place in other places, like California.
“I'm highly confident it's not going to be 46 cents per gallon, that would be very different from what we've seen in the other states that have implemented these policies,” Creswell added.
For insight, we turned to Colin Murphy, the Deputy Director of the UC Davis Policy Institute for Energy, Environment and the Economy.
He says in the first 5 or 6 years of California’s program, drivers did not see gas price increases related to carbon offset fees that were any larger than a cent per gallon.
“I think there's no chance to 46 cents in the first year,” Murphy said. “There's no chance 46 cents in the fifth year. 10th year, highly, highly unlikely you'll get the 46 cents, but impossible to completely rule out.”
We will see what impact the program has when it takes effect in January of next year.
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