Given the flaws of the ballot initiative in its current form, we cannot endorse 1-1631. But we have decided against dedicating funds to defeat the initiative.
Can an oil and gas company favor a price on carbon emissions while not endorsing every attempt to achieve one? Yes — but Initiative 1631 has some serious flaws.
It may seem counterintuitive for an oil and gas company to favor a scheme that would potentially make doing business more expensive. But Shell’s longstanding support for a government-led carbon price is based on our belief that a well-crafted policy would benefit all of us — society and industry.
In fact, we’re counting on it.
In 2014, we endorsed the World Bank’s statement on carbon pricing. In 2009, we supported efforts at the federal level for cap-and-trade legislation and, this past July, relayed to Congress Shell’s support for an economywide, market-based approach to valuing carbon. Shell dedicated significant resources in support of the California emissions trading scheme, and we continue to work alongside nongovernmental organizations, and others, to pass meaningful carbon pricing legislation through the Washington state Legislature.
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But a price on carbon must be enforced on a level playing field — something Washingtonians achieved when the state banned smoking in public places in 2005. That law didn’t exempt certain brands of cigarettes and not others — that’s nonsensical and would not achieve the desired outcome. I-1631 was crafted with such pitfalls. It addresses carbon emissions from oil and gas companies but not other emitters, including a regional coal-fired power plant, which would be exempt from new pollution controls for the rest of its operational life (through 2025.) This kind of inequity smacks of political gamesmanship and severely limits the stated benefits a price on carbon is intended to deliver. Among them: cleaner sources of energy, an accelerated transition to a new-energy economy, greater industrial efficiency and more effort from consumers to curb energy use.
It’s logical to wonder whether Washington business owners will carry more financial burden if carbon products from nearby states are purchased and “imported” in place of more expensive (carbon-taxed) local goods. A well-thought-out carbon tax could address this disparity by taxing out-of-state products in a similar fashion to those that carry an embedded carbon tax, locally. This would ensure the level playing field needed by businesses in Washington to continue to make investments and protect jobs.
As for consumers, there are crucial factors at play. There’s no avoiding that some purchases — fuel, chief among them — would carry an extra burden, especially for local commuters, fishermen and airlines. But in turn, this would encourage consumers to become more efficient in their use of fuel and other carbon-based products. We believe these points need to be transparent to voters: they are among the trade-offs and desired outcomes society needs to evaluate as it tackles these challenging, economywide issues.
While Shell supports a price on carbon, the company is not obligated or inclined to endorse every proposal that claims to achieve this. Given the flaws of the ballot initiative in its current form, we cannot endorse 1-1631. But we have decided against dedicating funds to defeat the initiative.
In November, voters in Washington state will decide the path forward. If the initiative succeeds, we will of course comply with the new law. If it fails and there remains an opportunity for new legislation that puts a price on carbon in an equitable and thoughtful way, we stand ready to engage and help achieve that goal. To that end, this still will have been a vote for progress on the most important issue of our time.