Schmick says state should reimburse farmers for its cap-and-trade failure

‘The state made a promise. They failed. They should be on the hook for that failure, not the farmers,’ says Schmick

When Gov. Jay Inslee’s cap-and-trade proposal passed the Legislature in 2021, he and many of the Democrat lawmakers who endorsed his plan assured the agriculture community that fuels used in the production and transport of agriculture products would be exempt.

Even though no state Republican legislators voted for the bill, some are now saying it’s worse than anyone thought and the state should be on the hook for breaking its promise to farmers.

“Emissions from fuels used for agricultural purposes are supposed to be exempt from Inslee’s cap-and-trade program,” said Rep. Joe Schmick, R-Colfax. “The law clearly states this. It’s what we expected when the program went into effect on January 1 of this year. But now we’re hearing that some fuel suppliers have applied the climate commitment act surcharge onto fuels that should be exempt. This adds another unnecessary financial burden to our farmers and agriculture community, many of whom are struggling to stay in business. This will devastate them.

“In addition, this extra cost will be continue to make food more expensive at a time when folks are really feeling the financial pinch of inflation,” Schmick continued. “Groceries are already taking a larger portion of the family budget. If we don’t fix this issue, I believe it will trickle down to consumers who will end up paying more.”

The Department of Ecology (DOE) was tasked to make the exemption for the agriculture community part of the rules of the cap-and-trade program. Schmick says they have failed.

“The state made a promise. They failed. They should be on the hook for that failure, not the farmers and those working in the agriculture community,” said Schmick. “If they can’t devise a program, like they were tasked to do, then I think they should pay the farmers back.”

Schmick is proposing legislation that would require the state to reimburse members of the agriculture industry who are exempt from the cap-and-trade fuel surcharge. The title for his proposal, House Bill 1780, is “An Act Relating to addressing unintended consequences of the climate commitment act.”

Under provisions of the bill, DOE must create a remittance program for those whose fuel use is exempt from the cap-and-trade program, including fuel used for agricultural purposes and certain marine and aviation fuels. Qualified recipients would receive reimbursement at least on a monthly basis.

Schmick says the governor’s office and the Department of Ecology need to prioritize solving the problem and not ask farmers to float the costs of the administration’s mistakes. He says if they can’t follow this part of the law as it was written, he wonders what else might go wrong with the cap-and-trade program.

“The cap-and-trade program is going to have consequences. It is a complicated system. Are there other components that are not going to go as planned?” asked Schmick. “And if so, are we only going to find out about them when the impacts hit us all square in the pocketbook?”

Schmick’s proposal has been referred to the House Environment and Energy Committee.

The 105-day 2023 legislative session began on Jan. 9.

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Washington State House Republican Communications
houserepublicans.wa.gov