Southwest Washington Rep. Richard DeBolt wants to make it easier for companies to transition to clean energy and combat climate change.
DeBolt, a Chehalis Republican, has introduced legislation that would give tax breaks to companies that reduce or offset greenhouse gas emissions. The legislation passed unanimously out of the House Committee on the Environment and Energy on Feb. 5, and it has some bipartisan support.
The bill would:
* Provide tax breaks or credits for utilities and certain industries that invest in carbon reduction or renewable energy generation facilities.
* Provide tax breaks or credits for companies that provide forest fire reduction services.
During his re-election campaign for the 20th District last year, DeBolt often touted his bill as encouraging carbon reduction with a “carrot instead of a stick.”
“If you’re just taxing people for their emissions, then people are just paying to pollute. That doesn’t help anybody,” DeBolt said Thursday. “If you incentivize people to take carbon out of the atmosphere and make it cost effective to do so, then people will do the right thing.”
The proposed law is intended to reduce the cost of transitioning to low- or zero-carbon emission electrical power.
To do that, certain industries that face foreign trade competition would qualify for tax exemptions if they take steps to reduce emissions. These industries include, among others, inorganic chemical, nitrogenous fertilizer, flat glass, glass container and gypsum manufacturing, and pulp, paper, newsprint and paperboard mills — industries that are all represented locally.
In addition, those that invest in the reduction of the greenhouse gas emissions related to transportation of gas through a pipeline would also qualify for tax exemptions.
The total statewide amount of tax credits would not exceed $50 million and would expire in 2029.
DeBolt’s approach differs sharply from the approach Gov. Jay Inslee has proposed to combat climate change — taxing emissions such as carbon dioxide.
“Gov. Inslee appreciates that legislators are proposing a variety of solutions to address carbon emissions in Washington,” a spokesperson for the governor said Friday. “In order to meet our carbon reduction goals, we can’t rely solely on the electricity sector. Gov. Inslee is supporting a package of legislative proposals targeting the three highest emitting sectors in the state: transportation, buildings, and the electricity sector, plus super-polluting (hydrofluorocarbons).
“Together, these initiatives are expected to achieve our 2035 statutory emissions reductions targets. The science tells us we need to do more, and Gov. Inslee is also urging legislators to strengthen the statutory goals to align with our commitment to meeting the goals of the Paris Accord.”
Under DeBolt’s proposal, utilities such as the Cowlitz PUD that buy most of their power from the Bonneville Power Administration would not be obligated to meet the 2029 renewable power mandate.
“We cannot control, due to interstate commerce rules, what kind of (power) purchases Bonneville makes,” DeBolt said. “And small PUDs rely on Bonneville to keep rates low. We did not want to cause a rate impact.”
The tax cuts would be limited to $133 million over 10 years, DeBolt said. About $83 million of that would be for forest fire management investment, such as forest thinning. DeBolt said the state already spends about $80 million a biennium on forest fire damage.
“We’re working on something to calculate forest fire yield and what things we can do to better reduce fire,” he said.
Under his proposed legislation, a large carbon emitter such as an aluminum plant or oil refinery could get tax breaks for providing fire reduction services on state land, he said. Therefore, the company gets a tax break and the state saves money on fire reduction.
“We have very strict rules on what’s a conflict and what’s not, and we follow them to the letter,” he said.
The bill has now been referred to the House Committee on Finance, which held a public hearing on the legislation on Thursday.
DeBolt said he has been working on the legislation for about two years. Some environmentalist groups, including Seattle-based Climate Solutions, have helped him draft the bill, he said.
Kimberly Larson, Climate Solutions spokeswoman, said the organization is working with DeBolt to improve the bill.
“We appreciate the intent of his proposal, which at the core is the now common (and bi-partisan) understanding that we must end further investment in fossil fuel generation for electricity,” Larson said. “Washington is ready (and needs) to go further faster, by (setting) a path to 100 percent clean electricity by 2045.”
But others, like Sierra Club, have opposed the legislation, DeBolt said. Representatives of the Sierra Club did not return requests for comment Thursday and Friday.
DeBolt said there seems to be bipartisan support for the plan, but as a member of the minority party, DeBolt said his bill has a “harder climb than others.”
“We can do this. It doesn’t hurt anything to do this. It’s just an opportunity to reduce carbon.”