Jay Inslee has a radical plan to phase out fossil fuel production in the US
By David Roberts firstname.lastname@example.org Jun 24, 2019
Jay Inslee’s presidential campaign has been releasing its climate policy — the central rationale for its existence — in pieces. Extremely large, detailed, and nuanced pieces.
I covered the first piece, on getting to 100 percent clean energy in electricity, new cars, and new buildings, here. I covered the second, a 10-year, $9 trillion investment plan, here. The third was about how climate change would reshape foreign policy under Inslee. You can read it here.
On Monday, the fourth piece, “Freedom From Fossil Fuels,” is out. It is in many ways the most radical piece yet, and likely to be the most controversial. It is about cutting off the flow of fossil fuels from the US — “keeping it in the ground,” as the kids say.
As with the previous pieces, Inslee is not screwing around. This is a serious and deeply informed plan to phase out the burgeoning US fossil fuel industry, alongside a plan to protect the workers and communities who depend on it. As I said when I covered part two, Inslee is building a credible, policy-literate Green New Deal, piece by piece — a blueprint the next president, whoever it is, can use to hit the ground running.
There are several big items of note in the latest plan, including a proposal to put a price on carbon. Fracking? He wants to work toward a national prohibition. He wants to get rid of fossil fuel subsidies, reinstate dozens of environmental rules that President Trump reversed, step up enforcement on polluters, reject all new climate-unsafe infrastructure, and boost corporate climate accountability.
And that just scratches the surface. This is a capacious plan, requiring both executive powers and legislation. The net result would be a conscious, deliberate phasing out of US fossil fuel production.
For years this kind of supply-side policy has hovered at the edge of climate discussions. Inslee is thrusting it to the center.
Let’s walk through the five big steps of the plan.
Step 1: end all fossil fuel subsidies
The persistence of fossil fuel subsidies is an embarrassment to the species. Virtually everyone (except the subsidized industries) recognizes their folly by now, but inertia and political influence peddling have kept them stumbling on like zombies.
Among the G7 countries, the US is the worst offender, with $26 billion in direct annual government financial support to fossil fuel industries (and that was calculated before Trump’s tax cuts, which dropped another $25 billion in their laps).
Inslee wants to claw back all those subsidies. That includes reversing a variety of federal tax loopholes, raising royalty rates for fossil fuels on federal lands, and “ending institutional federal support for fossil fuels,” a broad category that mentions, among other things, “directing the Secretaries of Defense, Energy and the Treasury to evaluate and report on the current and historical costs of protecting oil supplies around the globe.”
(It also includes one of my favorite little side bits: “transforming the Department of Energy (DOE) Office of Fossil Energy into the Office of Industrial Decarbonization.”)
Step 2: end federal leasing and phase out fossil fuel production
Trump has done everything he can to accelerate the exploitation of fossil fuels on federal lands and waters. Inslee would do everything he can to end it.
So the first piece here is phasing out fossil fuel production on public land. Among other things, that would include a day-one executive order banning “all new fossil fuel leasing on federal lands and offshore waters, including coal, oil, gas, oil shale and tar sands.” Then Inslee would instruct the relevant federal agencies to “utilize all existing authorities to cancel and refuse to extend existing fossil fuel leases.” Then he would work with Congress on a permanent ban (oh, and reverse Trump’s shrinking of federal monuments).
That would be, to say the least, a big deal.
The second piece is phasing out fossil fuel production more broadly. Inslee would establish a “Presidential Commission on Energy Transition” (including the secretaries of several federal agencies) that will be “tasked with identifying and setting in motion the implementation of federal policies to phase out domestic fossil fuel production.” The commission will have a special focus on a “just transition” for fossil fuel workers and communities.
This piece also involves this list of possible policies, which is so on point I just have to reproduce it:
[M]andatory set-backs from private property and targeted locations (e.g. schools, hospitals, public parks, etc); outright bans on the most-destructive practices like mountaintop-removal coal mining; the buying out and decommissioning of fossil fuel assets; working with states to restrict fossil fuel corporations’ use of eminent domain as they seek to build new infrastructure across private property; and strengthening consideration of the social climate costs associated with fossil fuel production across federal permitting agencies.
Any of those would be a big deal! (And this is one part of one part of one part of Inslee policies, yeesh.)
The third piece is the just transition. There are tons of elements to this, among them shoring up the retirement, pension, and health care benefits of retired and retiring fossil fuel workers, providing “income support and educational stipends” to fossil fuel workers, creating a “Re-Power Fund” to invest in transitioning communities, creating a “Restoration Fund” to train workers and put them to work in ecological restoration, strengthening labor and bargaining laws, and conditioning all federal clean energy investments on high labor standards.
And the fourth piece? “Ending fracking.” Period. That will mean working with Congress on a national ban while taking other executive and legislative steps in the meantime to tighten health, environmental, and safety regulations.
Step 3: hold polluters accountable
And here is the long-awaited price on carbon.
Inslee proposes a “climate pollution fee” — none shall call it a tax! — to be levied as far upstream as possible, “applied initially in key economic sectors in which it can have the most effective impact.” (I’m not sure what that means exactly, but experts generally agree a carbon fee would have the most initial impact in the electricity sector.) The fee would cover carbon dioxide and also other greenhouse gas “super-pollutants” like methane.
Interestingly, Inslee does not specify an initial level or a rate of increase, saying only that the fee would start low and rise aggressively.
As for the revenue, it would “provide dedicated support for frontline and low-income communities in addressing the impacts of climate disasters” and fund “environmental quality protections and economic development.”
Lots of economists prefer a “revenue neutral” carbon tax, in which the revenue is automatically returned via dividends or tax cuts. I’m glad Inslee hasn’t adopted that idea. He frames the carbon fee just as it ought to be framed: as a way of funding some of the good things he wants to do. Not the center of the plan, or even the center of this part of the plan. Just another provision.
The political hurdles facing a carbon tax — and how to overcome them
To protect “energy intensive and trade exposed” (EITE) industries, Inslee proposes a “carbon duty,” effectively a carbon border tax on imported goods. (Some scholars doubt whether such a thing would be legal or workable under international trade rules.)
Also on the theme of holding polluters accountable, Inslee proposes strengthening and better enforcing a wide range of environmental rules and regulations. Fellow Clean Air Act obsessives will want to dig into this section — Inslee effectively wants to use all the CAA powers that have been proposed to address carbon, including Section 111, NAAQs, and Section 115. I suspect the Trumpified Supreme Court would have something to say about that.
Step 4: reject all new fossil fuel infrastructure
There are four pieces to step four. (I know. Bear with me.)
The first is a new “climate test” that would govern all federal investments, to ensure that they do not work against Inslee’s broader climate goals. There are lots of details about the different agencies that would apply it, but the result would be the rejection of new fossil fuel infrastructure and the revoking of many existing permits — Inslee specifically mentions the Dakota Access and Keystone XL pipelines.
The second is to restore and respect the ability of local and tribal communities to control their own land and make their own infrastructure decisions. It’s worth calling out this bit: “the depredations upon tribal land, water, and people by proponents of oil pipelines — like the Dakota Access Pipeline — demand a new direction in federal policy that recognizes the heritage and the human rights of indigenous communities.” Indeed!
Inslee would reverse Trump’s efforts to preempt states and local communities and also work to overturn the Federal Energy Regulatory Commission’s ability to force states to accept natural gas pipelines.
The third is stopping fossil fuel exports by restoring the crude oil export ban, working to make it permanent, and working to place similar restrictions on the export of other fossil fuels like coal and liquefied natural gas.
And fourth is using the federal government’s powers to accelerate the shift away from oil, including through procurement (the government is an enormous consumer) and other such fun stuff as requiring all federal rest stops to have high-voltage vehicle-charging stations. (Also: “a new requirement that every commercial fueling station must also provide electric vehicle charging services.”)
Step 5: improve corporate climate transparency
As climate change intensifies, corporations face risks both from extreme weather events and from the climate policies that might be passed to address them. With a few exceptions, most big, carbon-intensive companies are not transparent about those risks, making it difficult for shareholders to make informed decisions and investors to rationally allocate capital.
Inslee proposes a wide variety of ways for the federal government to increase oversight over climate pollution and risk, everything from new Securities and Exchange Commission commissioners, rules, and standards to new bank lending transparency requirements. These get pretty far into the weeds — “reforming reserve-based lending and debt-restructuring rules,” anyone? — but they have the potential to have some of the most significant long-term effects.
Here Inslee specifically raises the possibility of a “climate change-driven financial crisis” and offers a long list of acronym-laden suggestions to help avoid it (the FSOC, CFTC, and NGFS all play their role).
Step 6: make this plan into the official Democratic platform
So there you have it: part four (of five? six?) of Jay Inslee’s climate plan, which, like parts one through three before it, alone contains more detail and ambition than the entire climate platforms of the other Democratic candidates combined.
Specifically, in this part, Inslee is taking the “keep it in the ground” passions of the climate movement and channeling them into a comprehensive policy plan. This goes beyond run-and-gun fights against every new proposed pipeline; it’s about systematically phasing out fossil fuel production on the schedule set out by the Intergovernmental Panel on Climate Change.
It’s simply not coherent to accept the IPCC deadline — global decarbonization by midcentury — and argue that the US should go on being the world’s biggest producer of oil and gas. We are producing enough new carbon to cancel all the good we’re doing with demand-side policy. Just because that carbon might not be burned in the US doesn’t mean the US won’t suffer from the effects.
Getting serious about climate change means getting serious about phasing out fossil fuel production. Here, once again, Inslee is taking the lead in showing how it can be done.