After months of study and discussion, the Republicans and Democrats on the Climate Legislative Executive Workgroup (CLEW) released competing draft proposals designed to cut Washington's carbon emissions.

The two approaches are pretty different but both claim to meet a standard of environmental effectiveness. For example, the proposal from Governor Inslee, Senator Ranker and Representative Fitzgibbon claims:

Based on the information reviewed by the Workgroup, we believe these policies are the most cost effective tools we have available to meet our state emission limits. As we move forward, it will be important to design our actions in a way that maximizes the benefits and minimizes the costs of implementation, by directly considering our emissions and energy sources, and our businesses and jobs.

Do either of the proposals actually meet that goal? The short answer is "no." Virtually all of the policies offered by each side are pretty expensive with some important exceptions.

Overall the Republican proposal chooses less-expensive approaches, but the total CO2 reduction is lower than the Democratic proposal. The proposal from the Demcrats, however, is much more expensive and chooses some policies that will do literally nothing (literally) to reduce carbon emisions while increasing the cost of electricity.

To assess the environmental effectiveness we have calculated the cost to reduce one ton of carbon. Since money doesn't grow on trees, we want to make sure we are receiving the greatest environmental benefit for every dollar we spend.

It should be kept in mind that cost numbers can be compared to a number of alternatives:

• $11.34: The current cost of a ton of carbon under California's cap-and-trade system.
• $21.20: The "optimal" cost using Yale economist William Nordhaus's climate modeling. Nordhaus has been doing climate modeling longer than any other economist and is the man Paul Krugman calls his "mentor."
• $30: British Columbia's carbon tax.

Whichever number you choose, all of the policies below are significantly higher. My complete spreadsheet analyzing the strategies is available upon request. E-mail me at tmyers@washingtonpolicy.org.

Here's our assessment of the Democrats' policies. Tomorrow we will analyze the Republican approaches.

Democrats

The Governor and the Democratic legislators have offered eight approaches to reducing carbon emissions. The proposal is fairly vague, so we have used a range of sources to estimate costs, including the CLEW's own analysis (which is quite poor as we've noted) and Washington state experience.

Cap-and-Trade

The CLEW's report lists the cost of cap-and-trade as "not quantified." Without a number, there is no way to measure the cost effectivness of the policy. Since this is the centerpiece of the Democrats' proposal, it would be extremely risky to move forward without some kind of estimate.

One key element of cap-and-trade which will drive its cost up is that the cap is inflexible. Washington's carbon emissions, however, vary significantly year to year. For example, in 2006, Washington emitted 211 lbs of CO2 per megawatt hour (MWh). Just a year earlier, however, in 2005, there was a low snowpack and hydro power had to be replaced with fossil fuels and the amount was 322 lbs of CO2 per MWh ? 52 percent higher.

Imagine the impact of an inflexible cap when emissions can rise or fall 50 percent in just a year. This will cause huge price swings leading to the loss of industry like we saw in 2001 when aluminum companies shut their doors after a huge jump in electricity price.

Cost to Reduce One Ton of CO2: "Not quantified" with significant risk.

Coal-by-Wire

The goal here is to prevent Washington utilities from buying coal-generated electricity from out of state. This is an entirely symbolic gesture and, while it will increase electricity costs to Washington residents and businesses, will not reduce carbon emissions. Seattle City Light did the same thing by ending its contracts with coal generators in their effort to claim they are carbon neutral. Those coal plants, however, did not shut down. The electricity was still generated and the environmental impact was the same.

This is politically popular with some but simply cannot be called effective.

Cost to Reduce One Ton of CO2: Infinite

Finance Clean Energy

The proposal offered by Democrats is a "feed-in tariff" which simply subsidizes the high cost of renewable energy. The CLEW report offers a wide range from $30 per ton of CO2 up to $500 per ton. Their report, however, uses national numbers which is misleading since elsewhere wind energy, for example, would be replacing coal whereas in Washington it is likely to replace hydro or natural gas.

Using numbers from the Energy Information Administration, a subsidy of five cents per kilowatt hour (kWh) yields a cost of about $370 to reduce a ton of carbon. A subsidy of 15 cents, as is currently offered to purchase solar panels in Washington, would skyrocket to $1,110 per ton. Washington also subsidizes the purchase of locally built solar panels at the astronomical rate of 54 cents per kWh, which amounts to nearly $4,000 per ton of carbon reduced.

The simple reality is that while reducing carbon from elecricity seems easy, Washington's energy is so decarbonized already, it is an extremely ineffective way to reduce emissions.

Cost to Reduce One Ton of CO2: $370 - $4,000

Green Building Standards

Despite the abysmal record of these standards, they seem to be the go-to suggestion anytime there is a discussion of cutting emissions. Numerous studies, including one by the legislature's own audting agency, the Joint Legislative Audit Review Committee (JLARC), finds the standards do not live up to their promise.

As JLARC found, half of the "green" schools in Washington state perform worse than the average school in the district. These schools are spending mroe to get a less efficient building.

Assuming that schools are, in fact, six percent more efficient on average as JLARC found, the total cost per ton of CO2 reduced is about $1,800. Again, the price is high because reducing electricity use is expensive and yields tiny reductions in CO2.

Cost to Reduce One Ton of CO2: $1,800

Incentivize Clean Cars

Washington state already does a tremendous amount to promote clean cars. Buyers of electric vehicles don't have to pay sales tax. Washington state pays to build car charging stations. It is difficult to know what is being suggested since the letter makes only a passing references to "incentives for the purchase of clean cars."

Assuming they mean the extension of the current policy of waiving sales taxes, this is a costly and ineffective approach. First, you have to assume that people who can afford an $80,000 Tesla would refuse to buy it if they had to pay sales tax. This is pretty unlikely since those who can afford such an expensive car are probabaly not price sensitive.

Assuming, however, that one-third of potential buyers would not buy the car without the incentive (this was the experience with Cash for Clunkers), the cost is still very high. The sales tax exemption costs about $190 per ton of carbon.

There is the additional issue of taxing working families to subsidize the purchase of luxury cars for the rich. Even the average buyer of a Nissan Leaf has an income over $100,000 a year. Subsidizing elecrtic cars is an expensive way to tax workers and send those dollars to the rich.

Cost to Reduce One Ton of CO2: $190

Low-Carbon Fuel Standard

Washington has been studying the LCFS for years. The last time the Department of Ecology discussed the issue in a legislative work session, it could only say that calculating how an LCFS would work was "complicated." The biggest winners from this policy are biofuel companies like Imperium Renewables, who have lobbied heavily for this policy.

Essentially, an LCFS would require mixing biofuel with regular fuel in addition to other considerations. The CLEW report puts the price of this policy at $103-$131 per ton of CO2. A more comprehensive study of the cost of the LCFS lists the cost at nearly $190 per ton.

Of course this assumes that biofuels meet the expected level of efficiency. It is now clear that support for ethanol actually increased carbon emissions. This is why the Department of Ecology has been so slow to offer a plan for an LCFS. Companies who stand to benefit from an LCFS are less worred about the details, but those who actually care about reducing carbon emissions should be wary of a policy that has a high cost but speculative benefits.

Cost to Reduce One Ton of CO2: $103-190

Land Use Planning

A few years back, I attended a speech on the value of land use planning in fighting climate change. The speakers claimed central community planning was the best thing we could do to cut carbon emissions. When I asked if they had an estimate of the cost of these policies they said they hadn't considered that.

This is the same experience we've had in Washington state. For some time, we've asked for an analysis of Washington's growth management law to see if it is achieving the promised goals. No such research has been done.

The CLEW study lists the price of central planning as negative, meaning it saves money. The source is the Oregon Department of Ecology whose study assumes most of the costs are picked up by the Federal Government and assumes that increased density and transit reduces carbon emissions. Put simply, they assume the results. Given Sound Transit's abysmal record of predicting ridership, assuming something as complex as land use planning works as predicted is folly. Even the advocates of such policies admit they don't know the cost.

Cost to Reduce One Ton of CO2: Unknown

Research

This is completely uncertain and isn't really a carbon-reduction strategy. Generally we support funding for basic research, so this makes sense within reasonable budget limits. Expecting this kind of research to produce near-term breakthroughs, however, is not appropriate. Given that enormous uncertainty and the fact that this isn't really a carbon-reduction strategy, it is impossible to assign a cost.

Cost to Reduce One Ton of CO2: Unknown