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Xconomy Q&A: WA Gov. Inslee on Education, Life Sciences, Climate, R&D

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JI: I believe that, first off, we’re going to need very significant investments, obviously, in education, and if we’re going to maintain support for our school children, to make sure we don’t have more homeless kids and more hungry kids and more sick kids, we’re going to have to make a substantial investment, which is going to require revenue. If we do that, than I think there is a place for targeted R&D, for the Life Sciences Discovery Fund, and you know, perhaps, other alternatives.

But again, I can’t make any clear statements about that because our whole budget is dependent on a thousand moving pieces and those are all under development.

I think people know that I think investment in R&D is critical to our future and is one of the best investments we can make, so we’re going to look at that. But again, it has to be in a context of being able to raise revenue—total, from the total package—to go into schools, because that’s a necessity. We’re under court order to do that. It’s a judicial requirement. And more importantly, it’s a requirement for our grandkids and our kids.

X: Given those constraints and needs, are there some fundamental changes in the state’s tax structure that you think need to be considered at this point?

JI: We’re considering a number of options to provide for our school children. That’s all I can tell you at the moment. We haven’t landed on any suggestions, except we have identified previously some loopholes that really are not economically productive, and just are not as important on the priority scale as our school children’s educations. STEM education, drop-out prevention, and early childhood education have to take priority over some of those loopholes, many of which are old and really are not producing economic growth.

X: Turning to the issue of climate change, I wonder if you see any chance of passing carbon regulation in Washington state if Republicans were to take control of the state House or keep the state Senate in the coming election?

JI: Yeah, I’m going to remain optimistic and diligent, because of a couple reasons: One, we’re now seeing the impacts with our own eyes, and that’s why people are, I believe, increasingly calling for people to stop denying the problem and start working in a bipartisan fashion toward a solution to the problem. So that’s happening. Second, there’s an opportunity.

There’s multiple challenges on the legislature, but one of which is to generate funds for transportation projects, for water projects, for schools. There’s multiple financial challenges, and you can address carbon pollution and the health effects of carbon pollution at the same time you’re raising dollars. We have a way, with a carbon pollution cap, that could in a non-injurious way produce hundreds of millions of dollars of revenue that could be used for investments in a variety of ways, that the legislature could decide.

I think that if we’re going to have to raise some revenues, it might make sense to have, you know, secondary benefits including improving the health of our children. If you have to raise revenues, why not do it in a way that’s going to make your air healthier and reduce the threats of asthma and ocean acidification, and there is a way to do that. So I think legislators—over time, as they start to come to terms with how large the fiscal challenge is—may open their minds to, you know, solving two problems with one solution.

So yes, I think that could be an eventual result. It would be a lot easier if we have more people elected to the Senate who will face up to the science and want to work in a solution-oriented way. That’s almost exclusively Democrats at the moment, but reality has a way of focusing the mind. And the reality is, legislators of either party, both parties, are going to have to face a really giant fiscal challenge, and they’re going to have to look for solutions, some of which will involve revenue. So why not take care of the health of our children at the same time? A carbon pollution system, a cap-and-trade system does exactly that.

X: Have you settled your mind yet on whether the more appropriate regulation method is a tax versus a cap-and-trade system for Washington state?

JI: I think there are clear advantages of a cap-and-trade system, one of which, it actually works. It limits carbon pollution. It has a legally enforceable restriction against pollution, which is our principal goal in this thing. So I think it has been proven to be more effective in actually limiting carbon pollution. It also uses the market rather than government dictating to the economy. It uses the market to decide where these investments should be made.

But we have a task force working on this, looking at this. They have not reported to me, so I’m not going to draw any total conclusions until we hear from them.

By the way, the advantage of a cap-and-trade system is we are seeing it work. It’s in operation in eight Northeast states. It’s in operation in England. And it has been very successful in both of its goals, which is to reduce carbon pollution, and, secondly, not hinder economic growth.

So, I think we have working models; we don’t have to be the first. We don’t have to invent the rocket to the moon. It’s already there. We just have to make sure it fits Washington state.

X: But does the cap-and-trade system solve the same sort of budgetary problems that a tax would?

JI: Yes. It can, yes, because if you want to set the cap at a level that decreases carbon pollution and has price impacts that are not astronomical, and not damaging to your economy, and that’s been done successfully in some of these other states and countries. And we are doing very sophisticated modeling of the economic impacts of them.

And, yes, a properly constructed program can raise hundreds of millions of dollars for the education of our children, for investment in water systems, irrigation and flood-control projects, transportation projects. That issue is something legislators—all of those—will be faced with. And I’m not going to dictate those, obviously, because we’re in a Democracy.

X: Do you think this election, either here in Washington or nationally, has the potential to send a meaningful message on climate?

JI: Oh, every election is, but there’s many, many issues. I think that’s less—I think the gubernatorial election sent a message on climate because you had one candidate two years ago who is optimistic about our state’s ability to develop a clean energy economy, one that was not. I think one can say that sent some message, because it was one of the first times in a gubernatorial race it actually had been made an issue by at least one of the candidates. So I think that was a message.

In the legislative races, it’s a little harder to say that because there are so many local issues. Different candidates have different personalities. It’s a little more difficult to say you can draw broad conclusions from legislative races.

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