Former state economist alleges pressure to lie about carbon auction effect on gas prices

(The Center Square) – Opponents of Washington’s carbon credit auction have pounced on a former state economist’s retaliation claim against the state after his refusal to keep quiet about his calculations showing Washington’s cap-and-trade program would increase gas prices by 45 to 50 cents per gallon.

KING 5 first reported on a legal claim filed Thursday by the Citizen Action Defense Fund on behalf of Tumwater’s Scott Smith, 64, who worked for the state Department of Transportation as an economist. The complaint argues Smith was threatened to keep his prediction of gas price hikes from the public and told not to put anything in writing that could be subject to a public records request.

The legal claim was filed against the WSDOT, the Office of Financial Management and the Gov. Jay Inslee’s administration.

Smith, who had worked as a public sector economist for 35 years, contends he was forced out and that his career has been ruined because he refused to lie about how Washington’s carbon auction program would impact gas prices.

Gov. Jay Inslee had previously predicted the increase at the pump for consumers would be only “pennies.”

The pressure to change his findings or lie about the data became so great, according to Smith, that he felt he had no choice but to resign.

In the legal claim in the form of a demand letter to WSDOT Secretary Roger Millar, CADF Executive Director and counsel Jackson Maynard details some of Smith’s allegations.

“On January 18, 2023, at around 10:10 a.m., my client met with Mr. Nguyen Dang (a temporary supervisor) who informed him that management ‘would prefer’ that he not include the cap-and-trade surcharges in his quarterly fuel price forecast,” the letter states. “By ‘management,’ my client understood that Mr. Nguyen was referring to Ms. Amber Coulson, WSDOT’s Financial and Planning Manager, and Mr. Eric Hansen of the Governor’s Office of Financial Management.”

Senate Republican Leader John Braun keyed in on the governor in his response to Smith’s claims.

“It’s very disturbing to hear that executive agencies under the governor’s oversight are pushing staff to misrepresent facts and figures,” Braun said in a news release. “This is especially upsetting if it was done to hide the full impact of the governor’s ‘Climate Commitment Act’ and manipulate the people of Washington into accepting the spike in gas prices without knowing the true cause. The projections by the state employee who is at the center of this lawsuit have been proven to be correct – not because oil companies or gas station owners got greedy, but because the state of Washington did.”

Washington currently has the third-highest gas prices in the nation, according to AAA, behind only California and Hawaii.

Rep. Andrew Barkis, R-Olympia, was similarly critical.

“Any suggestion that Washingtonians may have been misled about the financial impacts of the cap-and-trade program demands our immediate attention,” he said in a news release. “As the ranking [minority] member on the House Transportation Committee, I am committed to ensuring our transportation policies are based on sound data and that the public is given the truth about the consequences of legislative decisions.”

Todd Myers, environmental policy director at the free market Washington Policy Center think tank, made predictions similar to Smith’s even before the state’s cap-and-trade program went into effect at the beginning of the year.

“If what is reported is accurate, the Inslee administration went to significant lengths to hide the evidence that their claims the new tax on CO2 would have a small impact on gas prices were badly wrong,” Myers said. “They knew the claim was dishonest and appear to have threatened state employees to hide the truth.”

Inslee spokesperson Mike Faulk said the governor’s office had no prior knowledge of the claims or Smith’s prediction.

“Our office had no familiarity with this individual, his analysis or his claims prior to Thursday’s press release,” Faulk emailed The Center Square. “The only information we have at this point is a press release from an organization that now has multiple lawsuits aimed at upending the state’s recent climate policies. There will be investigations to determine if this individual’s assertions can be substantiated.”

He made mention of media covering the complaint, noting, “We will wait to draw any conclusions until we have that information. We absolutely expect reporters would do the same.”

Faulk concluded, “We rely on and expect our agencies to provide thorough, credible analysis based on the best data available. Ecology is the lead agency on CCA, not WSDOT. Our office has always worked with Ecology on understanding price impacts.”

Under the Climate Commitment Act of 2021, emitters are required to obtain “emissions allowances” equal to their covered greenhouse gas emissions at quarterly auctions hosted by the Department of Ecology. Three quarterly carbon auctions and two Allowance Price Containment Reserve auctions held this year have brought in some $1.6 billion so far. The next quarterly auction is set for Dec. 6.