Environmentalists are against I-732, Washington’s carbon tax.

It’s Nonsensical That Environmentalists Are Against the Country’s Possible First Carbon Tax

It’s Nonsensical That Environmentalists Are Against the Country’s Possible First Carbon Tax

The state of the universe.
Oct. 20 2016 11:03 AM

Environmentalists’ Disdain for Washington’s Carbon Tax

The first such law in the nation is being hampered by idealists. Instead, they should band together and make history.

Industrial smokestacks.
Putting a price on emissions is always fraught, but it shouldn’t be this bad.

iStock/Thinkstock

For those concerned about climate change, all eyes are on the deep blue and Evergreen State of Washington, where a carbon tax is on the ballot. State Ballot Initiative 732, a revenue-neutral carbon tax, is a step forward for climate policy. The U.S. must lead on climate change, and without a functional Congress, leadership must come from somewhere else.

A forward-thinking state seems the ideal solution, and Washington would appear to be that state: Its Democratic governor, Jay Inslee, is a former Congressman with a 92 percent lifetime score from the League of Conservation Voters. Sen. Bernie Sanders—who has actually called for a carbon tax—trounced Hillary Clinton by 45 points in Washington’s March delegate caucus. Its neighbor, Canadian province British Columbia, already has a carbon tax.

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But the perils of politics know no bounds. Initiative 732 is the product of a grass-roots effort by a tiny organization called CarbonWA, that gathered an astonishing 360,000 signatures—more than 5 percent of the population of Washington state. But I-732 is still being opposed by a variety of social justice groups, and more quietly opposed by some environmental groups. The stated reason is that I-732 doesn’t do enough to help poor people in Washington, who would be disproportionately impacted by a carbon tax. I-732 is not perfect, but it goes further than any other serious climate proposal in addressing impacts on the poor. And when it comes to climate change, we cannot let the perfect be the enemy of progress.

I-732 is a particularly easy target, as it suffers from one very prominent blemish: inclusion of the dreaded word “tax.” So successful has the Republican machine been in demonizing the T-word that it induces a Pavlovian aversion for any increase in revenues. Without reliable and accessible information about climate change or climate policy, and with a persistent doubt about any tax at all, carbon taxes sound like an ugly option. (Such is the case with highway funding: Our nation’s roads and bridges crumble and collapse, and yet the first increase in the federal gasoline tax in 23 years remains politically off-the-table.)

But the economics of a carbon tax are sound—no credible economist disputes that it is lowest-cost way of reducing emissions. The carbon content of all fossil fuels are well-known, so it is relatively easy to set a carbon tax based on its post-combustion emissions. The starting carbon tax rate being proposed is $15 per ton of carbon dioxide, or a 15 cent–per-gallon increase at the gas pump. The point of a carbon tax is to place a price on carbon, so that emitters—both individuals and corporations—have an incentive to change their behavior to reduce emissions.

The burden of a carbon tax for Washington state residents is relatively low—Washington ranks toward the bottom of all U.S. states in energy costs. The average natural gas bill of $26 per month would increase by about $1, though a good number will undoubtedly pay more. Most Washington state residents would not pay extra for electricity, as the state derives about 70 percent of its electricity from dams. But even small increases in energy prices become serious for those living at or below the poverty level, who may have no disposable income. So, to reduce the impact on poor and lower-income individuals and households, I-732 recycles the carbon tax revenues by reducing Washington’s high and regressive state sales tax rate by 1 percent. This is the largest budget item for I-732, effectively transferring back to Washington taxpayers about 65 percent of what the carbon tax is supposed to collect, in the form of sales tax relief. The bill also provides a match of the federal Earned Income Tax Credit up to $1,500 for low-income working families, accounting for another 10 percent of the collected revenues.

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This is apparently not enough for the I-732’s detractors: members of an umbrella group, Alliance for Jobs and Clean Energy, a coalition of Washington state environmental groups, social justice groups, labor groups, advocacy groups for communities of color, and Washington chapters of national environmental groups. Members of the alliance are well-funded, enjoying support from the likes of Tom Steyer and Microsoft co-founder Paul Allen. Their objection has been that I-732 “doesn’t do enough” to help poor people and misses opportunities to “invest” in clean energy.

The alliance has an alternative proposal, which in fact does far less, on both counts. In a four-page document, the group proposes a confusing mix of a carbon “fee,” paired with a cap on emissions, and proposes to spend the fee revenues on “clean energy, clean water, and healthy forests.” The proposal would earmark 25 percent of these expenditures “to benefit disadvantaged communities.” How exactly would they do this? One alliance member I talked to said that they might be used to buy solar panels for lower-income households (sure to be a hit in the cloudy state). The alliance proposal would not reduce Washington’s regressive sales taxes.

The alternative proposal also does less to reduce emissions. It is not clear what would be covered by by their “cap” and how that would work in conjunction with a carbon “fee,” which are really two different ways of doing the same thing: pricing carbon. Mixing the two strategies usually means neither will fully work. The alliance proposal is also murky on how quickly the fee would increase. The revenue from the fee, far from going to help poor people, would go into a “Carbon Reduction investment Fund,” which “will incentivize verifiable carbon reduction projects” and “tap into the entrepreneurial spirit of Washington businesses, creating thousands of quality jobs on our path to a low carbon economy.” Again, when it comes to carbon policy, details matter, and the alliance proposal provides very little..

A startling and revealing moment occurred in a recent debate broadcast by public radio station KUOW in Seattle, a CarbonWA staffer squared off with an alliance group opposing I-732. An alliance member advocating against the task was asked, “If this initiative failed, and no other carbon pollution tax passed, would you regret your opposition to this one?” Her answer was a flat “No.”

Climate change is not a future crisis. It is a present humanitarian and ecological crisis and humankind does not have the luxury of this kind of pettiness, least of all among different Seattle-based progressive groups, all of whom at least purport to be concerned about climate change.

Taking only a slight step back for perspective, there could be a momentous precedent that could be set by the first carbon tax in the United States.

Washingtonians should not let this opportunity pass.