Washington’s Carbon Tax Initiative Splits Greens
October 26, 2016
One of the most perplexing, and maybe saddest, stories of the year – comes out of Washington state, where a carbon fee-and-dividend bill is on the ballot, yet climate activists can’t seem to unite and support it.
Carbon Washington, the initiative campaign, maintains that Initiative 732 would be revenue neutral and that, by reducing the state sales tax, the proposal would make taxation in Washington less regressive. (Washington does not have an income tax, so it relies heavily on state and local sales taxes, which can reach as high as 9.5 percent in some communities.) The state’s Office of Financial Management, however, says the proposal would reduce tax revenue overall.
Initiative 732 faces opposition from the usual sources, like the fossil fuel industry and manufacturers. What is more surprising is that many environmental, labor and minority groups have opposed or declined to support the proposal. The Sierra Club, the Washington Environmental Council and other groups have said that they support the aims of the initiative, but argue that it falls short because it won’t directly invest money in renewable energy, mass transit and other projects they argue are more important than cutting the sales tax. These criticisms have some merit, and a better-designed proposal would dedicate some money for programs designed to ease the adjustment to a low-carbon economy.
A recent poll showed that 42 percent of voters in Washington support Initiative 732, 37 percent oppose it and 21 percent are undecided. Most state lawmakers are opposed to the ballot measure, including Gov. Jay Inslee, a Democrat who is seeking re-election and previously proposed a cap-and-trade system. The Audubon Society’s Washington chapter and many climate scientists, however, are backing the proposal. Even if voters reject this particular initiative, the idea of putting a price on carbon is still one of the most straightforward, economy-friendly ways to deal with climate change.
Here’s the situation. There’s a carbon tax on the ballot in Washington this November, meant not just to put the state on the path to its climate targets but to serve as an example to other states.
The measure, called Initiative 732, isn’t just any carbon tax, either. It’s a big one. It would be the first carbon tax in the US, the biggest in North America, and one of the most ambitious in the world.
And yet the left opposes it. The Democratic Party, community-of-color groups, organized labor, big liberal donors, and even most big environmental groups have come out against it.
Why on Earth would the left oppose the first and biggest carbon tax in the country? How has the climate community in Washington ended up in what one participant calls a “train wreck”? (Others have described it in more, er, colorful terms.)
That turns out to be a complex and ill-fated story, revealing divisions among climate hawks — over who pays, who benefits, and who decides — that will not long stay confined to the West Coast. The future of climate politics is playing out in Washington state, and it is not pretty.
Before jumping into the conflict, it helps to understand exactly what I-732 would do. Luckily, it’s pretty simple. It would do four things:
- Impose a tax on carbon emissions, starting at $15 per ton in 2017, rising to $25 per ton in 2018, and then rising every year thereafter at 3.5 percent plus inflation, topping out at $100 a ton (in 2016 dollars). The tax would reach citizens in the form of a gas tax and a tax collected by electric utilities.
- Reduce the state sales tax by 1 percentage point.
- Fund the working families tax rebate (WFTR), which would bump up the federal earned income tax credit to provide up to $1,500 a year for 460,000 low-income households.
- Eliminate the business and occupation tax on manufacturing.
According to CarbonWA, the group that put it on the ballot, this policy has a number of things going for it.
First is the large, predictable, and steadily rising price on carbon, something climate policy analysts have been advocating for decades as the most cost-effective way to reduce emissions.
Second, it protects low-income families. Reducing the sales tax, in combination with the WFTR, would more than offset the otherwise regressive pocketbook impact of the carbon tax on the lowest-income quintile. It would have a net progressive impact on the state tax code (currently the country’s most regressive).
And yet the path to a carbon tax in Washington remains uncertain for backers of Initiative 732. Despite the relatively subdued opposition from Republican lawmakers and fossil fuel interests, CarbonWA and its supporters face much louder — and, perhaps, more damaging — criticism from within the environmental movement.
In a move that came as a surprise to many, long-standing and well-respected groups like the Washington Environmental Council and the Sierra Club chose not to support the bill. The initiative, they argue, doesn’t go far enough to protect the communities most at risk from the impacts of climate change and environmental pollution, nor does it help spur the kind of massive reorganizing of energy and transportation infrastructure needed to fight climate change. The nation’s most aggressive price on carbon, they argue, simply isn’t enough.
It’s a sharp contrast from traditional climate debates, which often center on the basic question of whether climate change is a real, man-made phenomenon. The debate over Initiative 732, which has raged for more than a year within the Washington environmental community, and, more recently, in the public spotlight, seeks to answer a more difficult question: not whether we should act to slow climate change, but how exactly we should do it.
The story is long, convoluted, and either saddening or infuriating, depending on your view – the ThinkProgress and Vox pieces above are both very long and worthwhile – but boiled down, seem to be saying that the “Big Green” enviro community in Washington state has done a lot of work to get diverse economic and ethnic communities behind a cap-and-trade solution, but has not yet gotten that on the ballot. They are concerned there is not enough buy-in across the spectrum to make the program successful long term, and that there may be impacts on poorer communities that could be avoided. Proponents of the bill insist these impacts are mitigated.
The fact remains that there is one climate initiative on the ballot, and a problem that is well out of control, and crying out for the laboratories of democracy to try as many solutions as possible.
It seems more than shameful that Greens can’t bring themselves to unite on a solution that may not be everyone’s first choice, but is far worse than an alternative of perhaps never doing anything. In that way, it seems to mirror this year’s larger national election campaign.