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.

New York Times:

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.

Dave Roberts in Vox:

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.

voxcarbtax 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).

ThinkProgress:

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.

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18 Responses to “Washington’s Carbon Tax Initiative Splits Greens”

  1. davidjkatz Says:

    Amen. Nothing worse than when the Left starts infighting.

    Come on Washington. We need to move on this. Live with the imperfections and get moving1


  2. In other states, the proceeds of this carbon tax are being used to fund and prop up the failed nuclear industry. The fact that a pro nuclear promoter Hansen is behind this reeks of the same motive.

    36 Global Warming Carbon Footprint Secrets That The Nuclear Industry Is Covering Up And Hiding, Most Costs Or Externalities Are Not Counted Or Included In Negative Climate Change And Negative Health Effects Caused By Ionizing Radiation
    http://www.agreenroadjournal.com/2016/09/36-global-warming-secrets-that-nuclear.html


    • But this bill avoids that by being revenue neutral and “giving” the money back to the tax payers rather than funding fossil free energy sources.

      It is precisely this reason the national environmental groups don’t support the bill.

      You should be arguing for this bill, not against it.


  3. […] Why I support Hillary Clinton – 3. Trust * Washington’s Carbon Tax Initiative Splits Idiot Greens – spot my addition * Immigration Makes Us All Richer – So The IMF Says And […]

  4. Paul Whyte Says:

    When the good becomes the enemy of the excellent, the worst ends up the winner.

    Basic politics seems to be missing from Big Green in Washington state.

    Why USA politics gets plagued by gridlock even with the environmental movements is an interesting feature.

    It seems that to be ideologically perfect is more important than taking some ground for the fossil lobby.

    • Gingerbaker Says:

      And what if the carbon tax is actually just a lousy idea, only popular because most people only spend about 5 seconds thinking it through?

      What if it is doomed to accomplish virtually nothing meaningful, ie, it will have little to no benefit to increasing the rate of deployment of RE infrastructure?

      What if it requires a huge amount of political capital to get some version of one through, and then it turns out that – surprise! – people do not like paying even more for their gasoline and natural gas?

      What if simply increasing targeted RE subsidies was a much more simple, reliable, cheap, painless, popular, and effective way to go forward? And what if we squandered our political will on a carbon tax instead, and poisoned the well?

      Still waiting for someone to give me a cogent argument on why a carbon tax is preferable to direct subsidies.

      • mboli Says:

        Direct subsidy for what? The goal is to reduce carbon footprint of gasoline and electricity usage.
        Provide a tax rebate to people for driving less than the previous year? Subsidize owners of fleet vehicles for upgrading average efficiency?
        Have the state build a utility-scale solar generating station? Pay industries for upgrading manufacturing to more electricity-efficient processes?
        Do you have a plan to pay for reduced CO2 footprint from gasoline/electricty that doesn’t involve deciding who gets it? And deciding whether *this* subsidy would be more effectful than *that* subsidy?
        *Anybody* can benefit from the tax subsidy. If you use less gasoline or use gasoline more efficiently you get it. If you generate electricity with less CO2 or use it more efficiently you get it.
        That’s the fairness argument. (There are economic efficiency arguments also, of course.)

        • Gingerbaker Says:

          “Direct subsidy for what? “

          For building new RE infrastructure, of course. What else? How are we to stop burning fossil fuels if the alternative (Renewable energy) is not yet available?!? That is what a carbon tax is supposed to do – drive more RE. Not batter people into using less gasoline.!

          “Have the state build a utility-scale solar generating station? “

          Yes – that would be great!

          “Do you have a plan to pay for reduced CO2 footprint from gasoline/electricty that doesn’t involve deciding who gets it? And deciding whether *this* subsidy would be more effectful than *that* subsidy?”

          Are you for real? We are not inventing the wheel – we already have subsidies for RE.


      • Gingerbaker,

        And what if the carbon tax is actually just a lousy idea, only popular because most people only spend about 5 seconds thinking it through?

        What if it requires a huge amount of political capital to get some version of one through

        What if it doesn’t? 60-70% of the population will spend less on energy. That’s a majority, and it’s the more price-sensitive, i.e., poorer segments of society that will be advantaged by the tax on carbon (*fee*, since nothing goes to the government).

        and then it turns out that – surprise! – people do not like paying even more for their gasoline and natural gas?

        Take another 5 seconds and realize that you have this backwards.

        What if it is doomed to accomplish virtually nothing meaningful, ie, it will have little to no benefit to increasing the rate of deployment of RE infrastructure?

        Really? If RE and nuclear are cheaper than fossil fuels, who is going to build FF infrastructure?

        • Gingerbaker Says:

          “60-70% of the population will spend less on energy. “

          Which of the 10,000 different carbon tax propositions do you pull these figures from? And how are people going to know they are paying less, if they actually are? What they see is surcharges on gas and home heating.

          But you say they will receive more than they paid in – so where is the vaunted unbelievably powerful economic pressure to use less FF’s supposed to come from, if people are using FF’s, but paying LESS for them? This is pretty shockingly illogical. And pretty shockingly novel – as every other account I have read about the carbon tax relies on the fact that people will be paying MORE for FF’s, and therefore somehow influencing national energy policy.

          “Really? If RE and nuclear are cheaper than fossil fuels, who is going to build FF infrastructure?”

          The same people who are building and using it right now – because RE has been cheaper than FF for a long time. Especially if external costs are counted, which for some strange reason (the “free” market doesn’t give a shit, which tells you all you should need to know about why relying on it, instead of government mandate, for our energy future is such a terrible idea). The corporations with stranded assets who buy influence to rig the system. The co-ops who would like to invest in RE, but would be receiving zero money from this scheme, and would be stuck with…. more stranded assets.

          These are the entities that need to build new RE. And if THEY received more targeted subsidies for RE, they could be building that infrastructure.

          Which is why I will repeat again – in what universe is a carbon tax a better approach than targeted subsidies for RE?


          • because RE has been cheaper than FF for a long time.

            Since you are challenging me vis relevant universes, why don’t you cite your references for this statement and which universe it applies to and what qualifiers you might want to add.

            Solar is cheaper than coal where you have excellent insolation such as the US southwest but not other places. Germany, for example would be electricity-carbon-neutral if they had spent all their money on nuclear rather than renewables.

            Wind is cheaper than coal if the resource is located conveniently and only to the extent that there is enough wind resource. For exapmple, in England there is not wind resourcee to supply all the power they would need, and the amount of investment in nuclear they would require to supply the balance would be the same as if they didn’t spend anything at all on wind.

            Which of the 10,000 different carbon tax propositions do you pull these figures from? And how are people going to know they are paying less, if they actually are? What they see is surcharges on gas and home heating.

            I refer to the version promoted and explained by Citizens Climate Lobby and James Hansen which espouses a direct, equal cash payout per adult citizen plus 1/2 share per child up to 2 children per family (that’s how they will know) and collection of the fee at the first point of sale, eg., at the mine or well-head. Simple, direct and, above all, transparent. If a trillion is collected, then a trillion is disbursed, and each citizen receives an equal share. That is what is called a revenue neutral tax since a tax is levied but all the tax is returned to the population and the government gets nothing.

            In the hypothetical case where each citizen uses an identical amount of FF energy, the price rises, but what they pay extra in their gas, oil, electric bills, etc. is returned EXACTLY in their rebate check. So FF prices rise, favoring carbon-neutral sources, but consumers feel no pain.

            In the realistic case where rich people use more energy than poor people, the rebate doesn’t cover the added expense for the rich people, but more than covers it for the poor people. Thus, the rich people are frowning and the poor people are smiling. Get it yet?

            Which is why I will repeat again – in what universe is a carbon tax a better approach than targeted subsidies for RE?

            Subsidies actually cost money. LOTS of money if you want to build a lot of infrastructure. A carbon tax costs zero except to the people who CHOOSE to use a lot and thus burden the rest of the population with the external costs.

            Recently nuclear plants have been closing or are scheduled to close because they can’t compete, allegedly to be replaced with renewables, but is this really true, or are they to be replaced by subsidized renewables or by cheap natural gas or, whatever? My guess is if there was a tax on fossil fuels, this wouldn’t be happening, or at least not happening as much. It’s sad.

            By leveling the playing field, i.e., including external costs to society, you allow all industry/technology/market intelligence to work towards the most efficient outcome, and exclude the distortive, inefficient work of special interests.


          • Oh, and duh. The intermittency problem (I’m a little rusty). In those places where “RE is already cheaper than FF”, that’s only the 30% or so, on average, that can be swapped out without dealing with the supply gaps that would exist in a 100% RE scenario, so yeah, that’s a big qualifier you left out.

          • Gingerbaker Says:

            “Subsidies actually cost money. LOTS of money if you want to build a lot of infrastructure.”

            Of course they cost lots of money – you are actually building something with them, thank you for making my point for me! RE costs money!

            Your carbon tax, depending on which way the wind is blowing either gives people money, or takes money from people. But zero of it actually goes for the and only thing we need to do to beat AGW – building and deploying new RE.

            It puts a small economic penalty on NOBODY who is actually in a position to make decisions about building and deploying new RE. It is a puny meaningless bit of nothing, designed to make people feel good about something – anything! besides the hard work of rolling up our sleeves.

            It certainly does not, as you say “leveling the playing field, i.e., including external costs…” – no one claims it does – the cost of a gallon of gasoline or heating oil would be too high for anyone to afford!

            It is essentially a token gesture. But it is less than that – talking about it, passing legislation, enacting it, administering it will squander huge amounts of time, money, and political capital. And nothing will get done because of it, EXCEPT it is almost guaranteed to piss people off and make them hate environmentalism. And if the people don’t get to that point all by themselves, rest assured the Koch brothers will inundate them with BS until they ARE there. And then where are we?

            As far as your stuff about nuclear being just groovy and RE being limited – I certainly do not have the patience or inclination right now to address that – I am too busy with real life, damn it.

          • Gingerbaker Says:

            short article on Alternet re failure of Canadian carbon tax to do much of anything positive:

            http://www.alternet.org/environment/why-exxon-loves-carbon-tax-and-voters-should-not


          • From what I can tell, all your broken-record questions and objections are answered in the discussion section.

            Only thing on which I can agree with you is that I’ve wasted too much time here.

  5. ubrew12 Says:

    ‘The tragedy of the commons’ used to mean that when it came to pointing out a problem in the commons, everyone on the right had a different reason why the problem didn’t apply to them. Now that we’re talking about solutions, everyone on the left has a different reason why the solution should apply to them.


  6. In response to Gingerbaker: Carbon taxation has definitely been carefully thought through, contrary to your assertion.

    Consider a world where fossil fuels are dirt cheap, a little like today: why would you expect people to not use them? Yes, some people out of concern for the climate will avoid using fossil fuels where they can, but they will not amount to more than a small minority (as is true today).

    Consider a business in the cheap-fossil-fuel world, planning to build any kind of facility: If they choose not to go with coal/oil/natural gas for their energy needs, their costs will be higher than their competitors, who may happily drive them out of business. That consideration will pretty quickly lead them to take the cheaper fossil-fuel route, ensuring little progress.

    Yes, you can subsidize renewable energy in the cheap-fossil-fuel world. This adds more energy availability to an already oversupplied system. That will tend to lower energy prices, which reduces what little incentive there is to conserve energy. Which is a problem, since we definitely need people to save energy as part of the solution. Yes, by subsidizing growth of renewables we can displace some fossil fuel use, but in response fossil fuel companies can, and will, cut prices. The cost of subsidies needed to put a serious dent in their output rises as a result.

    All of which adds up to this: We need to tax fossil-based carbon. A carbon tax that starts small and increases slowly and predictably over time steadily undermines the business model of digging up cheap fossil energy and dumping the waste into the atmosphere. It encourages people and businesses to shift away from fossil fuels as the cost of using them rises, stimulating investment in renewables and energy-saving technology. Returning revenues from the carbon tax to households stimulates the economy and allows people to adapt to the new reality of high fossil fuel prices. Make it revenue-neutral in ways which make tax codes less regressive such as reducing sales tax. Address problems by helping low-income citizens in other ways through social programs or the tax code. But make it expensive to use fossil fuels. That creates economic winners of people and businesses who choose the low-fossil-fuel route. That’s where the real numbers are in reducing carbon emissions.

    This is a well thought-through and progressive idea, definitely needed as central part of a strategy to address climate change.


  7. History is fun. Joe Romm, a highly qualified policy and technology wonk was a loud opponent of James Hansen’s carbon tax advocacy.Link: Memo to James Hansen: Your opposition to Waxman-Markey is ill-conceived and unhelpful. There isn’t going to be a carbon tax nor should there be. Get over it and move on.

    Seven wasted years later he’s changed his tune (no appologies offered, none needed).Link.


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