Washington’s Carbon Tax: Don’t Let Perfect Derail the Good

November 7, 2016

I-732 is the designation of the Carbon Tax initiative on the Washington State ballot, that has drawn surprising resistance from some folks that should know better.

UPDATE: Grist:

I-732 has split the environmental community, as we reported last week. Some climate activists and scientists like James Hansen support it as a way to make polluters pay and start fighting climate change. Others, like Jones and Klein, oppose it, arguing, among other things, that it’s a “corporate giveaway” because it would lower a manufacturing tax.

Many corporations don’t seem to appreciate the gift, though. Koch Industries has donated $50,000 to the No on 732 campaign. In total, manufacturers, utilities, oil industry groups, and other big business interests have pumped more than $1.3 million into a campaign to defeat the measure, much of it in the last few weeks.

Never thought we’d see Naomi Klein and the Koch brothers on the same side of anything — but, hey, stranger things have happened the epic election cycle of 2016.

If someone’s throwing you a life preserver, you might not want to dither about the color.

Wake the hell up, people.  Remember “There’s not a dime’s worth of difference between Al Gore and George Bush”?
Same impulse that demonized Obama, Gore, and now Hillary – might torpedo Washington’s experiment in carbon pricing.

Naomi Klein in The Nation:

The backers of I-732 are running on a pessimistic platform of “just do something,” preying on the real urgency that so many of us feel in the face of the climate crisis. But sometimes “something” is worse than nothing, especially if it will stand in the way of better proposals down the road.

A paltry, revenue-neutral carbon tax simply cannot deliver the massive green energy investments and community-driven solutions we all need. Science-based climate action means an unprecedented, rapid, and decisive shift to renewables; a truly equitable carbon tax can play an important role in spurring the transition, but it won’t work unless we make the polluters pay, and put their immoral profits to work repairing the damage they have knowingly created. The way to do that is to mobilize the broadest possible coalition—led by the front-line communities who stand to benefit most from building a cleaner and fairer economy.

“Don’t let the perfect be the enemy of the good,” I-732 proponents like to say. It sounds good, but it is not what opponents of this initiative are doing. “Perfect” is not on the table—we lost that option when climate action was delayed for decades. So much time has been lost, in fact, that now we have just one shot to get the policy right. And that means we can’t let the politically difficult be the enemy of the scientifically and socially necessary.

 

This would probably make sense in a perfect world where we were about to apply a national and international price on carbon, but barring a completely unforeseen realignment in Tuesday’s election, we aren’t.

We’re going to continue to move forward through the momentum of a thousand grassroots efforts in places as diverse as Germany, New England, and Alberta.
Until there is a strong, overwhelming will to apply a price on carbon nationally, and a clear idea of what that looks like, Statewide efforts in the laboratories of democracy, like New England’s Regional Greenhouse gas initiative, California’s Cap and Trade Program, and carbon levies in British Columbia and Alberta are the Petri dishes where we will not only prove out what works, but continue to send a message, wave after wave,  that a price on carbon not only makes sense, but helps keep economies strong, diverse, and moving into the 21st century of renewable and sustainable technologies.

Natural Resources Defense Council:

The nation’s first carbon market – the Regional Greenhouse Gas Initiative (RGGI) – is a huge success for the public’s health, the environment, and the economy, according to a new report released today. RGGI states – Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New York, Rhode Island, and Vermont – have reduced carbon pollution by one-third, while saving consumers $1.5 billion on their utility bills, creating over 22,000 additional jobs, and bringing $2.9 billion in additional economic benefit to the region since it began in 2008.

Today’s Analysis Group’s report updates its 2011 examination of the first three years of RGGI. Like the study of RGGI’s earlier years, they found that the initiative produced net benefits to consumers, state governments, and individual state economies. In fact, as the program has matured, states have better maximized the benefits and developed tools to successfully mitigate consumers’ costs. In particular, states have increased reinvestment in state energy efficiency programs and other clean energy programs – reinvestment that “stands out as the most economically beneficial use of emission allowance revenues.” RGGI is proof that states can reduce carbon pollution – taking action against climate change, the greatest environmental, public health, and humanitarian threat of our time – and economically prosper from it.

With EPA expected to release its final plan for cutting power plant pollution, other states should follow RGGI’s lead and embrace and expand clean energy policies in a market-based system. With carbon pollution down over 30 percent with help from RGGI, we know it works as designed to combat climate change–and today’s report helps highlight the many collateral economic benefits it can deliver states at the same time.

Clean Energy is the Driver of RGGI’s Success

For the most part, states have used RGGI revenues to build on the region’s many established clean energy programs to further expand these critical complementary policies, such as portfolio standards requiring specific amounts of energy efficiency and renewable energy in serving utility customers, and clean energy financing mechanisms. These reinvestment decisions are key to RGGI’s success.

RGGI states are national leaders in energy efficiency – the top three performing states (achieving savings from smarter energy use that are greater than 2 percent of their utilities’ total sales) are all in RGGI. Between 2012 and 2014, energy efficiency investments, driven both by state policies and the reinvestment of RGGI proceeds, helped reduce customer electricity bills by $341 million and natural gas bills by $118 million. In addition, energy efficiency has further reduced the region’s electricity and heating bill by suppressing wholesale electricity prices.

Renewable energy as a percent of total electricity generated has doubled since RGGI began, spurred by renewable portfolio standards (RPS) and expanded clean energy financing programs for municipalities, public institutions, and interested residences and businesses. The growth in in-state renewable energy development has helped the RGGI states reduce out-of-state fossil fuel purchases by $1.27 billion over the last three years. Renewable energy also has been integral in improving the region’s energy security and resiliency. The carbon allowance market, in tandem with complementary polices, has driven the development of robustclean energy economies and boosted homegrown clean energy jobs across the region.

Toronto Globe and Mail:

The latest numbers from Statistics Canada show that B.C.’s policy has been a real environmental and economic success after six years. Far from a being a “job killer,” it is a world-leading example of how to tackle one of the greatest global challenges of our time: building an economy that will prosper in a carbon-constrained world.

B.C.’s tax, implemented in 2008, covers most types of fuel use and carbon emissions. It started out low ($10 per tonne of carbon dioxide), then rose gradually to the current $30 per tonne, which works out to about 7 cents per litre of gas. “Revenue-neutral” by law, the policy requires equivalent cuts to other taxes. In practice, the province has cut $760-million more in income and other taxes than needed to offset carbon tax revenue.

The result is that taxpayers are coming out ahead. B.C. now has the lowest personal income tax rate in Canada (with additional cuts benefiting low-income and rural residents) and one of the lowest corporate rates in North America. You shouldn’t need an economist and a mining entrepreneur to tell you that’s good for business and jobs.

At the same time, it’s been extraordinarily effective in tackling the root cause of carbon pollution: the burning of fossil fuels. Since the tax came in, fuel use in B.C. has dropped by 16 per cent; in the rest of Canada, it’s risen by 3 per cent (counting all fuels covered by the tax). To put that accomplishment in perspective, Canada’s Kyoto target was a 6-per-cent reduction in 20 years. And the evidence points to the carbon tax as the major driver of these B.C. gains.

Los Angeles Times:

In truth, carbon emissions have fallen faster in California than anticipated, reducing the demand for emissions allowances and highlighting the achievements of the state’s overall strategy to reduce pollution. California has been a national and global leader in pioneering smart and workable environmental solutions that produce real results. And that tradition is continuing with its cap-and-trade efforts.

The results of the May auction show that the state’s emissions pricing mechanism adapted beautifully to the reduction in the demand for allowances. The program sets a minimum price, below which allowances will not be sold. So when demand for allowances falls (which means fewer are sold and even less greenhouse gas will be emitted), the gains are realized for the environment rather than in falling prices for permits to pollute. Some earlier carbon trading programs — including the largest one, set up by the European Union — do not have a minimum price. That has threatened the efficacy and stability of those efforts.

Somehow, “just do something” sounds like a great idea to me.
Some states and provinces have, and it’s working out, and teaching us things. I’m struggling to find the down side of that.

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16 Responses to “Washington’s Carbon Tax: Don’t Let Perfect Derail the Good”

  1. davidjkatz Says:

    I agree. This attitude kills me.

  2. Tom Bates Says:

    lets see if the carbon tax is actually needed. Lets do something unknown look at the actual warming effect of CO2. NASA did and found it was 2/10ths of a watt which winds up as 0.034F warmer. That turns out to be 340 times less than NASA models showing the warming for the next 25000 years due to changes in earths tilt and orbit. Lets do something more, lets look at the science to see if the CO2 increase has a positive effect. per another NASA study the increased CO2 has increased plant mass by 8 percent which means 8 percent more food so about 415 million people are alive who would otherwise have starved to death thanks to that CO2. Lets look at the weather worse claims. Per wiki the most number of hurricanes since 1880 to strike the USA was in 1886. Last year and perhaps this year along with 32 other years since 1880 zero hurricanes struck the USA. Weather is less worse not more. Incidentally, the ocean rise trend per NOAA tidal gauges measurements is 3 inches in 100 years and washington will not have to worry as the continental edge in the west is rising not sinking like it is in the north east. It is warmer and less hurricanes, we have hundreds of millions of people alive who would be dead, and warming is so small it can hardly be measured, that is the reality.

    • dumboldguy Says:

      PLEASE DNFTT and instead comment on the substance of this post. Why do some of you let this troll distract you from the real issues?

      And I still suspect he’s a POE and is scamming us. No one could be stupid or deluded enough to say “Weather is less worse not more”. He’s kidding.

    • webej Says:

      25000 years ??!! Nobody is worried about that period. Reminiscent of Gary Johnson’s deflection of the problem — in a billion years the sun will become a red dwarf and engulf the earth. And 800 million years ago it was much warmer too, without human influence. That’s why I tell my children: No food today, because in 100 years none of you can eat anyways. Besides, in the past there were also fathers who looked on as the children starved because the city was under siege. Duh.
      And why should Washington care about CO² when it is the eastern sea board that is subsiding? So we can put shit in the river upstream and only the people downstream should have purification and sanitation of water…

      The logic is stupefying. Not to mention that the rest is filled with factual errors.

      • otter17 Says:

        I don’t know how people can make the “don’t worry about X problem because on Y time scale it doesn’t matter anyway” with a straight face. There has to be some little voice in there somewhere shouting, right?


  3. I could not agree more.

    “Better a diamond with a flaw than a pebble without.” — Confucius

  4. John Oneill Says:

    Naomi Klein thinks carbon doesn’t raise temperatures, capitalism does. She woke up to climate change years after everyone else and wrote ‘ This Changes Everything ‘, which proposed exactly the same remedy for the climate as she’d previously been recommending for society.

    • otter17 Says:

      Well, then let’s not use her remedy, then?

      • dumboldguy Says:

        Klein didn’t have any real “remedy”, beyond being hopeful that mankind will wake up and do something about the failings of human society and AGW in time to avoid global climate catastrophe.

        • otter17 Says:

          Yes, correct, the likely non-existent remedy that the homo sapiens species can be brow-beaten into acting as a rational actor en masse.

          • dumboldguy Says:

            Why did you qualify that with a “likely”? There is no “remedy” for man’s intellectual and behavioral inadequacies. We will dither around until the SHTF (as it already has with Trumps’ election), and then scurry around impotently. In the case of CAGW, it will likely be far too late. Once we pass the irreversible tipping points that are waiting out there, Mother Nature will turn the flame under the pot to HIGH, it will boil, and we frogs will cook.

          • dumboldguy Says:

            WordPress has been spotty the last few days. I just tried to post a reply and it disappeared—-same thing with jimbills. And I had a simultaneous mass dump of over a dozen new Crock comments in my inbox yesterday—-all with a 10:57 time stamp. What’s going on?

            Maybe my comment will appear at 10:57 a week from now? If not, I asked why otter17 qualified his comment with “likely”. IMO, there is no remedy. The human race will dither around with half-measures until the irreversible tipping points are passed and the SHTF. It will be too late and there will be no rationality in our response. We can ignore Mother Nature for only so long before she turns up the heat under the boiling pot and cooks all us “frogs”.

          • dumboldguy Says:

            (Damn you WordPress!)

            Anyone who cares can cut and paste the two comments into the version they prefer.

          • otter17 Says:

            Well, I say “likely” because making a certain statement that something is impossible isn’t exactly logical because there are an infinite array of possible combinations of actions to try out there. Something being “impossible” means you already have demonstrated that a very large number of possible actions do not work. Climate denial folks fall into this trap when they make the implied claim that they see no way to reduce GHG emissions as recommended by scientists, hence one of the reasons why they retreat to denial of the problem.

            That being said, we may be fortunate that we don’t a perfect societal rational actor. We may be able to pull off the continuation of a modern civil society that uses energy without increasing net GHG emissions and possibly not an overly-crummy climate or ocean acidification situation. We may be able to do that despite a fraction of irrational actors in our societies claiming it was all a hoax past 2100, with the issue effectively resolved on humanity’s part. You see occasional folks today saying the ozone hole degradation by CFCs was all a myth, even now long after the Montreal Protocol and the hole on its way to closing/healing.

            We haven’t tried every possible combination yet. As you say, it is likely that we could be too late for a somewhat catastrophic result. Likely is the operating word here, not absolute certainty. Maybe a large methane clathrates burp or unforeseen permafrost melt feedback is in our future within the century and all our efforts to keep the temps down were for naught, nobody can muster the geo-engineering scheme to stop it, chaos, etc, etc. Operating under the assumption that we have a possibility to arrive at a reasonable outcome or buy some more time for that outcome is not necessarily a bad operating assumption.

  5. webej Says:

    >> But sometimes “something” is worse than nothing, especially if it will stand in the way of better proposals down the road.
    >> So much time has been lost, in fact, that now we have just one shot to get the policy right.

    Don’t know much about the debate, but I don’t get why it’s a one shot deal?

    Once the principle of a carbon tax is in place, there can always be adjustments to what the price should be, how the taxes are compensated elsewhere, and other policies regarding energy and sustainability. In fact, adjustments just seem completely predictable as insights change. But the principle of shifting consumer preference with a straight forward tax remedy seems too simple to make something complicated.

  6. webej Says:

    In the Netherlands they had a rebate for electric cars (there is a one-time tax on each vehicle proportional to its weight and emissions, partly to compensate environmental damage, partly to compensate wear to the road network). They cancelled it because it was too successful, and thus costing tax revenue. Most of the people were buying hybrids (some not even bothering to charge), just to get a cheaper car. Many of the cars were lease cars which are now being sold abroad on the secondary market, often because policies there encourage buying.

    A classic case of policy run amuck. They could have scrapped the hybrids from the program and stipulated only private sales, not commercial parties. Why not? Because it was a double-hearted program, trying to stimulate the economy and the automobile sector after the 2008 recession, while simultaneously boasting about your green credentials.

    It is reminiscent of the EU debacle with bio-mass, which encourages the switch from coal to wood chips imported from the US. Even though this is hardly sustainable and therefore no saving on carbon emissions.

    Nevertheless, the principle remains clear as day: Pricing, even if marginal, will always influence consumer behaviour.


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