Carbon Tax Initiative in Washington State

It is rare these days for an environmental proposal to get support from both sides of the political spectrum.

And it is even rarer that such wide support deals with a new tax.

But such a proposal that may soon go to the voters of Washington State:

a carbon tax initiative.  

Let me tell you about this idea and why I support it.

A Washington State group, Carbon Washington, has drafted and is now getting signatures for an initiative (I-732)  to the legislature, so it will go to the legislature in Jan 2016 and then (if they don’t pass it) onto the ballot in Nov 2016.  An initiative to put a revenue-neutral tax of fossil fuels.

The group starts with the principle that because of the threat of global warming, the entire planet must reduce its use of CO2-emitting fuels.   Certainly true.  We must find a way to stop the rapid increase of CO2 in the atmosphere before the more severe effects become apparent later in the century.

But what is the most effective way to reduce carbon emissions?    There is a compelling argument that the best approach is to motivate the free-market system.   And how can you do that?    By taxing what you don't want: carbon emissions.

Initiative 732 would do so by putting a tax on carbon use, roughly $ 25 a ton of carbon.   But it does so in a revenue neutral way, refunding the tax revenues gathering by the carbon tax by REDUCING other taxes for an equal amount.  Thus, the overall economic impacts should be small.

For example, the state sales tax would be reduced by 1% in Washington State.

To ensure that local manufacturers are not put at a competitive disadvantage, the Business and Occupation tax (B & O tax) for manufacturers would be eliminated.

And to protect lower income folks, who spend a higher percentage of their income on fuel and heat than more well-to-do individuals, some of the carbon tax would go into a Working Families Rebate.

What comes in and out balance, making the initiative revenue neutral.

The idea of the carbon tax is not new.  In fact,  British Columbia has such a carbon tax, which seems to be working.  The same is true for Ireland.

A free market approach, such as the carbon tax, has proven to be appealing to free market and conservative think tanks, such as the Washington Policy Center (here and here are their analyses). And it has been supported on newpapeer editorial pages, such as in the Olympian.

There are other approaches to use financial incentives like cap and trade, an approach pushed unsuccessfully by Governor Inslee during the past session.  Cap and trade is a far more complex and unreliable method, setting a limit on carbon emissions and having major emitters bid on the right to do so.  Cap and trade has generally not been very successful where it has been attempted, as in Europe.

Now, there are folks that argue that since Washington State is such a small part of the global CO2 problem, we should not worry about it.  But everyone is a small part of the problem, which can only be solved by everyone doing their bit.   And we are a significant part of the problem:  what is our biggest industry, one that produces an fuel-intensive transportation system?    Aircraft from Boeing. And now we are considering building huge export terminals for coal.

We have as much responsibility as anyone to reduce our carbon footprint.  And considering our position as a leading world technological center, we have the responsibility to lead.

http://www.nytimes.com/2015/06/07/opinion/the-case-for-a-carbon-tax.html

The carbon tax makes particular sense now because auto/track gas prices are relatively low, as is natural gas used to heat our homes. Folks will not feel the impact in the same way as when gas prices are above four dollars.

The initiative is well written and clear.  If I had drafted it, I would have made two adjustments:

1. Have the carbon tax fade out when gas prices get about 5 dollars a gallon
2. Use, say, 25% of the tax revenues to deal with regional traffic, perhaps by adding a fleet of commuter buses for travel into and out of our major cities (like Seattle, Tacoma, and Spokane).

But the current version is fine.

The bottom line is that I support the Carbon Tax initiative and I hope you will as well.  CarbonWashington need signatures for the initiative and financial support.  

The Carbon Fee Initiative (1631) Has Major Problems: Let's Try Something Better

This fall, voters in Washington State will consider an initiative (1631) that, if passed, would put a fee on carbon and use the funds to "reduce pollution, promote renewable energy, and address climate change impacts."  Superficially it sounds good, but underneath the hood there are very serious problems.

In this blog, I will analyze Initiative 1631, note some its major deficiencies, and suggest a far better approach (a revenue-neutral carbon tax that would improve Washington's regressive tax structure).

As I described in my previous blog, I am a strong believer in carbon taxes and was an enthusiastic supporter of the defeated Initiative 732.   Mankind is doing too little to slow carbon emissions into the atmosphere, and a well-designed carbon tax or fee can use the free market to effectively respond to the problem.  Economists of all political backgrounds acknowledge the power of taxing what you don't want (in this case emissions of carbon) in encouraging people to make different choices.  Like driving smaller cars or switching to electric vehicles.

But Initiative 1631, whose goal is to initiate a carbon fee in Washington State, is deeply flawed and poorly constructed, and I believe destined for certain and dramatic defeat.

The Essentials

Initiative 1631 would establish a carbon fee that would slowly increase over time.  Unlike Initiative 732, it would not be revenue neutral, but would use the proceeds of the fee to support climate justice, renewable energy, retraining, and other activities related to global warming impacts.  

The Problems

There are so many serious deficiencies with this initiative, one hardly knows where to begin.

1.  How the money will be spent is vague

There are really no clear guidelines on how the money will be spent.  15%  should address the "energy burden" of poor households, 10% goes to the Tribes, 35% to environmental justice, $50 million to help displaced fossil-fuel workers, and the rest to vague goals in supporting renewables and clean energy.

Decision authority on how the money will be spent will be given to a 15-member board appointed by the Governor to four-year terms, and would include one tribal representative, one representative of vulnerable populations/health action areas, and the six co-chairs of a collection of panels.   So basically a group of liberal activists, appointed by a Democratic governor will make the decisions.

There is no strategic plan, no requirements for technical knowledge, and a guarantee the spending will be highly political.  Not only is such a group practically guaranteed to spend the funds unwisely, but such a plan would certainly lose the support of moderates and Republicans. 

Most folks are not willing to spend money when they don't know what they will get.  That is the problem of I-1631.  Can you imagine if the bill had specified real, tangible benefits?   Such as supporting the rapid build out of rail from Seattle to its eastern/northern suburbs?

2.   The Initiative Would Make Washington State's Regressive Tax Structure Even Worse

Whether the money comes from a tax or "fee", the effect is the same... to make the cost of carbon fuels more expensive. Money people will have to pay out.  Unlike I-732, the proposed initiative will not return the funds to taxpayers, but use the funds for a wide range of unspecified activities that are somewhat connected to climate change in the minds of the oversight board.   

The financial impacts of I1631 are clear:  this is essentially a new tax that is not based on income.   It will substantially raise the tax burden on everyone, including low-income folks, who are just as dependent on cars and trucks as anyone.  Thus, just like the sales tax,  it will be highly regressive, with the poor paying a higher percentage than their richer neighbors.  The media has headlined our regressive tax structure in Washington State.  I-1631 will make it much worse.

3.  I-1631 is Highly Partisan

To pass in Washington State and to serve as a blueprint for action for other states, any carbon tax or fee must have bipartisan support.  A revenue-neutral carbon tax could garner support from both sides of the aisle, as was true for for I-732.  For example, ast year, major Republican figures came out in support of a national revenue-neutral carbon tax.


Unfortunately, it would be hard to design an approach more likely to turn off Republican and independent voters than I-1631.  Not only is it not revenue neutral, but the funds are hardwired in the direction of Democratic supporters (labor, the tribes, minority and low-income "climate justice" groups).   Even worse, the control of the funds is put in the hands of an oversight committee selected by a Democratic governor.

I-1631 is designed to reject the moderate and conservative electorate (e.g., nearly all of eastern Washington and Vancouver, WA) and will not be suitable to serve as an example to the nation.

4.  I-1631 Gives Too Many Exemptions and to the Wrong Groups

To garner support, I-1631 gives exemptions to many business groups.  For example, it exempts local power companies (e.g., PSE), which is a total mistake since it represents a major user of fossil fuels.  The initiative also exempts coal-burning facilities (e.g., the Centralia coal plant), that offering perverse incentives to burn more coal, one of the dirtiest fuels.  And there a dozens more exemptions that I won't list.   I-732 did not do the exemption thing, but removed the B & O taxes to help businesses.

5.  I-1631 Starts Off With Too Little Impact

This initiative begin with a fee of $15 per ton, which would increase gas prices  by about 14 cents a gallon.   Not enough to make folks alter their lifestyle or the vehicles they purchase. Everything we know about climate change tells us that a large and immediate reduction is needed.  I-1631 starts weak, particularly compared to I-732, which began at $ 25 a ton of carbon emissions.

I could go further about the problems with I-1631, but you get the point:  this is a hopelessly flawed initiative that not only won't effectively address climate change in our state and would waste huge sums of money, but it will needlessly politicize what should be a bipartisan effort.   I should note that the key supporters of I-1631, The Alliance for Jobs and Clean Energy, the labor unions, and the Sierra Club actively opposed the revenue-neutral carbon tax (I-732).  

Why?  Clearly, because they did not gain access to the money.  With I-1691 they would.

A Revenue-Neutral Approach:  Far Superior By Any Measure

Now imagine a different approach, one in which a sufficiently large carbon tax is applied to encourage folks to reduce their carbon emissions.  An approach that would refund ALL the money back to the people so they are not taking a financial hit.  A revenue-neutral approach.

But it could be better than that, we can refund the carbon tax in a way that provides preferential relief to low-income people.  There are many ways to do this.  We might reduce the State sales tax by 1-2%, lessening the most regressive tax we have.   Or we could give everyone back the same carbon tax dividend, which would preferentially help low income folks that can't afford the carbon rich lifestyle of the wealthy.   Some funds could go into a low-income tax credit, as done in I-732.   

Our state has the most regressive tax structure in the nation.  The proper use of a carbon tax could help improve this dismal situation.

But it is even better than that.  The carbon tax could be bipartisan, bringing the State together to begin to address the threat of anthropogenic global warming.  And such a carbon tax could have legs, with the ability to spred to red and blue states around the union.

The question is not whether I-1631 will pass.    It won't.  Can you image folks taxing themselves to contribute to such a poorly designed and vague plan?  Will low-income people willingly tax themselves hundreds of dollars a year to support the vague goals of some environmental activists?  You know the answer.

The real question is what happens after I-1631 fails.  Will the environmental left that killed I-732 decide to drop their financial demands and join in a bipartisan effort to deal with carbon emissions without social engineering and giveaways to their constituencies?    We will see.  

Climate change forced by increasing greenhouse gases is too serious an issue to waste time and effort, which is exactly what 1631 will do.

________________________________________

Announcement:  The Northwest Weather Workshop is on April 27-28

The NW Weather Workshop is the big annual meeting for those interested in Northwest meteorology.  This year we will have a major session on the meteorology of NW wildfires and others on other aspects of our regional weather.  The gathering takes place at the NOAA facility in Seattle.  To view the agenda and to register, go to the meeting website.  The workshop is open to everyone, but registration is required.

Why are BOTH the Political Left and the Right Working Against Effective Action on Global Warming?

Both the political left and right in Washington State have been ineffective in dealing with future climate change.  

A good example:  the extremes of both sides are not supporting a revenue-neutral carbon tax, expressed by Initiative I-732.   

On one hand, there are left-leaning environmental and labor groups such as the Alliance for Jobs and Clean Energy, Climate Solutions, the Northwest Progressive Institute, the Machinist and SEIU unions.  And on the other, there are those on the right, such as the leadership of the WA Republican party.

Allies

Both are putting their political agendas ahead of rational decision making and the public good. Both are distorting or ignoring the science for their own agendas.  Both need to change their approach and work towards a rational, facts-based, strategy to deal with climate change.

Consider,  I-732, the revenue-neutral carbon tax facilitated by a grass-roots Washington State group, CarbonWashington (CarbonWA).  Led by economist Yoram Bauman, CarbonWa, an army of enthusiastic volunteers across the State collected over 360,000 signatures for the initiative, which is now before the Washington State Legislature (only 250,000 valid signatures are needed).   The initiative calls for a modest tax on carbon fuels, with ALL proceeds refunded by reducing the sales tax by 1%, removing the B&O tax, and funding a tax rebate for working families.  Revenue neutral.

This initiative is good policy in many ways. A carbon tax will encourage conservation without picking solutions.   Governments have a very bad track record in picking energy solutions, promoting expensive disasters such as biofuels and the now defunct Solyndra photovoltaic company.  Far better to allow free markets to make the decisions and investments.  Furthermore, the initiative will make Washington State taxes less regressive (and they are very regressive today).    A very similar tax was adopted with great success in British Columbia, resulting in less carbon usage and no negative economic impacts.

Importantly, the revenue-neutral carbon tax could be bipartisan, since it reflects the values on both sides of the aisle.  Republicans are not going to support a revenue-positive carbon tax or cap-and-trade alternative.

Groups and individuals from all sides of the political spectrum and major leaders of  the business community support the revenue-neutral carbon tax as an effective approach for slowing the growth of carbon in the atmosphere.  For example, at the recent AGU meeting, I heard world-class entrepreneur Elon Musk, CEO of Tesla and Space-X, and the originator of PayPal, suggest that a revenue-neutral carbon tax is a crucial part of the solution.

Todd Myers of the free market, Washington Policy Center, is a strong advocate of the I-732 revenue neutral carbon tax approach, as is Bill Finkbeiner, former Republican majority leader in the Washington State Senate.  Well known Democratic party leaders such as Mike McGinn, former Seattle mayor, Ron Sims, former King County Executive, and Peter Steinbrueck, former Seattle City councilmember support I732.  Major church groups such as the Washington State Unitarian Climate Justice effort believe I732 is a major advance.

The carbon tax is superior to cap and trade schemes, which have generally failed where they have been tried (such as in Europe), with plummeting carbon prices and the funds going for political pet projects.  The revenue-neutral carbon tax is simple, effective, and will not be gamed by politicians.  It is based on the proven economic principle of taxing what you don't want.  If the WA legislature passes it in their current session, our state will prove that reasonable, bipartisan action on climate change is possible;  it would be an example to the nation.

Unfortunately, here in Washington State, folks on the left and right are not supporting the carbon tax for their own partisan reasons.   On the right, there are influential state legislators like Senator Doug Erickson, chair of the Senate Energy committee, who opposes I732, doubts the validity of greenhouse gas warming, and who invites ill-informed "experts" (like Don Easterbrook) to testify to the legislature. Another major Republican figure, Senator Andy Hill, has not commented publicly on I732 but doubts the seriousness of human-induced climate change.  If you want to read something disturbing, take a look at a section of the platform of the WA State Republican party dealing with the environment:

"Climate change occurs naturally and warming from human generated greenhouse gases has yet to be proven. ... At present climate change science does not provide sufficient basis to formulate public policy."

This statement is false.  There is plenty of scientific basis to formulate public policy.

A number of Republican leaders are using three claims to support their inaction:

1.   The worldwide temperatures have not risen in the last decade (a.k.a., the pause or hiatus).   This proves nothing because scientists expect periods of little change occasionally due to natural variability.  In the end, increasing greenhouse gases will dominate.

2.  That many of the claims of environmental activists are exaggerated or wrong.    This is true, many of the claims of CURRENT impacts of greenhouse gas emissions are hyped or wrong (such as killing of baby oysters here in Washington State).  But the Republicans are missing the point.  The threat is not the impacts NOW, but the large impacts expected later in the century.  Those future impacts are what everyone should be worried about, including them.

3.  Washington State, with all its hydropower, is only a small part of the global greenhouse emission problem, why should we do anything?  The truth is any one area, state, or country is a small part of the problem.  But the big problem is really a lot of small problems that can only dealt with if everyone is part of the solution.

Republican leadership is missing in action regarding supporting I732 or dealing with future climate change.  They have developed a collection of invalid excuses for inaction (see above).   This is an example of leadership following from behind, since more and more Republicans are concerned about the future impacts of greenhouse gas warming. I know this because I have given talks on climate to mainly Republican groups, such to the Rotary Club and growers in Yakima, or the Association of Washington Businesses.  Ask growers about their concerns for future water resources or ranchers worried about wild fires. Republicans need to be part of the solution, not frittering away time doing nothing.

The left-leaning "environmental" groups are just as bad.  For example, a group that is opposing I732 is the Alliance for Clean Energy and Jobs, which doesn't like the carbon initiative because of its revenue neutrality--they want an initiative that will produce large amounts of revenue to be used for social programs.

The Alliance, which supposedly represents a lot of environment groups, unions, and social action efforts, wants a carbon-positive tax that would pump billions of dollars into their pet projects.  They are really into social action and using the money for minority and low-income groups, who they claim (without any proof) are somehow more affected by climate change.   I do not believe they are correct; climate change will affect everyone; we are all going to suffer from it.  From well-to-do farmers in eastern Washington and shellfish growers, to the ski industry, to those in big cities like Spokane impacted to smoke, to all of us who need hydropower.

I can't  understand why the Seattle Times and others give any credence to organizations like the Alliance.  It is led by an individual with a history as a Democratic political operative, with no background in environmental science or policy, and has funding from a left-leaning billionaire climate advocate (Tom Steyer).

I had a long conversation with a leader of Seattle's Climate Solutions--his group won't support I-732 because they want funds going to a variety of social programs.  I think this group needs a new name--they are part of the problem, not the solution.

Seattle's left leaning environmental community is long on symbolism, but short on doing anything meaningful to deal with climate change.   They are ready to jump on their kayaks for an ineffectual and meaningless protest regarding the Shell drilling platform.  But they are missing in action in dealing with the carbon waste of Seattle's gridlock traffic.  Uber liberal Seattle has completely inadequate bus service, does not maintain its bicycle paths, and  expanding its rail at a pace that can only be called glacial.   Environmental activists also love to fly all over the world (particularly for global warming meetings), which has a huge carbon input to the atmosphere.  And they are not supporting I-732.

Now, let them work on the region's gridlock

The Governor?   Although he is extraordinarily committed to dealing with climate change, he has not supported I732.  Instead he first pushed a revenue positive cap and trade proposal, which was not even supported by other Democrats.  Now he is proposing to go alone in capping carbon for major industries, a move that will enrage the Republicans.

So we have a problem.  Ineffective Democrats who prefer not to deal with real solutions regarding climate change but like to appeal to their base on social issues.  Republican leadership that have found all kinds of excuses to do nothing. Together they have produced a strange type of bipartisan environmental gridlock.

And then comes Yoram Bauman and the I-732 crowd who change the game. Against all expectations they secure the needed signatures.  An effective bipartisan approach to reducing carbon usage.  The "social justice" environmentalists in the Alliance and elsewhere then panic and try to buy I-732 off, offering nearly a million dollars if the I732 signatures are not handed in, leaving the field open to their replacement initiative, in which carbon taxes would be used for social programs.

Yoram Bauman:  Heroic Effort

Wisely, I-732 leadership declined this offer and submitted the signatures.
And now the issue is in the hands of the WA State Legislature.

Conventional wisdom is the I-732 will not pass, due to the issues noted above.  But I am not so sure.   If I-732 supporters (hundreds of thousands of them!) and rational moderates put pressure on the legislature, perhaps it can be passed during the next few months. But it will take a massive effort and heavy lobbying of our legislature.   But it may well be possible. The Republican party needs to understand that a revenue-neutral carbon tax is something they can and should support.  And if they sit on their hand, the alternative may well be less to their liking.  Democrats must accept that real progress depends on bipartisan action and a series of modest steps like I-732.  And that they shouldn't mix their social justice issues with climate change.

So my request:  contact your legislators and ask them to vote for I-732.

Let me end by noting that there are so many climate-related issues that Washington State Democrats and Republicans should agree that need attention:

1.  Fixing our degraded east-side forests
2.  Water conservation and building a robust water supply infrastructure
3.  Understanding the regional impacts of climate change.
4.  Positioning our state to be a leadership in energy technology
5.  Fixing our transportation grid-lock
6.  And yes, a revenue-neutral carbon tax.

We need mature, rational political leaders that can understand the effective bipartisan action is required and possible.

Why I-732, the Carbon Tax Initiative, is a Win for Everyone

It is not often that a measure comes before the public that is wise, bipartisan, environmentally progressive, and helps address income inequalities in our State.

A measure of such immense promise that it could have profound, and very positive, impacts both in Washington State and around the nation.

What am I am talking about?  Initiative I-732, the revenue-neutral carbon tax that will be put to Washington State voters in November.

The key idea is to tax something that we don't want (carbon emissions into the atmosphere),  using the money to make our State tax structure more fair and less regressive (mainly by reducing the State sales tax).

Why don't we want more carbon in the atmosphere?  Because it is clear that increasing CO2 will lead to a much warmer atmosphere and a number of environmental disruptions.

For all the talk about climate change, mankind is doing very little to stop global warming.

Don't believe me?   Here is a plot of CO2 concentrations in the atmosphere for the past half-century.   You see much progress?  I don't.  In fact, the growth rate of CO2 concentrations is increasing.  We need to do more.  Much more.

I-732 is patterned after the proven and highly successful carbon tax in British Columbia and will:

1.  Establish a 25 dollar per ton tax on carbon emissions associated with fossil fuels.
2.  Reduce the sales tax by a full percent.
3.  Provide a Working Families Tax Rebate to provide up to $1,500 a year for 460,000 low-income households
4.  Lower the Business & Occupation tax on manufacturing to 0.001 percent of gross receipts, effectively eliminating the tax.

I-732 is designed to be revenue neutral, so that the money collected by the carbon tax is used to reduce other taxes.   Government will not grow as a result.

I-732 is extraordinary good policy for a number of reasons:

1.   It taxes what we don't want, and lets the market decide on the best approach to reducing CO2 emissions.  Much more effective than government micromanaging the economy or deciding winner/losers.  Folks on both sides of the aisle support this approach.

2.  It will reform the Washington State tax structure, one of the most regressive in the nation (no income tax, high sales tax), making it less onerous for low-income folks.  

3.  It will essentially eliminate the Business and Occupation tax on manufactures, which is a real burden to small and upcoming businesses.

A Bipartisan Example for the Nation

 I-732 would be the first bipartisan effort in the nation for addressing global warming from fossil fuels through a carbon tax.

It would be an influential example to the nation, showing that all sides of the political spectrum can work together to address a major environmental threat.

Environmentally minded conservative folks like I-732 because it lets the free market decide on how to solve the problem, while not putting a net tax on society.    Government doesn't grow.  

Environmentally minded liberal folks like I-732 because it deals with carbon pollution, while making our tax system less regressive.    Everyone wins.

Democrats and Republicans, include a number of major regional politicians, support I-732, as do free-market thinkers like Todd Myers of the Washington Policy Center. Recently, environmental policy experts at the Sightline Institute concluded that  "I-732 would launch Washington to a position of global leadership on climate action."  

The list of supporters of I-732 is long and deep, including major local leaders such as Congressman Jim McDermott, Mike McGinn, Ron Sims, Republican State Senators such as Mark Miloscia and Steve Litzow, environmental groups such as the Audubon Society and the Olympic Climate Alliance. And many more.

The Opposition

Unfortunately, there are some folks, generally on the far right and left, that don't support I-732.  Hopefully, reflection and facts will change their minds.  Why are some folks against I-732?

Some on the conservative side of the political spectrum don't believe that global warming is a threat and that humans could not possibly have a significant impact on the global atmosphere.   Their conclusions are wrong and are contradicted by the best science.

"The concept of global warming was created by and for the Chinese in 

order to make U.S. manufacturing non-competitive"

Others worry about the impact on business, particularly heavy energy users. These include the Association of Washington Businesses, the Washington Truckers Association, some of the pulp and paper manufacturers, and a few farm groups.

These groups are mistaken. I-732 is BOTH pro-environment and pro-business. It offers predictability for energy costs, without government intervention. Economic analysis by Regional Economic Models, Inc. (REMI) found that by 2020 Washington, I-732 would stimulate a net increase of over 15,000 jobs, and an enhancement in WA annual GDP of over $500 million. The state Office of Financial Management also projects that I-732 will increase retail sales and other business activity.    I-732 essentially removes the B & O tax for manufacturers and there is  a 40-year phase for taxes on agricultural fuels.

In short, I-732 will be good for business.

There are those on the left side of the spectrum, who oppose I-732 because it is revenue neutral.   These folks have nothing against a carbon tax but they reject revenue neutrality.  They want to use the revenue from a carbon tax for government programs (such as supporting renewable energy efforts) and to assist low-income folks, who they believe are preferentially hit by climate change.

But there are problems with their approach.  Government has  a very poor track record in supporting winners and losers in the energy sector (consider the 500 million lost by supporting solar cell manufacturer Solyndra).    More seriously, removing revenue neutrality will undermine the ability of the measure to be bi-partisan (it would destroy support by Republicans and conservatives).

There is no way major progress can be made on reducing greenhouse gases in the U.S. without the support of both Democrats and Republicans.   Furthermore, there is little evidence that greenhouse gas warming is preferentially hurting low-income folks in WA State, and, in any case, I-732 will reduce the sales tax and provide a working families rebate that will greatly aid low-income individuals and families.

A major failure, costing half a billion dollars, that should not be repeated.

In short, the "progressive" and "left-leaning" folks opposed to I-732 should reconsider the issue and understand that I-732 supports their environmental and social agenda, while dealing with the issues of others on the political spectrum.
Groups that need to reconsider their opposition include some labor groups, social actions groups such as the "Alliance for Jobs and Energy" and the Sierra Club.   Governor Inslee, who says he is passionate about dealing with climate change, needs to get on board (the Democratic party is split on this issue).  They need to decide whether their top priority is to protect the environment or grow government.  They can't have both.

There are those who oppose I-732 because an initial analysis by the WA State Office of Financial Management concluded that the initiative would reduce state income by about $200 million a year.  This is a red herring.  First, this estimate is based on false assumptions and is incorrect.   But even if they were correct, this amount is nearly in the noise level (less than 1% of the state annual budget) and corrections could easily be made by the state legislature.

Finally, there are those who say "why bother"?   Washington State is only a small part of the problem, they suggest.  We are already fairly energy efficient because of massive hydro resources.  My answer to this (reasonable) question?

Everyone is a small part of the problem and thus everyone needs to act.  Only if everyone does their part (in reducing carbon emissions) can we make real progress in dealing with global warming.  This is related to the well-known concept of the tragedy of the commons.

Our effort will be an example to the nation and hopefully will stimulate progress towards a national carbon tax, which could have a MUCH larger impact.  And folks around the world look to the U.S. for leadership;  thus, our progress could have global impacts.

I-732 would represent a bipartisan effort, thus demonstrating that folks of all political beliefs can work together for critical environmental needs.  It has happened before (the bipartisan Clean Air Act of the 70s).  It could happen again.  The U.S. has proven time and again that we can do amazing things when we work together (like travel to the moon).

Read more here: http://www.theolympian.com/opinion/op-ed/article58570878.html#storylink=cpy

In summary,  I-732 is a chance for citizens of Washington State to make a meaningful step towards reducing carbon emissions, will make our State tax system fairer and less regressive, will foster business and economic activity, and will serve as a positive example to the nation of environmentally effective bipartisan action.

Announcement:  Climate Talk and I-732 Fund Raiser

On September 28, I will be giving talk  in Seattle on the Climate Surprise:  Unexpected Climate Impacts of Global Warming on the Pacific Northwest.  I will review the latest research and describe some  regional "climate surprises" that may well occur.   This talk will be sponsored by CarbonWa, the organization behind I-732, and will be a fundraiser for their efforts this fall.

To find out more or to secure tickets, please go here or  here (http://yeson732.org/uw/). There is both general admission seating ($20) and an opportunity to help further ($ 100, with a wine and cheese reception before).  Of course, even bigger donations would be very welcome and helpful.

Will the Naive Left and the Self-Interested Kill the Most Significant Environmental Advance in Years?

The Sierra Club should be embarrassed.
The Washington Environmental Council should be embarrassed.
Seattle's Climate Solutions should be embarrassed
Global warming warrior Bill McKibben should be embarrassed
The Alliance For Jobs and Clean Energy should be embarrassed
Fuse Washington  and Puget Sound Sage should be embarrassed
The Association of Washington Businesses should be embarrassed
Nucor Steel, Kaiser Aluminum, Northwest Pulp and Paper, and the Avista Corporation should be embarrassed.
The Washington State Labor Council should be embarrassed.

These groups are putting their political agendas and perceived financial interests ahead of the general good.

For self-interested reasons they are ready to kill one of the most important environmental advances in years.

For self-interested reasons they want to destroy the chance to greatly improve the most regressive state tax system in nation.

Specifically, they are working against I-732, the Washington State carbon tax swap that will be on the ballot this November.   And they have nothing to offer to replace it.

I-732 is one of those wise, revolutionary ideas that come along all too rarely.  It starts with the most effective approach to reducing the use of carbon and one that uses the power of the free market:  a carbon tax.

But it doesn't use the money to grow the size of government.  Rather it gives the money back to the people and industry through reducing the sales tax by 1%, removing the B&O tax on manufacturers, and providing a tax credit to working low income people.  A carbon tax swap.   And it makes Washington State tax system less regressive.  Let me shown you.

This graph shows you the percentage of income spent on taxes for a married family with two children for various income groups.   Without I-732 (blue), Washington State has a highly regressive tax system with low-income folks (below $21K) spending nearly 17% of their income on taxes.  For those earning $21,000-$ 40,000 about 12%.   But if I-732 becomes law, we move to the yellow bars--much better and far less regressive.  I-732 would be the biggest boon to low income Washington State families in decades.

The most important and far reaching environmental advances in the U.S. have always been bipartisan.  Laws like the the Clean Air Act, the Clean Water Act, the establishment of the Environmental Protection Agency, to name only a few.  In a country where no party is dominant for long, only bipartisan efforts have the staying power required to deal with environmental pollution and the protection of our State and planet.   I-732 has extraordinary bipartisan support with groups ranging from the Audubon Society and Democrats from many of our States' districts to Republican State legislators (such as Senators Steve Litzow, Joe Fein, among others), major business leaders such as Howard Behar of Starbucks, and hundreds of other organizations and groups (a partial list is here).

It quite probable that the vote is going to be close and the opponents noted above could make a critical difference.  So why are they opposing I-732?

First, there are those I call the naive-left.  These are folks that support the carbon tax, but don't like revenue neutrality--they want government to get the money and use it for climate justice and governmental energy programs.  They claim that I-732 is financially regressive and will still steal money from the state general fund.   They also claim that poor folks will be hit harder than rich folks form global warming and thus deserve special support.

Perhaps these folks mean well, but they are clearly mistaken on every count:

1.   A revenue positive carbon tax would lose support by moderates and many Republicans.   It would kill any chance of passage.
2.  I-732 will REDUCE the regressivity of the WA State tax structure.  In a revenue-positive plan, money will be taken away from poor folks (via a carbon tax) and not returned to them.  Thus, their plan would make the tax situation more regressive.
3.   I-732 is very, very close to being revenue neutral and estimates that found otherwise are in error.  The respected Sightline Institute set the record straight on this, as does the I-732 website.
4.  Government has proven itself inferior to the market in making energy decisions.  The 500 million Solyndra disaster is a good example of this.

5.  As shown in one of my previous blogs, the idea that poor people in our state will be hit harder by global warming is an easily disproven urban myth.

The Sierra Club, supposedly an organization that has environmental concerns front and center is not supporting I-732 because:

Communities of color and low-income people are almost always the ones most impacted by pollution and climate change, and as a result they need to be at the front and center of discussions for how to address the problem and mitigate the impacts of both climate change and environmental policy. That wasn't the approach taken by I-732

In truth, the Sierra Club's position is not only based on incorrect assumptions, but its actions directly harm the folks it claims to be most concerned about. I-732 will dramatically reduce taxes on low-income people and contribute to reducing carbon pollution. Several Sierra Club members have emailed me expressing their disgust with their organization's position...they plan to support I-732.  Perhaps they should support a different organization.

Bill McKibben and his 350.0rg group were strong supporters of I-732.  But then they changed their mind?  Why?  Here is what they said.

Our reason, above all, is that we want to support our allies in people-of-color-led climate justice groups that represent those on the frontlines of climate change. 

And "environmental organizations" like Climate Solutions might change their name to Climate Inaction.  "Climate Justice" has taken over some of the region's environmental action groups and they are willing to destroy any potential for progress for ideology, an ideology that has the most tenuous relationship with truth.  Perhaps the most destructive aspect of these groups is that they make dealing with climate change  a "we" versus "they" affair, with "we" being more seriously affected and deserving of public funds.  In truth, EVERYONE will be affected by climate change and EVERYONE must work on solutions.   They don't seem to understand this.

And then there are the self-interested.  Groups like the Association of Washington Businesses and major energy users (like Nucor Steel) are opposing I-732 because it will raise the price of carbon.   I-732 does displace some of the cost (by eliminating the B& O tax on manufactures and reducing sales tax).  The idea is that an increased cost of carbon will encourage these companies to reduce their carbon footprint by increasing efficiency, taking advantage of renewable energy, or other means.

But these companies don't want the hassle or to change the way they do business.  They want cheap energy.  And they clearly are not very concerned about the impacts of carbon pollution.  Some are even denying the global warming is a concern.

So in short, there is alliance between left-leaning, climate justice folks who want big government and funds directed to specific groups, and right-leaning energy-intensive industrialists who don't want to deal with global warming.  An unholy alliance if there every was one.  They even have a joint website.

The big question is whether the rational middle will be large enough to pass I-732.  Folks who want our state to deal with increasing greenhouse gases.  Folks that understand global warming is a threat that must be dealt with.  Folks who understand the importance of making our tax structure less regressive.  Folks who look beyond their own self interest and pocket book. And folks that understand that a bipartisan carbon tax swap could be an example that could stir the rest of the nation.

Want to help?  Check out the Yes on the I-732 website.  Help makes calls or doorbell. Contribute.  Or come to my talk on Sept 28th, a fundraiser for I-732 (see below).

________________________

My talk on Northwest Climate Surprises on September 28. 

During the evening of September 28, I will be giving a talk in Seattle at the Mountaineers in NE Seattle on Climate Surprises: Unexpected Impacts of Global Warming on the Pacific Northwest. 

You think global warming will simply bring warmer temperatures, drought, less snow, and more storms? 

Think again. The latest climate model simulations provide a far more nuanced prediction of what will happen here, with some of the predictions being quite surprising. This talk is sponsored by CarbonWa and the Audubon Society. To find out more or to secure tickets, please go here.

"The Nader Moment" for Washington State Environmentalists

In 2000, George W. Bush became President of the United States because of the candidacy of Ralph Nader, who pulled enough votes from Gore so that he barely lost Florida (by about 600 votes) and thus the election.

Many of those who supported Ralph Nader were left-leaning Democrats who felt Gore was too centrist for their tastes.  They knew the risk of supporting Nader, but didn't care--they stuck to their principles, resulting in a President with views opposite to their basic values.  During the next few years, the U.S. became engaged in a pointless and unnecessary war, basic liberties were limited, and conservative supreme court justices were appointed, to name only a few effects of the Bush presidency.  For these Democrats, ideology was more important than pragmatics, with the end product being a disaster for the nation.

And it is about to happen again.  Today, many left-leaning Washington State Democrats and their allies are determined to have their own "Nader Moment", rejecting the good for the perfect and undermining a major advance in reducing greenhouse gas emissions in the State.

What am I talking about?  

The vote on Washington State initiative I-732, which would bring a revenue-neutral carbon tax to Washington State-- an approach that would use the free market to reduce carbon emissions in our state while reducing the sales tax by 1%, thus making the state tax system less regressive.  And it even provides a tax rebate for low-income working families to neutralize the impacts of the carbon tax.

As noted on the Yes-on-I732 website, I-732 is bipartisan effort, with support from both sides of the aisle.  If passed, it would represent an example to the nation of how the entire political spectrum can work together to reduce greenhouse gas emissions.  A similar approach has worked well in British Columbia:  greatly reducing carbon usage with no negative impacts on the economy. And it makes our tax system less regressive.  Enlightened, pragmatic policy.

But now the problem.   A group of  self-described environmental groups are not supporting I-732 because they oppose revenue neutrality, whereby all taxes are returned to taxpayer.  They are happy enough with a tax on carbon emissions, but they want WA State government to control the revenue, using it for environmental programs and to promote "climate justice".   They claim that Washington State minorities and low-income folks are preferentially penalized by global warming, an assumption that has little basis in truth.   Thus, they want divert funds to "community-directed investment"...whatever that means.

So environmental groups like the Sierra Club, the Washington Environmental Council, and Seattle's Climate Solutions are not supporting I-732.  A variety of activist  and "progressive" groups like the Alliance for Jobs and Clean Energy are opposing it for the same reasons.  So are some labor unions.  They demand that carbon tax revenue be used for larger government and more "social justice" programs, and they are willing to kill I-732 if it doesn't meet their social action requirements.  The rapid rising levels of CO2 in the atmosphere does not appear to be their priority.

Just as disturbing, Governor Inslee, whose administration claims that addressing global warming is a priority, is sitting on the sidelines, providing no support for I-732. Most of his climate initiatives have not been successful, including his proposed fee on carbon emissions.

Governor Inslee has a real chance to lead by supporting I732 and do something important, but will he?

Opposition with no real plan

The left-leaning opponents of I-732 have no plan for moving forward with a carbon tax.  For years they have had to opportunity to do so, but have done nothing.   And even if they tried, a carbon tax that is not revenue neutral would be dead on arrival, since it would be opposed by most Republicans and even some moderate Democrats.

So these folks in the opposition are pushing for an approach that will never become law, while holding back support for an alternative (I-732) that both has a chance and which could provide a powerful tool for reducing greenhouse gas use in our State. They are willing to destroy the good for the perfect, because it does not mesh with their political vision.  Thus, they are part of the problem and not the solution.

It is ironic that some of the most most liberal folks in the State are allies with some of the most conservative, such as the Association of Washington Businesses (who is sponsoring the No on I732 campaign).  Or the more conservative members of the Republican party who still reject the overwhelming scientific evidence of a growing threat.   They are even aligned with a very prominent Presidential candidate, who explicitly opposes carbon taxes and who believe global warming is a hoax (see below).   As they say, politics makes strange bed fellows.

Opposes a carbon tax

There is still time

There is still time for the "progressives" and social justice activists to rethink their positions and to avoid their "Nader Moment."  Sill time for sober and logical consideration of what is possible and good.  Still time to support I-732 and encourage their members to do the same.  Still time for Governor Inslee and his allies to show that Washington State can lead the nation regarding an unfolding environmental crisis in a bipartisan and pragmatic way.  Still time to understand that the key issue is the amount of CO2 in the atmosphere and not the size of government.  Extremists on both the left and right need to stop making this issue a political tool and deal with a growing crisis for our planet.

Most people in our State understand the threat of global warming from greenhouse gas increases.  But many feel powerless, frustrated, and unhappy about the inability of our political leadership and environmental groups to work together in an effective and pragmatic way.  I-732 represents a realistic, bipartisan, proven approach.  It would be a tragedy for all of us if it failed. And a double tragedy for environmental groups who would soon realize they helped kill an historical opportunity for effective action on climate change.

Announcement: Talk on Northwest Climate Surprises on September 28.

During the evening of September 28, I will be giving a talk in Seattle at UW's Kane Hall on Climate Surprise: Unexpected Impacts of Global Warming on the Pacific Northwest. You think global warming will simply bring warmer temperatures, drought, less snow, and more storms? Think again. The latest climate model simulations provide a far more nuanced prediction of what will happen here, with some of the results quite surprising. This talk is sponsored by CarbonWa and the Audubon Society To find out more or to secure tickets, please go here.