Climate change is real and demands a strong response, but the carbon-tax Initiative 732 is the wrong approach.
CLIMATE change is real and demands a strong response from government.
Even so, voters should reject a new carbon-tax scheme on November’s ballot: Initiative 732.
I-732 would create a significant hole in the state budget — and the budget of working-class Washingtonians — and provide questionable environmental benefits.
Residents should be proud that quite a bit is already being done about climate change in our state.
Gov. Jay Inslee’s clean-air rule, released in June targeting industrial polluters, will reduce carbon emissions by an average 1.7 percent a year.
Vehicle-emissions rules are also helping. Greenhouse-gas emissions from vehicles on Interstate 5 from Everett to Federal Way fell 2 percent between 2011 and 2014, despite increased traffic congestion.
Overall greenhouse-gas emissions in Washington declined 6.5 percent from 2008 to 2014, according to the state’s most recent reporting. That’s happening without a carbon tax, in part because of regulatory changes.
More sweeping changes are expected at the federal level.
Presidential candidate Hillary Clinton has promised an aggressive climate-change response via executive actions that won’t need to go through Congress. Using a mix of pollution standards, clean-energy investments and conservation, she believes greenhouse-gas emissions can be reduced by 30 percent by 2025 and 80 percent by 2050.
Supporting such changes is more reasonable and effective than subjecting Washington residents to a risky, multibillion-dollar experiment in carbon taxation.
Although I-732 is billed as “revenue neutral,” the state Office of Financial Management estimates it would decrease general-fund revenue by $797 million over the next six years. The initiative’s author, Seattle economist Yoram Bauman, disputes this interpretation.
Setting aside their argument, I-732 poses a risk to state finances at a critical moment. Lawmakers are overhauling the state’s tax system to fully fund basic education, mental health and other pressing needs. I-732 would cut taxes for corporations and others, adding significant complexity to a task that’s hard enough.
Also of concern is the financial burden a carbon tax would place on residents.
The escalating tax is designed to pressure people to drive less and use fewer fossil fuels. That may sound reasonable in Seattle, where transit options abound, clean hydropower provides energy and many can afford higher fuel costs.
But most Washingtonians don’t have such options.
To minimize the tax’s economic harm, the initiative tinkers with state tax policy, cutting taxes on manufacturing, reducing sales taxes by 1 percent and funding tax rebates to a small segment of the state’s population.
Only Washington’s poorest could get the rebate, which the state estimates would benefit fewer than 10 percent of residents. Bauman argues that the number of recipients is higher.
The sales-tax cut intended to offset everyone’s carbon-tax burden is fixed at 1 percent. Yet the carbon tax annually increases 3.5 percent plus inflation.
Middle-class residents would see no rebate, only a tax on energy growing around 5 percent a year. Energy is already a top household expense, and most don’t have options for driving less and significantly cutting energy needed to heat homes and cook food.
And legislators might be tempted to divert carbon-tax revenues to fill budget holes. That would erode rebates and tax cuts that are supposed to make the tax less painful.
Carbon-reduction outcomes are a bigger question mark.
The initiative is modeled on a carbon tax British Columbia created in 2008 that’s been hailed by carbon-tax supporters. But they misread or misconstrue its effect on emissions.
Emissions in B.C. have increased in recent years, suggesting the tax doesn’t work as promised. To gauge effectiveness, look at emissions since the recession ended and the first full year the tax was in place: in 2009. Since then, emissions in the province steadily increased. Over the last three years for which data are available, B.C. greenhouse-gas emissions increased 2.7 percent.
Emissions from transportation — the largest target of I-732 — increased 10.7 percent over the last three years in B.C. despite its carbon tax and increases in the efficiency of cars.
So it’s unclear a carbon tax would help. Yet it would hurt state and personal budgets.
To tackle climate change and avoid tangling state tax reforms needed for education in 2017, voters should say no to I-732 — and yes to Hillary Clinton.