THE political divide about climate change has begun to resemble the trench warfare of World War I: pointless and interminable.
On one side are environmental activists, mostly Democrats, who have appropriately sounded the alarm about the threat of global warming. Many Republicans, on the opposite side, are worried that climate policy is a threat to the economy and to their vision of small government.
Facing what seems like intransigent opposition, each side has dug in. The latest salvo, from Gov. Jay Inslee, is a cap-and-trade system that would generate new revenue and significantly reduce carbon emissions.
It doesn’t have to be this way. Between the trenches there actually is a remarkable consensus about what is happening and what we should do about it.
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That consensus includes more than 100 years of work by climate scientists, essentially all of whom agree that human activity — principally carbon dioxide emissions from burning fossil fuels — is warming the Earth. And that consensus is backed by the work of economists, who almost universally agree that the best solution is tax reform with an environmental twist: higher taxes on “bads” like carbon emissions combined with lower taxes on “goods” like income and employment.
Just such a policy — a revenue-neutral carbon tax — has been in place in British Columbia since 2008. Income tax rates were cut, carbon emissions have fallen and the economy is doing great. To quote a headline in The Economist magazine: “We have a winner.”
The time has come to bring this winning policy to Washington state. In March, our group intends to file a ballot measure to put a revenue-neutral carbon tax before the state Legislature and, if legislators choose to stay in their trenches, on the November 2016 ballot.
Our policy is simple and transparent. In fact, our team has worked with University of Washington computer scientists on a Carbon Tax Swap Calculator that will easily allow you to evaluate the effects of our proposal on your own household. If policy details leave you shellshocked, just try out the calculator tool linked from www.carbonWA.org. Odds are that you’ll pay a few hundred dollars a year more for fossil fuels and a few hundred dollars a year less for everything else.
For those who like policy details, let’s begin with the obvious: Our carbon tax would make fossil fuels more expensive. The carbon tax would phase in to a rate of $25 per ton of CO2 (a bit less than the $30 rate in B.C.) and then increase slowly over time to maintain revenue neutrality and incentivize additional emissions reductions. For context, $25 per ton of CO2 is roughly equal to 25 cents per gallon of gasoline at the pump or 2.5 cents per kilowatt hour of coal-fired power.
The resulting revenue would be “recycled” into offsetting tax reductions. About 75 percent would go toward a 1 percent reduction in the state sales tax that would benefit households and businesses across the state (a household making $45,000 a year is likely to save almost $200 annually). Our proposal also would fund the Working Families Tax Rebate for low-income households and effectively eliminate the B&O tax for manufacturing. Additional details are on our website, including draft legislation and letters of support signed by dozens of economists and by organizations like Citizens Climate Lobby, whose chapters around the state advocate for a similar “fee-and-dividend” policy at the national level.
Entrenched interests will of course resist, claiming (on one side) that our policy doesn’t do enough or (on the other) that “the government” can’t be trusted to maintain revenue neutrality. In truth, however, we are the government. By working with each other and in concert with B.C., we in Washington state can inspire bipartisan action in the rest of North America and around the world.
Yoram Bauman and Joe Ryan are executive committee members of the Carbon Washington campaign.