Nation’s First Carbon Tax on Washington Ballot

No state in this country has a tax on carbon emissions. That might change in November if Washington state voters approve Initiative 732, a ballot measure that would establish a carbon emission tax on certain fossil fuels, reduce the state sales tax by one percentage point, increase a low-income exemption and reduce certain manufacturing taxes.

While proponents of this initiative outnumber opponents five to one, strong opposition came from an unlikely source. The Sierra Club and the Washington Environmental Council—two of the state’s foremost environmental advocacy groups—believe the initiative takes the wrong approach and will damage state revenue. Governor Jay Inslee’s proposal last year to cap emissions and fine heavy carbon polluters would have raised money for education, clean energy, transportation and programs to support vulnerable communities affected by climate change, according to critics.

Wes Lauer, civil and environmental engineering professor, plans on voting “Yes” for I-732. He believes it will create an incentive for businesses to develop technologies that don’t use fossil fuels.

“Global climate change is primarily influenced by the use of fossil fuels,” he said. “Right now we don’t have a price on carbon at all, so putting a price on carbon is one of the most important things that can be done.”

Some members of the Sierra Club believe the initiative doesn’t represent an equitable climate policy while other members are working tirelessly to see it passed. The club is officially taking a position against the measure because communities of color and low-income people aren’t at the forefront of the discussion to mitigate the impact of climate change and policy, and because of concerns about I-732’s revenue projections.

Lauer believes a price on carbon is one of the only ways to mitigate the effects of climate change, and that this initiative is only a starting point.

“You have to set a framework in place, and then you can modify that framework over time,” he said.

Carbon Washington, the organization leading the campaign in support of the carbon tax, has helped raise more than $1.2 million in contributions as of Oct. 5 this year. Groups opposing the tax have raised over $300,000. Polls indicate that support and opposition is roughly the same, despite big differences in funding, with 38 percent voting “Yes” and 37 voting “No”, while 25 percent remain undecided.

The carbon tax—modeled after a similar tax in British Columbia passed in 2008—would start at $15 per metric ton of emissions in July 2017, go up to $25 the next year, then 3.5 percent plus inflation each year until it reaches $100 per metric ton. The tax would be implemented more gradually for farmers and nonprofit transportation providers, according to Ballotpedia.com.

Economics professor Gareth Green also plans on voting “Yes” for I-732 because it reduces taxes on things we like and raises taxes on things we don’t. He believes the Sierra Club is going to have a hard time passing what they consider a “perfect” carbon tax.

“If you start with a policy that has a dramatic change, it’s harder to get passed. We should start with a policy that’s less stringent,” he said. “It’s important that we do something.”

According to the fiscal impact statement, during the first six fiscal years, state General Fund revenue would decrease by $797.2 million as a direct result of the carbon tax. Sales tax revenue for the state Performance Audits of Government Account decreased by $8.9 million. Local tax revenue would increase by $156.1 million and state expenditures would increase by $37.4 million.

The tax, by offsetting other sources of revenue like the sales tax, would be revenue-neutral so that taxpayers don’t pay more than they do now. State sales tax would be lowered from 6.5 to 5.5 percent, the Working Families Tax Credit for low-income families would increase and business and occupation tax rates would decrease from 0.484 to 0.001 percent. These changes would maintain the state revenue as it was and incentivize families to reduce fossil fuel consumption and greenhouse gas emissions.

Despite his support for the initiative, Green insisted that it’s not enough in the grand scheme of things.

“This is not going to solve climate change,” he said. “If we pass this and think we’ve done our bit,
we’re fooling ourselves.”

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