A landmark vote in Washington state could see the country’s first tax on carbon emissions become law in November.
While advocates hope it’s the first in a nationwide wave of similar initiatives to combat climate change, opponents — including Democrats — say the plan could cripple the state’s economy.
Initiative 732, which will be a ballot measure, would phase in a $25-per-metric-ton tax on carbon emissions over two years while dropping the state’s sales tax 1 percent, repeal a business tax and partially fund a tax rebate for low-income families. Those proposals put together would make the new carbon tax revenue neutral, proponents say.
However, the state’s Department of Revenue estimates it could reduce state revenue by about $915 million by 2021. And opponents say, while well intentioned, the carbon tax could cripple Washington’s ability to govern.
Joe Ryan, co-chairman of Carbon Washington, the group pushing the carbon tax, said the state’s calculations are incorrect based on what he says is a misinterpretation of state law, some mistaken calculations and misleading assumptions of how utility companies will choose to generate power.
Ryan said the initiative will give Washington voters a chance to decide if they want to take real action on climate change, which he considers “a moral imperative.” If the tax passes, he’s hoping the state will light the way for other carbon taxes in other states.
“There’s a phenomenon where ballot measures pass in a few states and it snowballs and creates political momentum,” he said.
The initiative is going to the voters because the Washington legislature did not take up the issue during the last legislative session. Proponents believed the initiative had a better chance as a voter referendum than with lawmakers.
The tax would take effect in 2017. In the first year, carbon would be taxed at $15 per metric ton and that would increase to $25 per metric ton in the second year.
Anticipating a drop in carbon emissions of 2 percent per year, the tax would rise 2.5 percent plus inflation per year until it reached its cap of $100 per metric ton per year in 2016 dollars. The campaign estimates it would take 40 years to reach that level.
The carbon tax will increase the cost of coal-generated electricity for utilities by about 2.5 cents per kilowatt hour, and could increase the price of gasoline by 25 cents per gallon for consumers. The tax on emissions from farm diesel fuel and public transportation will be phased in over 40 years. Many scientists believe that carbon dioxide and other greenhouse gas emissions are driving manmade climate change.
Estimates from the campaign show the carbon tax would bring in $1.7 billion per year in 2018, its second year.
That would be offset by reducing the sales tax 1 percent. Washington’s sales tax is currently 6.5 percent, and dropping it to 5.5 percent would save taxpayers an estimated $1.3 billion per year, according to the campaign.
The proposal also includes funding the state’s Working Families tax rebate for the first time at a 25 percent level, providing a rebate of $200 million. Finally, eliminating the Business and Occupations Tax on businesses would save an additional $300 million, according to the campaign.
But, those numbers are flimsy at best, says Jeff Johnson, president of the Washington State Labor Council.
Johnson emphasized that the labor movement supports plans to tax carbon and combat climate change, but said the measure proposed by Ryan and his campaign is not right for the state.
He said he believes the state estimates that show the plan would cost the state money that it can’t afford to lose. The “naive” plan could eat away at funding for schools, mental health services, healthcare, public safety, infrastructure, home care, parks and many other parts of state government, he said.
“It would be devastating to many, many people in our state,” he said.
The plan also could hurt businesses because there is no compliance flexibility built into the proposal and there is no plan to help transition the economy from being based on fossil fuels to renewable energy, Johnson said.
That could lead to thousands of jobs being lost. Without any sort of unemployment insurance, retraining programs or counseling, blue-collar workers in Washington could be tossed into a tailspin, he said.
Those issues are leading Johnson and other liberals in Washington, including the state Democratic Party, to campaign against the proposal.
Ryan said a recent poll showed public opinion is evenly divided on the proposal, with 48 percent of those polled in favor and 47 percent against.
Both Ryan and Johnson expressed confidence their side would win if they made their case to voters. They agreed on one other point as well: Regardless of how Initiative 732 does at the ballot box, it’s only one step in what needs to be a nationwide action on climate change.
“We have a moral responsibility to future generations to leave the planet a clean and healthy place for our children and our grandchildren,” Ryan said.
