Carbon tax vote in Washington State could be pivotal event

As with B.C.'s carbon tax, the tax in Washington State would be revenue-neutral

By the time you read this, our neighbours to the south will have voted on Tuesday in what could prove to be a pivotal election in world history.

No, I’m not referring to the U.S. presidential election, although that could prove to be important too. I’m referring to the referendum held on whether to bring a carbon tax to Washington State.

Initiative 732 is unique in that it was opposed not just by the usual suspects such as the Koch brothers and the climate-denial wing of the Republican Party, but also by the Washington State Labor Council and several prominent environmental groups such as the Sierra Club.

The initiative was the brainchild of Yoram Bauman, the self-described “stand-up economist.” His Youtube video, “Mankiw’s 10 Principles of Economics, Translated” is really quite funny and has received over one million views.

Bauman, along with many other economists, believes that the best way to control the carbon dioxide emissions that are causing global warming would be through charging a fee on fossil fuels – in other words, a carbon tax.

He drew his inspiration from B.C.’s carbon tax, which has decreased fossil fuel use in this province by 16 per cent while maintaining some of the best economic growth in Canada.

Citizens of Washington State are able to initiate legislation through gathering enough names on a petition.

Bauman helped to found a group called CarbonWA, which in turn organized to collect 360,000 signatures – about five per cent of the state’s population.

The proposed carbon tax would start at $15 per tonne carbon dioxide (compared to B.C.’s $30 per tonne) and rise annually to $100 per tonne.

As with B.C.’s carbon tax, the tax in Washington State would be revenue-neutral.

Most of the money collected would be used to reduce Washington’s sales tax by one per cent, from 6.5 per cent to 5.5 per cent.

It would reduce the state’s Business and Occupation Tax (which most economists agree is a job-killer) to .001 per cent.

It would also expand the state’s earned-income tax credit for low-income households.

The opposition from the fossil fuel industry and its paid supporters was easy to understand. They could lose billions of dollars if this idea spreads.

Less easy to understand was the opposition from the Alliance for Jobs and Clean Energy, a coalition of Washington state environmental groups, social justice groups, labor groups, advocacy groups for communities of color, and Washington chapters of national environmental groups.

They said Initiative 732 didn’t do enough to reduce fossil fuel use, that it would not protect the poor and that not enough money was set aside to support alternatives.

Unfortunately, the alternative proposed by the Alliance was a confusing mix of policies that likely would be far less effective than the original Initiative.

There are, at present, no carbon taxes in the United States, the world’s number two emitter of carbon dioxide. Initiative 732 shows how such taxes can be implemented – by going around the deadlocked political parties and appealing directly to the people.

 

Let us hope that Initiative 732 passed.