Environmentalists Argue 'We Can Do Better' Than Washington Carbon Tax

An unprecedented ballot measure to levy a carbon tax against polluters in Washington State appears tailor-made for environmentalists who have fought for such a tax for decades, yet prominent progressive voices such as author and activist Naomi Klein and leftist state senator Pramila Jayapal are publicly lobbying against it--even as climate scientists (including former NASA scientist James Hansen) advocate for it.

"I'm convinced it's worth fighting for better."
--Naomi KleinThe unexpected revolt from some prominent climate hawks is partly because the tax in question is designed to be revenue-neutral, which means that taxes in other sectors (such as the sales tax) will be slashed in order to accommodate it, and thus no additional revenue will be added to the state's coffers.

Opponents say that those extra funds are necessary to fund a real transition to a green economy.

Even Washington's chapter of the Sierra Club issued a statement against the proposal, arguing that Initiative 732 "fails to affirmatively address any of the stated needs" of communities of color and low-income people, that is, "more investment in green jobs, energy efficiency, transit, housing, and renewable energy infrastructure."

The measure would levy a tax of $25 per metric ton of carbon emissions in 2018, and eventually ramp up to $100 per metric ton over 40 years. It would reduce the state sales tax by a single percentage point, and fund the state's Working Families Tax Rebate.

While proponents argue the end-effect will be revenue neutrality, "[t]here remains justifiable concern about I-732's revenue projections," the Washington Sierra Club chapter added:

While I-732 was intended to be revenue neutral, the State Department of Revenue predicts I-732 will result in about $200 million of lost revenue per year in its first four years. A subsequent analysis by Sightline Institute, a respected environmental think tank, found flaws in the state forecast but still estimated a nearly $80 million annual revenue loss over the same time period. At a time when our state needs additional revenue to fund education, parks, environmental programs, and social services, we are concerned about any projected revenue cuts.

The Washington State Democratic Party, Washington Environmental Council, the state chapter of the AFL-CIO, and climate activist Van Jones have also all voiced their opposition to the measure.

As for Klein, the climate activist has long critiqued the concept of a revenue-neutral carbon tax, arguing that it borrows from Koch brothers-esque thinking about taxation.

In fact, I-732's revenue neutrality was purposefully designed to appeal to conservatives.

That appeal was echoed by former Energy Secretary Steven Chu, when he argued: "revenue-neutral carbon tax like the I-732 proposal in Washington State is the right way to tackle climate change in a way that's fair to American households, and that works for American businesses."

In a conversation with Moyers & Company's Michael Winship earlier this year, however, Klein argued that revenue neutrality "leaves the government with nothing":

"'Revenue-neutral' carbon pricing was a scheme built for 1986 when we could cross our fingers and hope a slowly rising price for carbon would transition our economy off fossil fuels. But in 2016 we have years, not decades."
--Jill Mangaliman, Got Green

I know there are people here who are working on a carbon tax. And it's great but often you'll hear people say, "Well, it has to be revenue-neutral. It has to be fee and dividend. Don't call it a tax." Because we accept the Koch framework as a premise that if we're going to take money from people we have to give it all back, all of it. That's what fee and dividend means, it means we will tax you and we'll give you the exact same amount back that you gave us. That leaves the government with nothing. So what are you going to use to pay for transit? What are you going to use to pay for a renewable energy grid? How are you going to get to 100 percent renewables? We have to talk about the fact that we need more money. It has come from somewhere.

Indeed, a local climate activist also argued in a recent op-ed that "'[r]evenue-neutral' carbon pricing was a scheme built for 1986 when we could cross our fingers and hope a slowly rising price for carbon would transition our economy off fossil fuels. But in 2016 we have years, not decades, before we've maxed out our global carbon budget to stay below a 1.5 or 2 degrees Celsius rise in temperature. I-732 would contribute virtually nothing to Washington's share."

As the November election approaches, Klein wrote on Twitter that British Columbia "has a carbon tax like the one being proposed [in Washington] and emissions are still going up. I'm convinced it's worth fighting for better."

.@AlexSteffen Wa has an amazing climate justice movement and a progressive tradition - it's a realistic place to win a better precedent.

-- Naomi Klein (@NaomiAKlein) November 3, 2016

Supporters of the measure, however, counter such criticism by arguing that the reduction of the state's sales tax--a so-called "regressive tax" that affects poor people disproportionately--would help Washington's low-income communities.

"I-732 will ensure that those most impacted will receive the most financial relief," wrote climate scientist Richard Gammon in YES! Magazine. "It makes the money polluters pay to lower the state sales tax a full percentage point, which benefits everyone. It lowers some business taxes to keep jobs in the state, and it invests $1 billion over the first six years in direct checks of up to $1,500 annually to 460,000 low-income working families through a 25 percent match of the federal Earned Income Tax Credit."

Proponents have also argued that the revenue-neutral carbon tax is business-friendly, meaning the initiative will pass more easily--and that the current measure is better than nothing, as the urgency of the climate crisis only grows. (Although there is one industry that is battling the initiative: coal.)

"Global warming is such an immediate threat that it needs the forceful mechanism of a clear, continuously reducing cap that will, without the unpredictability, political vulnerability, and extra cost of a tax program, chop carbon emissions at a quick and predictable pace," argued a former Interior Department official in a letter to the editor in the New York Times.

The unusual battle over what would be the nation's first carbon tax, which has the fossil fuel industry on the same side as some of North America's most prominent climate activists, has perhaps been overshadowed by the pitched and often ugly presidential election. Yet those wondering about the future of climate legislation in the country are watching the fight closely, and it remains to be seen what the outcome will be as the most recent polls show the opposition with a slim lead and about a third of respondents undecided.

As Gregg Small of the Washington-based Climate Solutions toldGrist: "Carbon pricing is incredibly difficult and maybe impossible if people don't come together. Other states will face similar types of dynamics here on the policy and strategy. I hope people learn from the painful lesson we have in Washington to, you know, work it out."