Debate On Carbon Tax Initiative Gets Heated

Panelists of Climate Presentations at Evergreen Argue Over Initiative 732

By Devon Merriman

On January 13, Evergreen students crammed into every square inch of the longhouse to attend “It’s Happening, What Now?”, a series of presentations on climate change in Washington State.

Initiative 732 surfaced during the discussion, prompting a disagreement among panelists and climate change activists Yoram Bauman and Jeffrey G. Johnson.

I-732 is a carbon tax that is now in front of the legislature. If lawmakers reject the measure, it will move to the November ballot for 2016. The idea behind a carbon tax is to make polluting expensive so as to promote conservation and discourage the use of fossil fuels.

“That’s what I, as an economist, love about capitalism,” Bauman said, campaign co-chair of Carbon Washington, the organization behind the I-732. “You may love capitalism or you may hate it, but you should be able to recognize that it is a very powerful force in the world. I work as an environmental economist using the tools of economics and the power of capitalism to protect the environment.”

The initiative proposes to phase in a $25 per ton tax on CO2 over two years. The tax would increase thereafter until it reaches $100 per ton, which would take more than 40 years. It also eliminates business and occupation tax for manufacturers (a gross receipt tax for the right to do business in Washington State), reduces the sales tax by 1%, and funds the Working Families Rebate, which could provide up to $1500 a year in tax benefits to low-income working households.

The changes in the initiative are aimed to balance each other out and create a tax shift, not a tax increase. This means I-732 would be revenue-neutral, and that’s where Johnson and other activists take issue. It’s worth noting that Washington State has the most regressive tax system in the nation.

Instead of a neutral-revenue approach, opponents of the initiative advocate for a different tax — one that has net positive revenue. In that case, the government would have additional money to spend on clean-energy alternatives, education, and other investments in the community.

Johnson is president of the Washington State Labor Council and a member of the governing board for the Alliance for Jobs and Green Energy. The Alliance is a coalition of environmental, social justice and labor groups, often including communities most affected by climate change.

“The starting premise of the alliance is this: there are two great threats to the shared prosperity today. One of course is inequity and income inequality, and the other is climate disruption. And we can topple both of them together. But to do that, we need a comprehensive set of policies and we have to raise a net positive amount of revenue so we can invest in creating a clean energy economy,” said Johnson. “Just a little bit of equity in terms of a working families tax rebate is not enough. We need to leverage clean energy investments in communities of color.”

Johnson claims that the the Working Families Rebate benefits only 40% of low-income people. Instead of a tax shift, The Alliance wants the government to keep more of the revenue generated by the Carbon Tax and use it to “direct investments to accelerate the transition to clean energy and reduce the impacts of global warming pollution on the people, industries and lands hardest hit by climate impact,” as written on their website. To this end, the Alliance is planning an initiative of their own, which has not yet been released.

“It’s past time for small changes.” said Johnson. “We have to do something big.”

Supporters of I-732 claim that increasing government spending wouldn’t have bipartisan support, while the revenue-neutral measure draws support from both the left and right.

“We have letters from over 40 economists, including some folks here on campus, and we’re building support across the political spectrum,” said Bauman. “Seattle Times wrote more than a year ago that a revenue neutral approach would be both less financially risky and more politically viable than the [Cap and Trade System],” which was proposed by governor Jay Inslee, stymied by Republicans, and rejected by the Democratic-majority state House in 2015.

However, Johnson argued that I-732 wouldn’t be popular with voters, citing polls conducted by the Alliance.

“We’ve done eight sets of polling on various carbon pollution reduction proposals over this past year, and in only one of them did the I-732 ever pass the 50 percent mark. After pros and cons were made, it came in at 51 percent. The efforts were tremendous, the thought put into it was great, but it’s not a winning proposal and I think we need to go back to the drawing board.”

“If or when the Alliance comes out with another idea, a tangible policy idea, then you can make up your mind about that.” Bauman said to the audience. “But now, we’re the only policy that’s on the table in terms of working on ballot measures.”

Concluding his comments, Bauman said he and supporters “continue to feel that Initiative 732 is terrific climate policy and terrific social justice policy. Maybe it’s not perfect, but you don’t want the perfect to be the enemy of the good.”

If you want more information you can sign up for weekly updates about I-732 through Carbon Washinton and check out the Alliance for Jobs and Clean Energy.