CarbonWA's initiative I-732 qualifies

This week we’ve got official confirmation that I-732 has qualified (!), a final 250 Club update, the unveiling of our new website (yeson732.org), and a great editorial on carbon pricing in the NY Times.

I-732 qualifies!

We will share the official document with you when it’s released, but for now we have (what else?) a Twitter post from the Secretary of State’s office that I-732 was certified, plus an email that their 3% sampling procedure “projected 262,940 valid signatures, well above the required 246,372”. Great work everyone—staff, interns, volunteers, donors—and a great segue to our final 250 Club update (with the caveat that you should let me know if we’ve mistakenly left you off the list!).

250 Club update

Congratulations to our new members of the 250 Club (and please contact us if you don’t already have your CarbonWA t-shirt!): Amity Kramer in Seattle and Jan Keller, Carol Reich, and Mary Saylor in east King County. They join previous 250 Club members Heidi Cody in Vancouver; Bob Hallahan and Judy Kaplan on Whidbey Island; Gretchen Allison and Kay Keeler on San Juan Island; Cindy Jayne and Dick Stockment in Port Townsend; Martha Bishop and Barb Zimmer from Climate Action Bainbridge; three supporters in Yakima (Peter Dufault, Chuck Foster, and Eleanor Hungate); five supporters from east King County (Bob Ellis, France Giddings, Eric Hanson, Rob Marsh, and Marilyn Mayers); six supporters from Olympia (Tom Holtz, Jennifer Miller, Carole Richmond, Susan Sunshine, Frank Turner, and Jack Zeigler); two supporters from Bellingham (Amy Nielson and Rosa Rice-Pelepko), and 26 people in Seattle (Morgane Arriola at UW Seattle, Julia Bent, Kyle Conyers, Chris Covert-Bowlds, John C., Alex Dolk, Keith Ervin, Bruce Flory, Polly Freeman, Savannah Kinzer, Lindsey Klemp, Sean Kraft, Raphael Ladmer-Price, Galen LaPlante, Alex Lenferna, Scott McClay, Phil Mitchell, Todd Mitchell, Margaret Moore, Trevor Partington, Nancy Penrose, Mishu Pham-Whipple, Bill Roach, Mike Ruby, Phil Singer, and Ed Watcher).

Double congratulations to folks who have hit 500 signatures: David Scheer and Joe Wiederhold from Bellingham and David Chapin, Court Olson, and George Reynoldson in east King County. They join Ed Chadd in Port Angeles, Gary Piazzon on Whidbey Island, Scott Finley on San Juan Island, Larry Lowther in Ellensburg; Chom Greacen from Lopez Island; Betty Hauser in Olympia; three supporters from east King County (Chris Diehl, Laura Rivendell, and staffer Jason Puracal); four members from Climate Action Bainbridge (Bruce Bonifaci, Frank Gremse, Omie Kerr, and Alex Mezentsev); five supporters from Bellingham (Andy Day, David Gary, Anna Paulson, Kayta Tourtillot, and Andew Zvilna); and nine supporters in Seattle (Robin Briggs, Megan Conaway, Ron Lindsey, John Lombard, JL, Tim Newcomb, Anne Shields, Fritz Wollett, and campaign co-director Duncan Clauson).

Quadruple congratulations to Ben Larson and John Whitmer from Bellingham for passing 1,000+ signatures. They join Louise Stonington from east King County; Ande Finley from Lopez Island; Thad Curtz and Penny Purkerson in Olympia; Dave Hopkinson and staffers David Jackman and Rheanna Johnston in Bellingham; six supporters from Climate Action Bainbridge (Brian Anderson, Herb Hethcote, Cheryl Hunter, Gerlind Jenkner, Mary Clare Kersten, and Erika Shriner); and 11 folks from Seattle (David Foutch, Bob Jeffers-Schroeder, Mike Massa, Alan Ness, Ben Pfeiffer, Julia Robinson, Aaron Tam at UW Seattle, yours truly, campaign co-director Kyle Murphy, and Seattle staffers Ben Silesky and Laurel Wolf). And extra bonus congratulations for folks with 2000+ signatures (Cheryl Hunter, Julia Robinson, and campaign co-director Kyle Murphy, joining Ben Pfeiffer and Gerlind Jenkner), folks with 3000+ signatures (staffers Ben Silesky and Laurel Wolf), and Bob Jeffers-Schroeder with over 4000!

New website

Check out our new website at yeson732.org. Please send feedback to duncan@carbonwa.org, and thanks to Duncan, to our “communications QB” Bill Boyd, and to web designer Warren Curkendall for bringing this to life!

In the news

Top of the list is the fabulous NYT editorial “Proof That a Price on Carbon Works”: “British Columbia started taxing emissions in 2008. One big appeal of its system is that it is essentially revenue-neutral… Researchers have found that the tax helped cut emissions but has had no negative impact on the province’s growth rate, which has been about the same or slightly faster than the country as a whole in recent years.”

In other news: Last year (2015) was by far the hottest year on record (see also the NYT and this visual from Bloomberg). Bloomberg also has “Watch Elon Musk and Exxon Finally Agree on Something”, and there’s a new carbon pricing study from World Resources Institute; see the WRI blog on “A Carbon Price Will Reduce Emissions More than Computer Models Predict” and note that this relates to the EIA studies that we’ve discussed previously. News specifically about Carbon Washington includes this Niskanen Center blog by Shi-Ling Hsu and Bloomberg’s “Tom Steyer Battles Green Frenemies in the Pacific Northwest”. More news from Olympia next week, and If you haven’t already done so please write your legislators… and if you have already written them then don’t hesitate to contact them again to make sure they’re in the loop on recent developments!

Let's use I-732 (revenue-neutral carbon tax swap) to beat I-1366 (Eyman's 2/3 super-majority blackmail)

There’s a simple way to beat Tim Eyman and his initiative I-1366. At the same time we’ll help the environment, and, optionally, raise revenue to fund schools.  And we can even do it in a revenue-neutral way, thereby making it palatable to Republicans.

By way of background, recall that if I-1366 passes — and early returns suggest that it will — one of three things must happen.

  1. The legislature must put before Washington State voters a constitutional amendment requiring a 2/3 super-majority of legislators in both the state House and the state Senate (or a majority of voters) to approve any tax increase or reduction in tax breaks; or
  2. The state sales tax must be lowered from 6.5% to 5.5%; or
  3. The state Supreme Court will have to rule that I-1366 is unconstitutional.

But I say there’s a simple solution to this problem, even if the State Supreme Court fails to rule I-1366 to be unconstitutional.

Let’s go ahead and lower the sales tax 1% but at the same raise taxes on carbon, capital gains, and/or income to make up the loss.

The tax on carbon will be similar to the effect of I-732 being (successfully) pushed by CarbonWA. One difference is that I-732’s tax would be revenue-neutral, whereas the current proposal allows, but doesn’t necessitate, revenue neutrality.

Because I-732 apparently has enough signatures to succeed, and because I-732 is an initiative to the legislature, the legislature will need to decide next year whether to impose a revenue-neutral tax on carbon. If they fail to act, a measure will appear on the ballot in 2016 to raise tax on carbon and lower the sales tax and the B&O tax in a revenue-neutral way. My point is: the legislature can use I-732 (or something similar) to neutralize I-1366.

But in addition to raising tax on carbon, we should raise taxes on capital gains and/or on income (with the first, say, $50,000 of income exempt from tax). These taxes would make Washington State’s tax system more fair and progressive. They’d lower tax on most people. After all, our state is said to have the most regressive tax system in the nation.

The voters are correct to be angry about high taxes! Most people are over-paying. What most people don’t understand is the reason their taxes are too high: because our tax system is regressive.

The net result of this proposal is that we’d satisfy the words of I-1366 — we’d lower the sales tax by 1%. But what’s great is that we’d also lower taxes on most people, help save the environment, and make our tax system more progressive.

Even if the tax shift is revenue-neutral — and that would be easier to pass in the legislature — the change will be a big win.

So, there should be no need to be afraid of I-1366 — if the legislature has the guts to do the right thing and if the people of Washington can be educated about what’s in their own self-interest.

The key is just that: educating the public. Will our political leaders show some leadership and help educate the citizens? And will we activists build an effective movement to help this happen? Until we educate the public on this issue, we will continue losing elections and initiatives.

I admit that Republicans in the legislature are unlikely to be reasonable about raising an income tax or capital gains tax. Most of them would be OK with public education failing and with homeless and sick people languishing on the streets. Conservatives will argue that the legislature mustn’t dare go against the will of the voters, who say by their votes that they do not want additional revenue. I have two answers to this.

First, if we make the change revenue-neutral, then the Republicans may agree. As CarbonWA has shown, many conservatives will agree to a revenue-neutral tax shift (for example, More and more conservative thinkers want to tax carbon. Will politicians and activists follow? and Why We Support a Revenue-Neutral Carbon Tax). In fact, many lefty groups are opposed to I-732 because of its revenue-neutrality and because it was designed in consultation with people from the conservative Washington Policy Center. (See Alliance for Jobs and Clean Energy, Carbon-tax initiative divides environmentalists, and Why I decline to sign I-732).

Second, the voters are voting against their own self-interest and need to be educated as to why the current tax system is unfair and inadequate.

But we can beat I-1366 without raising revenue.

Stop voting against your own self-interest

Republicans raised taxes on the poor and the middle class

Governor Inslee on our unfair, regressive tax system

Note: This article was previously published under the name Hell, yeah! Let’s lower the sales tax 1% — and raise taxes on carbon, capital gains and/or income.

CarbonWA the heck is going on?

As you may have heard, the Alliance for Jobs and Clean Energy announced yesterday that they intend to file a ballot measure next year. (The single best article on the topic is Jim Brunner’s “Second group plans state initiative on climate change” in the Seattle Times.) Although this conflict has been simmering since our joint statement with the Alliance back in May, the combination of our signature-gathering success and the Alliance’s announcement has raised a whole lot of questions, the principal one being “What the heck is going on?” (Or, as the subject line suggests, “WA the heck is going on?”)

The purpose of this email is to try to describe the current landscape as best we can. We may know more after a meeting with the Alliance that is scheduled for later this afternoon, and we will have even more to say in a few days, but for now here are some Frequently Asked Questions and their answers to the best of our abilities (and note that we sent a draft of these FAQs to Alliance director Lisa MacLean and three other Alliance leaders to ask for any factual edits; we will post any updates here and as needed in future email blasts, again with the goal of describing the current landscape as best we can):

Q1: What the heck is going on? As we described a year ago, there are two potential paths to climate action. One is a revenue-neutral bipartisan approach like Carbon Washington’s. The other is a revenue-positive approach like the Alliance’s. Carbon Washington has been pushing forward on our approach, and the Alliance has been pushing forward on theirs, and now the continental plates are inching towards each other.

Q2: What is the Alliance’s policy? The Alliance’s press release notes that they are “working closely to establish the final details of the policy during the remaining months of 2015”, but what comes across in the press release is that (1) it’s going to involve a price on carbon and (2) it’s going to be revenue-positive, with funds “invested in accelerating the transition to a clean energy economy and addressing the impacts of carbon pollution on our air, land and people”. That could mean a carbon tax, or it could mean cap-and-trade, or it could even mean cap-without-trade (the so-called “cap-and-jail” option). We will have to wait for additional details from the Alliance, and we promise to share them with you when we have them (including whatever information we learn at today’s meeting that we are allowed to make public).

Q3: Isn’t it too late for the Alliance to begin collecting signatures for a ballot measure? No. There are two initiative paths to the November 2016 ballot. Carbon Washington is pursuing an Initiative to the Legislature: we have been gathering signatures this year for I-732, and those signatures are due by the end of the year. Once we qualify, I-732 will go to the state legislature in January 2016 and then (if they don’t pass it) to the voters in November 2016. In contrast, the Alliance intends to file an Initiative to the People, which involves filing in early 2016 and then collecting signatures until early July in order to put their measure on the ballot in November 2016.

Q4: So there might be two measures on the ballot in November 2016? Yes. To add an additional wrinkle, Carbon Washington must turn in signatures for our Initiative to the Legislature (I-732) before the end of the year, and the Alliance cannot file their Initiative to the People measure until after the new year begins.

Q5: What happens if both measures are on the ballot? It depends on the yet-to-be-announced details of the Alliance’s policy, and it depends on how the voting public views the issue. The fear is that confusion and conflict between the two measures will doom them both, which is why Carbon Washington and the Alliance issued a joint statement in May saying that we “we are committed to avoiding two competing carbon pollution-pricing measures on the ballot in November 2016”. But if there are two competing measures on the ballot then it’s also possible that both measures will pass, and if that happens then the odds are that they will be able to legally co-exist: I-732 would put a price on carbon and reduce existing taxes, and the Alliance’s measure would put an additional price on carbon, with funds invested in mitigation and adaption through the details they are currently working out.

Q6: What happens next? Carbon Washington and the Alliance will meet later today and we will report as much as we can as soon as we can. Until then we will say what we have said many times before: If you support the Alliance then God bless you and go support them. (You can even pledge to collect signatures in 2016!) And if you support Carbon Washington then keep your eye on the ball: to a surprising degree the situation today is essentially the same as it was six months ago, with CarbonWA pushing a detailed policy proposal and the Alliance making noises about climate action but not providing much in the way of detail. So if you’ve been collecting signatures for CarbonWA then we hope you will continue to collect signatures, and if you have been donating to CarbonWA then we hope you will continue to donate, knowing that we’re all on the same team and hence that we all have an incentive to move forward in a way that advances the cause of climate action.

Q7: Anything else? Yes, here’s a message from campaign co-director Kyle Murphy: “Our campaign belongs to everyone who has donated money, joined a chapter, gathered signatures for us, and helped to take I-732 to the cusp of making the ballot, which is where we find ourselves today. So let us know what you think about this announcement from the Alliance and provide any feedback you have for those of us at CarbonWA HQ as we carry on.” If you want to take Kyle up on his request you can email him directly at kyle [at] carbonwa.org. You can of course also email me, and you should also be able to post comments on the blog.

The "Poison Pill" and the Carbon Tax

The transportation bill passed by the Washington State Senate contains an infamous “poison pill” provision that would move public transit and other multi-modal funding to the roads account if the state passes a low carbon fuel standard. (See http://www.thestand.org/2015/03/fix-fatal-flaws-in-transportation-package/ for background.)

The poison pill was inserted by State Senate Republicans to please the Koch Brothers and other fossil fuel industry backers of the GOP, as well as to stymie Governor Inslee’s green energy agenda.

Late last month, Governor Inslee agreed to existence of the poison pill as a condition for getting a deal made.

But the state House needs to agree on identical language. So far, some progressive House members are refusing to accept the poison pill, while some Republican House members are refusing to go along with the 11.7 cent rise in the gas tax.  See Solving or At Least Understanding the Gridlock in Olympia for details.

(By the way, the budget and transportation package agreed to by the Senate raise taxes on the poor and the middle class, while not raising taxes on the coddled rich.)

But if the poison pill is the only blocker for the progressives, perhaps they should relent, because there’s an excellent alternative that appears not to be subject to the poison pill. The revenue neutral carbon tax promoted by CarbonWA, with bipartisan support, is not a low carbon fuel standard and so apparently wouldn’t trigger the fund transfer.

CarbonWA and its supporters are gathering signatures for initiative I-732 that they hope will appear on the November, 2016 ballot.  There are many reasons why a carbon tax makes more sense than Cap and Trade or a Low Carbon Fuel Standard.

Carbon Taxes Are Even Better than You Think

Executive summary

The Carbon Washington carbon tax proposal is revenue neutral, with about 70% of the carbon tax revenue going to reduce the state sales tax by a full percentage point and the remaining revenue divided between reductions in manufacturing taxes and funding for the Working Families Rebate, a state-level bump-up of the federal Earned Income Tax Credit.

Household impacts will vary by household (see the carbon tax swap calculator for detailed estimates) but in aggregate the carbon tax and the sales tax reduction will roughly offset each other for each income quintile, with most households paying a few hundred dollars a year more for fossil fuels and a few hundred dollars a year less for everything else. The dominant impact on social justice will therefore come from the Working Families Rebate, which at 25% of the federal EITC will provide up to $1500 a year for 400,000 low- and middle-income working families in Washington State.

Thanks to the sales tax reduction and the Working Families Rebate, passing the Carbon Washington revenue-neutral carbon tax proposal will be the biggest improvement to the progressivity of the Washington State tax system since the 1977 ballot measure that exempted groceries from the sales tax.

 

Introduction

There are three ways that climate policy affects social justice. The first, not surprisingly, is as climate policy: everyone seems to agree that global warming will hit the poor harder than the rich, so there is a social justice benefit to reducing carbon emissions. A carbon tax is a great way to do this, as described in my previous posts: “Carbon taxes are better than you think (Part I: Transportation)” and “Carbon taxes are even better than you think (Part II: Electricity)”.

By reducing fossil fuel consumption, a carbon tax will also provide co-benefits by reducing emissions of local air pollutants like particulate matter and sulfur dioxide; these co-benefits will be especially valuable for the low-income communities and communities of color who are disproportionately affected by local air pollution hot spots. These co-benefits are the second way that climate policy affects social justice.

The third way that climate policy affects social justice is as fiscal policy. This is especially easy to see in the case of Carbon Washington’s carbon tax swap, a revenue-neutral approach that uses carbon tax revenues to reduce the state sales tax, fund the Working Families Rebate, and effectively eliminate the B&O business tax for manufacturing.

Tax Swap Poster(mini)

Before diving into the policy, however, let’s provide an overview of state and local tax systems.

 

State and local tax systems

The Institute for Taxation and Economic Policy (ITEP) has a terrific website that describes the state and local tax systems in all fifty states, including a graphical depiction of the percentage of income that different income groups pay in state and local taxes. This depiction includes the bottom four income quintiles (the lowest 20%, the second-lowest 20%, the middle 20%, and the fourth 20%) and a division of the top income quintile into three subgroups, ending with the richest 1%.

The next four graphs show the ITEP results for Oregon, Idaho, California, and Washington State. The first three all have fairly flat tax systems, meaning that households across the income spectrum pay about the same percentage of their income in state and local taxes.

OR

ID

CA

WA

Washington State has the dubious distinction of having the most regressive state and local tax system in the nation, but the ITEP graphs for Tennessee and Florida look fairly similar. What all three states have in common is a heavy reliance on sales taxes and the absence of a state income tax.

This combination almost inevitably produces a regressive state and local tax structure. Without an income tax, the share of income that high earners pay in taxes is likely to remain relatively low because they allocate relatively more of their income to savings, services, out-of-state spending, and other areas that are not subject to sales taxes in their home jurisdiction. It follows that a carbon tax—which is more like a sales tax than an income tax—is unlikely to alter the fundamental structure of the Washington State tax system.

It is, however, possible to use carbon tax revenues to reduce the tax burden on the lowest income households in Washington State, and this is what the Carbon Washington policy does by reducing the state sales tax and funding the Working Families Rebate.

 

Carbon taxes and sales tax reductions roughly offset each other

The first way our policy addresses financial impacts on low-income households (and more generally on households and businesses across the state) is by reducing the state sales tax. Cutting the state sales tax by a full point reduces the burden of sales taxes by 10-15 percent, depending on how you count it. (The state sales tax is currently 6.5 percent, but local sales taxes bring the current total up towards 10 percent in many areas of the state. If you focus on the state rate, a reduction to 5.5 percent is a savings of 15.4 percent; if you focus on the total state-plus-local rate, the percentage reduction depends on the specific local rate, but a reduction from the Seattle total of 9.5 percent to 8.5 percent is a savings of 10.5 percent.)

Sales taxes are of course regressive—lower-income households pay more as a percentage of their income because they spend more of their income on items that are subject to sales tax—so reducing the sales tax is a good way to make a carbon tax swap more progressive. (Whether or not carbon taxes are themselves regressive is a matter of some debate among economists, with one of the key questions being whether you should focus on current income or on lifetime income; see here for some details.)

To a first approximation, the household impact of the carbon tax and the sales tax reduction offset each other: most households will pay a few hundred dollars a year more for fossil fuels and a few hundred dollars a year less for everything else. The exact details will of course vary from household to household (see the carbon tax swap calculator to evaluate the impacts on your household) but for aggregate results we can use the Consumer Expenditure Survey and data from the EIA (natural gas prices, retail gasoline prices, home heating oil prices, and electricity prices) to estimate that carbon tax payments for various income quintiles are roughly in line with the sales tax savings estimated from the carbon tax swap calculator: about $100 a year for the lowest income quintile, about $200 a year for the second-lowest income quintile, and about $250, $300, and $450 a year, respectively, for the higher income quintiles.

salesTaxEstimate copy

Source: Based on the 2002 Tax Structure Study Report.

 

Assuming that the carbon tax and the sales tax reduction offset each other, we can focus on the Working Families Rebate. Stated simply, the conclusion of our analysis is this: Passing the Carbon Washington revenue-neutral carbon tax proposal will be the biggest improvement to the progressivity of the Washington State tax system since the 1977 ballot measure that exempted groceries from the sales tax. (See pp18-21 of the state’s Tax Reference Manual 2010 for a history of tax changes in the state.)

 

The Working Families Rebate

The largest anti-poverty program in the United States is the federal Earned Income Tax Credit. The federal EITC is a refundable tax credit that benefits low-income working households by providing a percentage match of earned income up to a certain level. (See figure below, and note that “refundable” means that households receive a check if their tax due is less than the amount of the credit.) The EITC provides a maximum credit of $496 for households without children, $3,305 for households with 1 child, $5,460 for households with 2 children, and $6,143 for households with 3 or more children.

eitcGraph

Source: Tax Policy Center.

 

Twenty-five states (and New York City and Washington, DC) provide local bump-ups of the federal EITC; for example, low-income households in Kansas receive from the state government a refundable state income tax credit equal to 17% of their federal EITC. The bump-up rates range from 3.5% of the federal EITC to 50% of the federal EITC.

Washington State has no income tax, but in 2008 the state government created a “sales tax exemption” for working families that equals 10% of the federal EITC. This Working Families Tax Exemption—a.k.a. Working Families Rebate—currently exists in state law as RCW 82.08.0206, but it has never been funded. (For even more details see the great work of the Washington Budget & Policy Center, but note that they’re assuming a bump-up of 10 percent of the federal EITC, while our policy provides a bump-up of 15 percent in year 1 and 25 percent thereafter.)

A 25% Working Families Rebate provides up to $1500 a year for 400,000 working families in Washington State. The impact is greatest for households with children and least for households without children and (obviously) households without earned income. The following graphics show that the Working Families Rebate has a significant impact on the state and local tax structure in Washington State for many (albeit not all) low-income households. (The red numbers in parentheses show the tax savings for a household with the average income for each ITEP income quintile.)

WA-married-1

WA-single-1

WA-married-2

WA-single-2

WA-married-3

WA-single-3

The graphics show that a 25% Working Families Rebate would have a tremendous impact on low-income households with children. In fact, funding the Working Families Rebate at a 25% level would provide the greatest improvement to the progressivity of the Washington State tax system since the sales tax exemption on groceries was passed at the ballot in 1977.

We can use the Consumer Expenditure Survey for a more in-depth comparison of the Working Families Rebate and the sales tax exemption on groceries. Households in the lowest income quintile spend an average of $2500 on groceries, so a 9.5% sales tax exemption amounts to $240 per household, or about $120 million for the approximately 520,000 households in this income quintile in Washington State. Households in the second-lowest income quintile spend an average of $3200 on groceries, so a 9.5% sales tax exemption amounts to $300 per household, or about $150 million for the approximately 520,000 households in this income quintile in Washington State. Total savings for households in the lowest two income quintiles therefore total $270 million a year.

Our 25% Working Families Rebate totals about $200 million a year, which is comparable to (albeit somewhat lower than) the total for the sales tax exemption for groceries.

One major difference is that the sales tax exemption for groceries was not revenue-neutral: it reduced state General Fund revenues. The carbon tax swap is intended to be revenue-neutral, with the carbon tax revenues offsetting the sales tax reduction, the Working Families Rebate, and the reduction in business taxes for manufacturing.

Another major difference is that the sales tax exemption for groceries is likely to provide roughly equal benefits to all households in a given income quintile. In contrast, the Working Families Rebate concentrates benefits on households with earned income and on households with children. (According to the Census Bureau, about 55% of people in poverty are in households with children.) The minimum Working Families Rebate is $100 a year, so qualifying households with children will receive a Working Families Rebate of between $100 and $1500. In contrast, qualifying households without children will receive a much smaller Working Families Rebate—the maximum is only $125—and of course households do not qualify for the Working Families Rebate if they don’t have earned income or otherwise don’t qualify for the federal Earned Income Tax Credit. These households will receive sales tax reductions that are likely to offset their carbon tax liabilities, and they will benefit from the climate policy impacts of the Carbon Washington proposal, but the main fiscal policy benefits will accrue to households with children.

Originally posted at CarbonWA

Carbon WA news

Legislative language on the home stretch: One of our winter deliverables was to finalize our legal language, so here’s an annotated copy of another new draft following our legal team meeting earlier this week. The tweaks from the previous version were fairly minor, so we expect the ballot title to be similar to the ballot title that just arrived from the Secretary of State’s office for our previous version: Initiative Measure No. 1397 concerns taxes. This measure would impose a tax on certain fossil fuels and electricity generated by fossil fuels, phase in a one-percentage-point sales tax reduction, reduce certain business taxes, and increase a sales tax exemption. Should this measure be enacted into law? Yes [ ] No [ ]. More generally, we are making good progress towards being able to file a final version on March 11, the first day that we can file our Initiative to the Legislature. The Secretary of State’s process takes about a month, so signature-gathering will begin in early/mid April.

Bellingham: Kyle Murphy and Ben Silesky will be in Bellingham this Friday and Saturday, so if you are located in/near Bellingham and want to connect, email Kyle@carbonwa.org to set up a time! Also check out the pretty hilarious post I wrote last year for Sightline about whether the BC carbon tax is successful because all the Canadians are filling up their tanks in Bellingham. (The short answer is No.)

Other events: I’ll be part of CityClub’s March Civic Cocktail on W March 4, and Duncan and Kyle are scheduled to be part of an event at Bainbridge Art Museum that same evening. Then the CCL Greater Pacific Northwest Regional Conference is coming up March 7-8 in Seattle; CarbonWA will be tabling and I’ll be doing my comedy-and-carbon-taxes routine on Saturday March 7. Earlier that day Ben Silesky will be at the South Sound Sustainability Expo in Tacoma. Cliff Mass will be at Seattle Town Hall on W March 11, and I’ll be at Town Hall on M March 16 for a panel on “Putting a price on Washington’s climate pollution” with KC Golden, Todd Myers, and Nicole Keenan. Further afield it looks like I’ll be in Spokane around April 15, Whidbey Island around April 22, Bremerton on April 25, and Bainbridge Island around April 29, so email me if you want to organize events or a house party while I’m in town! Details on most upcoming events are here.

Readings: Our friends at Oregon Climate have a nifty new 5-minute video, so check it out on the Oregon Climate homepage, or watch here:

Also Todd Myers of the Washington Policy Center has a video describing cap-and-trade (and why he’s against it, all in less than 2 minutes!). Ian Adams of R Street has a post that should be especially thought-provoking for CCL folks: “The difference between wanting a carbon tax and getting one.” Somehow that dynamic seems to be missing from the state transportation discussion, where Senate Republicans introduced a “poison pill” that eliminates funding for transit, pedestrians, and bicyclists if Governor Inslee introduces a Low Carbon Fuel Standard (LCFS) via executive order. Richard Davis also argues against the LCFS in the Seattle Times, and in doing so he has nice things to say about how the CarbonWA carbon tax would be better than an LCFS… but so far the oil companies can’t manage to translate their theoretical support for carbon pricing into practical support. Elsewhere, “Sea-Tac Airport tells of need for expansion”, and Clean Energy Canada has a report based on BC’s experience called “How to adopt a winning carbon price”; they have a handy summary in “How B.C. brought in a carbon tax without tears”.

CarbonWA is hiring! Our campaign co-directors Kyle Murphy and Duncan Clauson are assembling a team of talented organizers to help us build a strong volunteer network, get the word out about CarbonWA, and collect signatures. We are open to candidates across the state, but we are especially interested in hiring in the greater Puget Sound region. More details in this job posting (PDF), please share widely! Applications and inquires can be directed to Kyle@carbonwa.org.

As always comments welcome on the blog or via Facebook and Twitter.

News from CarbonWA

Campaign co-directors: We are delighted to announce that Kyle Murphy and Duncan Clauson will be starting on February 1 as campaign co-directors! Kyle, who worked last year as Field Director for the Yes for Seattle Transit campaign, will focus on Organizing; Duncan, who has an MPA from the UW Evans School of Public Affairs, will focus on Operations. Both have already been working hard on the campaign as volunteers, and as full-time paid staff they will follow in the footsteps of our previous stellar staffers Claire Meints and Kristy Royce. You can reach Kyle and Duncan at kyle@carbonwa.org and duncan@carbonwa.org, but please note that they don’t start full-time until the first of February!

Media and readings: One of our eight winter deliverables is to become part of the conversation, and as evidence that we’re succeeding note that our carbon tax effort was highlighted in the first question of this Grist interview with Governor Inslee. The governor took a little jab at carbon taxes—“Don’t bring a feather to a knife fight”—and as we build momentum we can expect more jabs. (See here and here and here for additional examples, the last two being responses to pieces like “How B.C. does climate policy right” from Matt Horne of Pembina and the amazing editorial on “Why Stephen Harper should love carbon taxes” in the Globe and Mail: “Aspiring politicians outside of BC, book yourself a plane ticket, and go visit your future.”)

Now, it’s not for CarbonWA to get into a back-and-forth with the governor about carbon taxes v. cap-and-trade—CarbonWA is the relief pitcher, and the relief pitcher doesn’t criticize the starting pitcher!—but we will provide evidence supporting the effectiveness of our policy, so if you’re interested please check out my two new research posts: “Carbon taxes are better than you think (Part I: Transportation)” and “Carbon taxes are even better than you think (Part II: Electricity)”.

Other readings for the week include Cliff Mass’s “What should Governor Inslee do about climate change?”, Sara Cate’s “Saturday Soapbox” in the Yakima Herald, Sustainable West Seattle’s Andy Silber on an “Alternative approach to climate change negotiations”, conservative columnist Charles Krauthammer’s “Raise the gas tax. A lot” in the Washington Post, and these three pieces from carbon pricing advocates in Oregon. Also, Governor Inslee’s bill has been officially introduced as SB 5283 / HB 1314… and the state Senate voted in a rule change that apparently requires a two-thirds supermajority in the Senate to pass the governor’s proposal.

Materials: Another one of our eight winter deliverables is to update our website and materials. This is something that Duncan will be spearheading when he comes on board full-time, but for now I want to post (and encourage feedback on) this PPT presentation (based on my UW panel presentation last week) and on our 2-page brochure (which as you’ll see is intended to be printed and folded in half).

Endorsements: We are delighted to announce endorsements from the Washingotn State UU Voices for Justice and from Climate Action Bainbridge (formerly Coal Free Bainbridge). They join other endorsers like Olympic Climate Action, whose annual membership event is coming up Feb 8 in Port Angeles. Some of these groups have endorsed both CarbonWA and the governor’s effort and we think that’s terrific and are excited to pick up additional endorsements in the weeks ahead!

Events: I (Yoram Bauman) will be at the Earth Care Summit in Portland this weekend and am tentatively meeting folks in Vancouver WA this Sunday, so email me (yoram@carbonwa.org) if you want to join in! In Olympia, CarbonWA’s Akua Asare-Konadu and Thad Curtz will be presenting on Saturday Jan 31 as part of a Carbon Fee Forum co-sponsored by Olympia FOR’s Climate Group and Climate Solutions. And for folks in Bellingham, I know that CarbonWA’s Ben Silesky is planning a visit on T night Jan 27, so email him (ben@carbonwa.org) for details. As for Seattle, I have presentations on W Jan 28 (I’ll be doing my comedy-and-carbon-tax talk as part of Climate Week at the UU Church) and other talks in the weeks ahead at Seward Park Audubon and Pinchot University, plus the UW panel discussion I was part of last week was so successful that it’s going to be repeated at Town Hall on M March 16. Details on all our events here! And if you want to support Governor Inslee’s bill then there’s a hearing in Olympia on T Jan 27 at 1:30pm; details and more info from Climate Solutions or EPC.

As always comments welcome on the blog or via Facebook and Twitter.

Thoughts on Governor Inslee's climate proposal… and UW forum on Jan 14

The past week has been dominated by Governor Inslee’s climate proposal (and by the Seattle Times editorial board arguing for a revenue-neutral alternative!), so here are some thoughts, with a preface that Divest UW and Green Evans are organizing a climate policy forum for Wednesday night Jan 14 featuring KC Golden from Climate Solutions, yours truly, and hopefully others. Details TBD!

Carbon Washington’s position in brief: As we noted in our open letter to the environmental community, we think a bipartisan approach is a more promising path to climate action than pursuing what we called the Progressive Take-Over of the World. Consequently, while Carbon Washington is certainly not opposed to the Governor’s proposal, we agree with the Seattle Times editorial board when they write that “A revenue-neutral approach — one that would mitigate consumer’s costs of a carbon tax — would be both less financially risky and more politically viable in the divided Legislature.”

Additional thoughts:

Some policy details and analysis. The governor’s climate policy covers a lot of ground, but the focal point is carbon pricing, and his carbon pricing proposal is essentially a California-style cap-and-trade system, with auctioned permit revenue mostly going to education, transportation, and social justice. (It will also almost certainly include linking with California, although I’m not sure if that’s explicitly mentioned.) For all the details see this info from the Governor’s office; in particular scroll down to the policy briefs for the Carbon Pollution Accountability Act, which is the proposal relating to carbon pricing. For an enthusiastic analysis see Kristin Eberhard’s Sightline blog post, which includes this terrific revenue graphic. For a not-enthusiastic analysis see the blog posts from Todd Myers at the Washington Policy Center.

Think of it as a clever “Christmas tree”. It’s a Christmas tree because it’s got lots of ornaments: there’s a California-style cap-and-trade bil, there’s money for education, there’s money for transportation, there’s money for social justice… and that’s just one part of the Governor’s proposal. (See the links above for details about electric vehicles, clean fuels, etc.) And it’s clever because it makes for a compelling legislative strategy given the challengs that lie ahead: having different ornaments allows the governor to reach out to a variety of different interest groups for support and to claim (even if the bills don’t pass) that he tried to make progress on their priorities.

The expert consensus is that the governor’s proposal is unlikely to pass in the legislature. This is not intended to be a downer (and, for the record, unlikely doesn’t mean impossible, so if you want to contact your legislator then read this from Washington Environmental Council) but it is intended to be a reality check. There was an election last month, and as the Seattle Times wrote the day after the election, “The results mean it will be harder for Gov. Jay Inslee to act on an aggressive plan to reduce carbon emissions in the state, or to pass legislation that’s been a priority for Democrats including education and transportation funding.” And the story in last week’s paper was similar: “A tougher crowd waits in Olympia.” The truth is that the governor has introduced a bold plan that faces a very steep uphill battle in the legislature, especially the Republican-controlled state Senate.

Comparison with the latest iteration of our Carbon Washington proposal. The governor’s proposal is a California-style cap-and-trade system, with permit prices estimated to start at about $12 per ton CO2 and then grow over time at a rate determined by supply and demand and by minimum bid requirements for the permit auctions; our Carbon Washington proposal is a BC-style carbon tax with a tax rate of $15 per ton CO2 in the first year and $25 in the second year, increasing thereafter at about 5.5% per year in order to maintain revenue neutrality. The governor’s carbon price covers about 90% of greenhouse gas emissions in the state, with the major exceptions being agriculture and waste managment; our Carbon Washington proposal covers about 84% of the greenhouse gas emissions in the state, with the major exceptions being agriculture, public transportation, and emissions of non-fossil-fuel GHGs. The bulk of the revenue from the governor’s proposal goes to fund education and transportation (see Sightline’s terrific revenue graphic
How Washington will spend the carbon revenue in 2017, in millions of dollars
).

The bulk of the revenue from the Carbon Washington proposal goes to fund a one-percentage-point reduction in the state sales tax. The governor’s proposal includes funding for the Working Families Tax Exemption (a state-level bump-up of the federal Earned Income Tax Credit) sufficient to provide a 10% bump-up of the federal EITC for low-income working families; our Carbon Washington proposal includes funding for a 25% bump-up of the federal EITC. The governor’s proposal includes a small chunk of money ($20m a year) to address impacts on manufacturers; our Carbon Washington proposal allocates a much larger chunk of money (closer to $200m a year) to effectively eliminate the B&O tax for manufacturers.

“Tax” versus “Fee” versus “Revenue”. Discussion of the governor’s proposal will be a good test-case for looking at the kind of language that gets used in public discussion. The governor is steering away from calling his proposal a tax (or even a cap-and-trade system) but the public discussion may go elsewhere; for an extreme example see the San Juan Islander, which flat-out calls it a “carbon tax”. Polling suggests that language differences may not matter all that much anyway—the recent G-Squared poll has carbon tax outpolling cap-and-trade—but in any case the weeks ahead will be instructive for learning about who gets to determine what language gets used and how much it matters.

As always comments welcome on the blog or via Facebook and Twitter.

Al Gore Praises Inslee's Climate Plan

At the Seattle Westin today, Al Gore spoke to a full banquet room at a fundraiser for Jay Inslee. Gore offered praise for the Washington Governor’s much vaunted plan to combat global warming. Inslee has proposed putting a price on carbon, improving public transportation, encouraging energy efficiency, and increasing use of solar power and electric cars. It remains to be seen how much of this agenda can come to fruition with Republicans still in control of the State Senate.

Nonetheless, it is worth noting that taking a strong stand on addressing the climate crisis has now become an effective campaign fundraising technique. Not so long ago, such a topic would have earned barely a mention from an elected official with such a high profile as Inslee. Gore, author of An Inconvenient Truth, Earth in the Balance, and other books calling for action to address climate change as well as founder of The Climate Reality Project, called Washington’s Governor the best of all U.S. governors on this critically important issue.

While giving a nod to the importance of fully funding education as mandated by the McCleary decision, Inslee spoke at length about his plans to find “market-driven” solutions to the problem of reducing carbon emissions, telling the crowd of likely Democratic donors the importance of seeing the current crisis as not just a danger to be averted but as an opportunity for Washington State to lead the nation and the world in 21st Century green energy technologies, drawing on our State’s history as a leader in the aerospace and software industries. Gore recited a familiar litany of dire predictions of climate chaos, but he also pivoted to a more hopeful message: the cost of clean energy technologies is dropping at rates much faster than predicted just five years ago. When the former Vice President spoke of the lower cost and higher efficiency of solar panels, a couple at my table who had recently installed solar panels on their home gave each other a quiet high-five. (They also told me that homeowners buying solar panels from a Washington State based company can look to having the cost recouped in the form of lower power bills in no more than five years.)

p4pBut while Gore and Inslee were inspirational, the star of the day was 9 year-old Abby Snodgrass, a member of Plant for the Planet, who has taken it upon herself to help in the effort to plant “a thousand billion trees”. She believes children planting one million trees in every country on earth could offset CO2 emissions all on their own, while adults are still talking about doing it. Each tree binds a CO2 intake of 10 kg per year. Abby called on all the adults to follow her example and choose not to be a bystander just because the climate problem seems too big to solve. Abby is right. The message of the day is that we will never solve the problem of global warming by doing nothing. The scope of the problem requires all of us to work together. The plan put forward by Governor Inslee won’t solve the problem by itself, but like Abby planting dozens of trees, it’s a meaningful step in the right direction.

Readings about carbon taxes

* Our endorsement in September from Seattle Business magazine prompted a half-dozen Letters to the Editor in the latest issue, including pro-carbon-pricing letters from Rogers Weed, former director of the state Department of Commerce; from real-estate heavyweight Craig Kinzer; and from Gwen Hanson of the Bellevue chapter of Citizens Climate Lobby.

* Forbes magazine is featuring a new voice from the Tri-Cities: geologist Jim Conca. I especially recommend “So You Think We’re Reducing The Use Of Coal? — Think Again” and (for something more positive!) “Can A Carbon Tax Create Jobs, Jobs, Jobs?” Jim is also the co-author of the 2007 book The GeoPolitics of Energy: Achieving a Just and Sustainable Energy Distribution by 2040. Another essay from Forbes is from the CEO of Royal Dutch Shell: Why This ‘Big Oil’ CEO Believes In Applying A Price To Carbon.

* For another truly inspiring read, try “The Sudden Rise of Carbon Taxes, 2010–2030” by Lawrence MacDonald and Jing Cao. The authors note that “this essay is what might be called a future history, a work of imagination set in 2030 that looks back at one possible scenario for global climate policy. We are tempted to call it “policy fiction” or perhaps “political science fiction”—a tribute to science fiction—except that such terms seem to suggest that the scenario we have sketched could never come true. Our intention to persuade the reader that some rough approximation of the events we have described is indeed possible, and thus to increase the likelihood that something like it will come to pass.” A key excerpt:

Before long, British Columbia’s success attracted attention south of the border, in the US states of Washington and Oregon, where the large share of voters in favor of climate action had ringside seats to watch the British Columbia experiment with carbon taxes to their north and California’s experiment with cap-and-trade to the south… [A] lively debate ensued in Washington and Oregon about which path to follow. California’s cap-and-trade system seemed to be off to a good start, and the idea that reductions in emissions could be obtained at lower cost and without politically difficult “tax” increases appealed to significant numbers of voters and politicians… It wasn’t long, however, before California’s cap-and-trade system began to lose its luster [and for a variety of reasons described in the full piece] both Washington and Oregon followed British Columbia’s lead and adopted revenue-neutral carbon taxes… As in British Columbia, revenue was rebated through a combination of cuts in business taxes, personal tax breaks, and low-income tax credits. And, as in Canada, other subnational jurisdictions took notice when the US Pacific Northwest managed to combine increased economic growth and falling emissions with tax reductions.

Note that this was written before the authors knew about our CarbonWA campaign!

* I’ve got two articles on the Sightline blog: “The #1 Question from Conservatives about Revenue-Neutral Carbon Taxes” and “The #1 Question from Progressives about Revenue-Neutral Carbon Taxes”. (Hint: They’re the same question!) Another reading along the same lines is “Do Carbon Taxes Just Feed the Beast?” from Bloomberg View.

* The latest hint from Governor Inslee (who’s CERT taskforce recommendations are due in a few weeks) is “Inslee: Carbon regulation could fund education, flood control“.

* Finally, the New York Times has “Environment Is Grabbing Big Role in Ads for Campaigns” and (on a somewhat lighter note) “Why Republicans Keep Telling Everyone They’re Not Scientists”. Excerpts:

Mr. Krosnick of Stanford analyzed polls in 46 states conducted between 2006 and 2013 and found that in every state surveyed, at least 75 percent of the population acknowledged the existence of climate change, and at least 67 percent said the government should limit greenhouse gas emissions.

One result is that a cadre of Republican staffers and advisers, most under the age of 40, have started pushing their bosses to find a way to address the issue.

The general dialogue has been, ‘We have to do something about this,’” said one Republican adviser who asked to remain anonymous in order to speak candidly. “We have to be less head-in-the-sand and acknowledge we are losing public opinion on this issue.

Now that you’ve read all this, what can you do? Well, check out our winter deliverables and see how you can help out! Can you set up a Carbon Washington chapter in your area to help spread the word? Can you make a signature gathering pledge for yourself or your group? Can you complete and comment on the carbon tax swap calculator? Can you help us connect with organizations, businesses, economists, or members of the media? Can you forward our email newsletter (this newsletter!!) to your friends and encourage them to sign on at CarbonWA.org? Can you make a donation? Can you connect with us on Facebook and Twitter? Everybody can do something!

PS. For those of you in the Seattle area, I’m giving a book talk on T Nov 4 at 7pm at University Bookstore on The Cartoon Introduction to Climate Change. Note that I’ve pledged all of my royalties for the year to Carbon Washington and that I’m still happy to send a signed copy to you if you make a donation to Carbon Washington of at least $100… or a monthly contribution of just $20!