This November, Washington voters have a rare opportunity to both make our tax system more progressive and decrease greenhouse gas emissions. They can do this by voting YES on I-732 this November.
I-732 is a revenue-neutral carbon tax initiative that will impose a tax on both fossil fuels and electricity generated from these fuels. In order to offset this increase in taxes, it would decrease the sales tax rate one percentage point over two years, essentially eliminate the Business & Occupation (B & O) tax, and introduce a low-income sales tax exemption for up to 460,000 households across Washington State. I-732 would be the first tax of its kind in the United States, and is based off of a similar and highly successful carbon tax in British Columbia.
Climate change is a very difficult problem to solve because people tend act in their own self interest instead of the interest of the planet as a whole. You’ll find very few people who would give up a free plane ride to the Bahamas because they were concerned about their carbon footprint. Since an individual’s contribution to global warming doesn’t impact them personally to any noticeable extent, they have little incentive to change their way of life. A carbon tax solves this problem, as people will have a real, financial incentive to reduce their emissions.
Unlike many environmental initiatives, I-732 has bipartisan support from politicians all throughout Washington State. Liberals like the initiative because it makes our tax code more progressive and encourages people to reduce greenhouse emissions. Conservatives like it because it is a free-market solution to a problem that, in the past, has mainly been tackled by giving government subsidies to clean energy companies. Moreover, it has support from a number of economists and climate scientists who believe that it would be an effective way to decrease carbon emissions, create jobs, and make our tax system more progressive.
Unfortunately, there is some opposition to I-732, and surprisingly, much of it is from environmental groups. Some oppose it because they believe that climate change is a problem that must be solved with the force of government and not by the free market. Unfortunately, government has been ineffective in decreasing carbon emissions. For example, take Solyndra, the solar panel manufacturer that received a 535 million dollar loan from the government but went bankrupt due to other solar companies developing superior technology at a lower price. Even Governor Jay Inslee’s proposed fee on carbon emissions was shot down by the Department of Ecology.
Others oppose it because they feel that communities of color were not engaged in the process of drafting I-732. Much of this is based on their belief that communities of color are more adversely affected by climate change than white communities. Though it is true that third-world countries in vulnerable locations such as Bangladesh will be more affected by climate change than first-world countries such as the United States that have the resources to adapt, the claim that different races will be preferentially affected by global warming is a massive oversimplification. It is more accurate to say that marginalized communities will have more trouble adapting, and that prosperous communities will experience greater economic losses, but that is a contentious topic that I am hesitant to blog about.
Finally, much of the opposition to I-732 is due to a preliminary study by the Office of Financial Management that concluded that I-732 would decrease tax revenue by 797 million dollars over the next six years, making it NOT revenue neutral. However, Sightline Institute, an independent sustainability think tank, found that the Office of Financial Management’s assessment misinterpreted the language in I-732 and instead found that I-732 is “revenue-neutral to the best of anyone’s ability to forecast it.” Though they predicted a loss of 78 million per year in early years, they highlighted that there is a great deal of uncertainty in their estimate and that a surplus of 80 million was well within their margin of error. They also mention that Washington State is estimated to produce 21 billion dollars of taxable revenue in 2019 and that even if you choose to believe the Office of Financial Management, this would still only decrease taxable revenue by approximately 1% while being the most progressive change in tax policy in 40 years. When you combine that with the Washington Department of Ecology’s estimate that climate change will cost Washington State 10 billion dollars per year by 2020 due to decreased hydropower production and water availability and increased wildfires and health-related costs, I-732 seems well-worth it.
On the heels of NASA announcing that we will ‘never see carbon dioxide levels below 400 ppm again,’ it is clear that we need to take immediate action to reduce carbon emissions. I and many other climate scientists believe that I-732 is a wonderful initiative not only because it encourages people to decrease carbon dioxide emissions but because it makes our tax code far more progressive. With I-732, residents of Washington have the opportunity to be on the front lines of tackling climate change. I encourage you all to vote YES on I-732 this month!
– Charlie
