I-732 a Missed Opportunity

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Image: Tom Toles, Washington Post

In an editorial urging readers reject Initiative 732, the Seattle Times assured that, instead of the statewide carbon tax, soon-to-be-elected President Hillary Clinton promised to enact “aggressive climate-change response via executive actions that won’t need to go through Congress”. The paper quoted her campaign’s rosy projections of an 80 percent reduction by 2050.

In retrospect, this turned out to be presumptuous and deaf to prevailing political discord, laid painfully bare by the last election. It will be four more years before there is another presidential election with sufficient turnout to pass a new carbon tax. Meanwhile, Washington State’s worst polluters lack an incentive to reduce their emissions.

I-732 was a viable proposal for enacting carbon taxation in a politically fractious era. An integral feature was its “revenue neutrality”. The new carbon tax burden would be rebated with cuts to taxes on sales and business operations. As a result, the initiative didn’t trigger the level of opposition expected from the fossil fuel industry or manufacturers. This made it more likely to be approved.

Ironically, environmentalists’ opposition to I-732 defeated it at the ballot. They argued that proceeds from a carbon tax should be spent on renewable energy, mass transit, and other green measures. But they failed to grasp the bigger, more urgent, predicament. Firstly, spending revenues would make the tax less progressive by weakening its sales tax reductions and tax breaks for low-income families. Moreover, allocating the revenues to green measures would compromise the tax’s neutrality, alienating voters on the right who typically oppose such spending on principle. Without compromise, it will be harder to pass future environmental legislation.

Gambling that a more partisan measure can be passed sometime in the future not only ignores the realities of today’s polarized politics, it fails to weigh the costs of emitting carbon during the indefinite interim. With the global climate poised at the precipice of irrevocable change, suspending action for four more years may prove disastrous.

Washington missed its opportunity to be the vital early adopter of carbon taxation in the US—the world’s largest per-capita carbon emitter. A relatively neutral carbon tax like I-732 could have been replicated in more conservative states, even nationwide. Outside the fairly liberal west coast, initiatives that marry carbon taxes to additional spending on green measures are unlikely to gain bipartisan support.

Wouldn’t an imperfect, but effective carbon tax be better than no carbon tax at all?

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