Wash­ing­ton state con­sid­ers two car­bon taxes

Wash­ing­ton state may con­sider two car­bon fee mea­sures in 2016 “Try­ing to beat the fos­sil fuel in­dus­try is re­ally dif­fi­cult”

Bloomberg Businessweek (Asia) - - CONTENTS - −Peter Ro­bi­son

Bil­lion­aire Tom Steyer went big on the 2014 elec­tions. He poured more than $65 mil­lion into a su­per PAC, NextGen Cli­mate, with the goal of elect­ing can­di­dates will­ing to sup­port lim­its on green­house gas emis­sions. The re­sults weren’t great: Four of the seven U.S. Se­nate and gu­ber­na­to­rial can­di­dates NextGen backed across the coun­try lost. In Wash­ing­ton state, where the group put $1.3 mil­lion into five leg­isla­tive races, hop­ing to de­liver a ma­jor­ity to cli­mate-minded Demo­cratic Gov­er­nor Jay Inslee, not a sin­gle can­di­date won.

That hasn’t stopped NextGen from get­ting in­volved in the 2016 elec­tions. In Novem­ber the group con­trib­uted $80,000 to the Al­liance for Jobs and Clean En­ergy, which counts many of Wash­ing­ton state’s largest unions and en­vi­ron­men­tal groups as mem­bers. The al­liance plans to be­gin gath­er­ing sig­na­tures for a voter ini­tia­tive that would re­quire the largest pol­luters to pay a mit­i­ga­tion fee for each ton of green­house gas re­leased, and in­vest the pro­ceeds in clean en­ergy. The idea echoes NextGen’s ads in pres­i­den­tial pri­mary states urg­ing a shift in U.S. en­ergy pro­duc­tion to 50 per­cent re­new­able re­sources by 2030. “It’s the most ex­tra­or­di­nary com­ing-to­gether that I have ever seen” in 25 years, says Gregg Small, pres­i­dent of the al­liance’s gov­ern­ing board and ex­ec­u­tive di­rec­tor of Cli­mate So­lu­tions, a Seat­tle­based non­profit.

The trou­ble is, there’s al­ready com­pe­ti­tion. In De­cem­ber a group of cli­mate ac­tivists sub­mit­ted enough sig­na­tures to qual­ify a mea­sure, known as Ini­tia­tive 732, for leg­isla­tive con­sid­er­a­tion. Led by econ­o­mist Yo­ram Bau­man, the pro­posal pairs a $25-per-ton tax on burn­ing fos­sil fu­els with off­set­ting re­duc­tions of other taxes. The idea is to shift taxes rather than add to them. It would raise $2 bil­lion a year—from driv­ers, who might pay an ex­tra 25¢ per gal­lon of gaso­line; house­holds likely to see higher util­ity bills; and man­u­fac­tur­ers, through in­creased en­ergy costs. That would be bal­anced by a penny-per-dol­lar cut in the sales tax, elim­i­na­tion of some busi­ness taxes, and a credit for low-in­come fam­i­lies. “I like the ef­fi­ciency of it,” says Bau­man, who holds a Ph.D. from the Univer­sity of Wash­ing­ton and spe­cial­izes in writ­ing car­toon-il­lus­trated text­books on cli­mate change and eco­nom­ics. “It’s sim­ple and trans­par­ent.”

Bau­man has been push­ing for a car­bon tax since 1998, when he co-wrote a book, Tax Shift, propos­ing the idea. It was adopted a decade later by Bri­tish Columbia and em­braced last year by Al­berta, known as the Texas of Canada be­cause of its oil re­sources. The Bri­tish Columbia tax is cred­ited with re­duc­ing fos­sil fuel use 16 per­cent in its first five years. Bau­man, who’s writ­ten a haiku to pro­mote Ini­tia­tive 732, hopes to at­tract con­ser­va­tive vot­ers who op­pose new spend­ing but also worry about cli­mate change. “We’re se­ri­ous about do­ing some­thing that’s go­ing to get bi­par­ti­san sup­port,” he says.

Talks to unite Bau­man’s ini­tia­tive with the Steyer-backed al­liance plan fell apart in late De­cem­ber. Al­liance sup­port­ers ac­cused Bau­man’s group of try­ing to sneak through tax cuts un­der the guise of cli­mate change. They pointed to one state anal­y­sis that showed his mea­sure might re­duce tax rev­enue by $675 mil­lion over four years. Bau­man’s back­ers re­sponded that the at­tacks

only gave cred­i­bil­ity to con­ser­va­tive claims that cli­mate change is a left­wing Tro­jan horse to ex­pand govern­ment. An al­liance spokesman de­clined to com­ment. Its gov­ern­ing board is weigh­ing its op­tions, which in­clude press­ing ahead, team­ing with Inslee to cap emis­sions via ex­ec­u­tive or­ders, or drop­ping out en­tirely, ac­cord­ing to one per­son fa­mil­iar with the dis­cus­sions. “Try­ing to beat the fos­sil fuel in­dus­try is re­ally dif­fi­cult,” Small says. “It’s harder to do when we’re not all to­gether.”

The bot­tom line A Wash­ing­ton state cli­mat­e­change ini­tia­tive backed by Tom Steyer’s NextGen Cli­mate su­per PAC faces a ri­val pro­posal.

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