The future of carbon pricing in Washington is looking very scrambled. An initiative that collected enough signatures to send a carbon tax to the Legislature, and then the fall ballot, seemed finally to break the political stalemate.
But now it’s become clear that Initiative 732 is flawed. Joe Ryan, a co-chair of the campaign, told the Seattle Times last week that an $800 million tax break for sales of airplanes by Boeing and others was mistakenly included.
Ryan and others on the I-732 board still insist their measure doesn’t create a deficit, even with the inadvertent aircraft tax break. But they say lawmakers should offer voters a ballot alternative that eliminates that tax break; such an alternative would eliminate the lion’s share of a $915 million net shortfall in state revenues that the Department of Revenue says I-732 would create if approved by voters.
I-732 imposes a $25 per ton tax on the carbon content of fossil fuels, which increases over time. The measure uses that revenue to cut the state share of the sales tax by a penny, reducing it to 5.5 cents per dollar; it spends other revenues on a tax rebate for low-income working families in a state program that is similar to the Earned Income Tax Credit. It also reduces manufacturing taxes.
State lawmakers, divided along partisan lines over global warming as well as over taxes, have been reluctant to fix the initiative. So it’s a long shot assumption that they will do right and provide an alternative for the November ballot.
Republican Sen. Doug Ericksen of Ferndale, who has an oil refinery in his district, has long opposed adding costs on fuel that might add burdens to heavy industry or consumers.
And some Democrats, including Gov. Jay Inslee, favor a cap-and-trade program like California’s, which creates a system of selling yearly pollution credits that get more expensive over time.
So while Washington drifts, California continues successfully with the cap-and trade scheme enacted under a Republican governor a decade ago. And British Columbia continues with a carbon tax levied since 2008.
There is a risk of more climate policy stalemate in our state. Inslee’s Department of Ecology said last week it was withdrawing a proposed carbon-cap rule that would force 5 percent reductions in industrial emissions every three years. The pause to rewrite the proposal may ultimately be a good idea, giving time so that a better rule can be adopted that business groups and environmentalists support.
But that’s not the only policy option that has ground to a halt. Senate Republicans led by Ericksen shut down Inslee’s hopes for a state clean-fuel standard last year. The GOP embedded language in the bipartisan, $16 billion transportation package that strips away state transit dollars if Ecology goes ahead with rule-making on fuel standard that require blending more biofuels in gasoline.
And this year, Ericksen added language to a solar-energy bill this year that wipes out incentives if Ecology caps carbon emissions.
These legislative maneuvers should be hugely disappointing to those who think the state’s response to climate change should include a price on carbon. In the end, Washington needs to contain or force reductions in greenhouse gas emissions.
Putting an alternative to I-732 on the ballot makes sense.
By abdicating, lawmakers will have only themselves to blame when Inslee moves ahead with a carbon cap, or a hard-hitting citizen initiative arises to combat global warming.