Carbon tax proposal can move climate needle

Gov. Jay Inslee’s proposal to charge a pollution fee for carbon emissions is dead in the Washington Legislature for this year. That removes a major option for state policy makers — and activists — looking for ways to reduce the greenhouse gas emissions that are linked by scientists to climate change.

But the lock that oil and other interests have on our state Senate isn’t the end of the story. An initiative campaign is underway that might appeal to Democrats and Republicans alike: Initiative 732 would impose a carbon tax on fuels and electrical power generated from fossil fuels in our state.

The proposal is from Carbon Washington (carbonwa.org), which is led by economist Yoram Bauman who also works as a stand-up comic. But the proposal is serious, modeled after a successful tax in British Columbia. It uses market forces to discourage use of fossil fuels over time.

Once it is phased in over two years, the tax would raise $1.7 billion annually, but because it is revenue neutral , the funds would be used to cut other taxes, thus contributing to some tax equity in our state.

I-732 cuts a penny off of the state’s 6.5-cents-per-dollar share of the sales tax. It also reduces business-occupation taxes for manufacturers that stand to pay more for power.

Because low-income families might struggle to pay the $100 to $200 a year in additional fuel and home heating costs, I-732 also provides a 25 percent match on the federal Earned Income Tax Credit. Bauman says this could provide as much as $1,500 a year for 400,000 families.

I-732 initially puts a $15-per-ton tax on carbon dioxide emissions, which equates roughly to 15 cents on a gallon of gas; the amount would go up to $25 in the second year and increase by 3.5 percent-plus-inflation each year thereafter until it eventually it hits a $100 cap.

Importantly, Bauman notes that British Columbia has had a $30 per ton tax on the carbon content of fossil fuels since about 2008. Despite the pass-on costs for motorists and power users, the economy has grown.

State Democrats have preferred the California-style cap and trade approach favored by Gov. Inslee, which offers more certainty of lower emissions. Our state’s environmental groups, which hoped for a cap-and-trade bill this year, are not yet on board with Bauman’s concept; it’s still possible environmentalists will mount a separate initiative campaign.

A cap would be helpful for ensuring that emissions actually fall.

Oregon is considering both options. A case can be made that Washington should take a path that lines it up with Oregon and California in a huge economic region that creates momentum for national action. But waiting for our Legislature to change its position on cap and trade may take years.

I-732 offers a chance to move sooner. Without new policies, our state will fall short of targets require the state to reduce emissions to 1990 levels by 2020.

The initiative is to the Legislature gives sponsors until Jan. 1 to collect at least 246,372 valid voter signatures to send it to lawmakers for consideration. If it gets that far and lawmakers do not adopt it, it would go to the November 2016 statewide ballot; legislators could offer an alternative.

So far I-732 is the only horse in the race, so we recommend support for it. It can be debated in the Legislature in January. It’s time to put a price on carbon pollution.