Carbon tax may well be in our future

As we say farewell to 2015, we wish we could also say farewell to some of the climate change denial that has paralyzed action in both Washingtons.

A good sign in this Washington is that a citizens’ group, Carbon Washington, reports it collected more than 357,000 voter signatures in favor of Initiative 732, which proposes to phase in a $25 per ton tax on the carbon content of products such as gasoline, over two years. The tax would grow thereafter until it reaches a cap of $100 in a bid to discourage use of fossil fuels that cause global warming.

The initiative pairs the new carbon tax with a one cent reduction in the state sales tax, virtual elimination of business and occupation taxes on manufacturers, and funding of an annual tax rebate for low-income families. All that is intended to balance out, and to be revenue neutral.

Importantly, I-732 marks a potential breakthrough in moving a badly needed policy past a divided Legislature and to the ballot. If I-732 sponsors turn in signatures as they announced they would today (Dec. 30), the measure will go to the Legislature for consideration in 2016. If lawmakers choose not to adopt it, I-732 automatically would go to the November 2016 ballot.

Unfortunately, the initiative is not perfect, and it may not live up to sponsors’ claims of being revenue neutral. A nonpartisan legislative analysis reported this week by the Seattle Times concluded that it might reduce state revenues by a net $675 million over its first four years. This is an unacceptable outcome, if true, at a time the state is struggling to find enough revenue to fund its K-12 school system.

I-732 sponsor Yoram Bauman, an economist, says the analysis is incomplete and he believes further study will show I-732 breaks even or close to even.

Clearly further analysis is needed to resolve this dispute. Unfortunately, there is little time for further objective review ahead of Friday’s deadline for turning in signatures.

It’s a moment of truth for Bauman. If he turns in signatures today as he’s said he intends, lawmakers may have to craft an alternative for the ballot that fixes any budget impact problem, perhaps by reducing the size of I-732’s other tax reductions or rebates.

Gov. Jay Inslee has proposed a cap-and-trade system, which state Senate Republicans have flatly rejected.

Because of that resistance, the governor has asked the Department of Ecology to seek a regulatory cap on carbon emissions that could affect some 100 or more of the largest carbon dioxide emitters in the state, including smelters and power plants. Inslee has said that a cap — slowly reduced over time, like one in place in California — is needed to ensure emissions are driven down.

In recognition that an end run around the Washington Legislature was needed to get any action, some environmental groups and allies have been working behind the scenes for months on an alternative to I-732 that likely would impose a cap-and-trade system. We look forward to seeing it unveiled in the next month.

Many in the business community tout Washington’s relatively clean power supply and the value of voluntary actions by individuals to switch to cleaner fuels, but no business plan has been proven to get results like the carbon tax has.

Whatever route the state takes, a price on carbon is needed to discourage the use of fossil fuels that are unofficially subsidized by not having their impacts on climate and the environment factored into their price.