President-elect Donald Trump has made it clear that he wants to repeal President Barack Obama’s signature climate policies—the Clean Power Plan and the Paris Agreement on global emissions reductions. If he is successful, we will need a Plan B that the Republicans cannot obstruct. That means turning to states and cities, and in a big way.
Some have already started to think about how climate change can be fought at the state level. But there is a lot more work to be done. One of the most hotly debated ballot initiatives in 2016 was Washington’s first-of-its-kind proposal for a statewide carbon tax, known as Ballot Initiative 732 (I-732). Despite the robust debate over its merits, however, the proposal went down to defeat with only 41 percent of the vote. That was at least in part because many who support aggressive carbon taxes or other carbon pricing approaches welcomed I-732’s defeat. We were among them.
A quick review of the proposal shows why we objected. The tax side of I-732 was actually quite strong. It would have covered 85 percent of greenhouse-gas emissions in the state, and, starting at $15 per metric ton of fossil-fuel emissions in the first year, and rising to $25 per ton in the second year, the tax would have risen 3.5 percent annually thereafter, up to $100 per ton by the middle of this century. Taxable sources of emissions would have included both fossil-fuel consumption and the carbon emissions embedded in any imported energy. The tax schedule offered by I-732 appeared to be one of the most aggressive in the world at any level.
So why did we oppose it? Unfortunately, the proposal went badly wrong on the revenue side of the equation, starting with the major flaw of adopting a “revenue-neutral” stance. Revenue neutrality means that the burden of the carbon tax should be offset by other tax cuts or tax benefits. I-732 provided for hundreds of millions of dollars in tax cuts for corporations, helping to generate an estimated net revenue loss of $800 million over six fiscal years, according to the state’s Department of Revenue. That made I-732 not revenue neutral but revenue negative. Underscoring these problems, the advocacy group behind the initiative, Carbon Washington, did not seriously seek out and incorporate input from environmental and social-justice advocates and community leaders.
If I-732’s backers had sought guidance from advocates, they would have realized that the principle of revenue neutrality is deeply out of touch with the realities of both climate change and inequality. It essentially suggests that polluters don’t really need to pay for the carbon reductions, and that nothing else in the economic system really needs to change. Yet for tens of millions of Americans, and especially for people of color, climate problems are indissolubly linked to problems of racial inequity and economic exclusion. Many are doubly hard-hit by the fossil-fuel economy—disproportionately hurt by its pollution and climate impacts, yet largely excluded from its economic benefits. There is nothing neutral about the consequences of carbon pollution and economic exclusion. Therefore, policies that determine who pays for carbon pricing and other climate policies—and who benefits from such reforms—must not be neutral, either. Indeed, they should be specifically targeted for the benefit of the communities that suffer the most.