Sunday, October 07, 2018

A Green New Deal Is on the Ballot in Washington State this Year - By David Roberts

With the federal government AWOL on climate change, another state steps up.

 Seattle (Credit: Shutterstock) Click to enlarge.
This November, for the second major election in a row, citizens of Washington will vote on a ballot initiative that would put a price on carbon emissions (among many other things).  The first such ballot initiative, in 2016, failed, part of a long series of failures of climate policy in the state.

This year’s effort hopes to ride the electoral blue wave and break Washington’s climate losing streak.  If it passes, Washington will take its place as a part of a growing West Coast climate vanguard, alongside California and Oregon, representing close to 20 percent of the US economy.  If it fails, it will not only be a crushing blow to an already battered state climate community, but it will cast doubt on the larger states-will-save-us narrative, which is just about the only narrative US climate hawks have left.

To understand the climate policy at stake in Washington in 2018, it helps to contrast it to the one that went down to defeat in 2016.

That ballot initiative was called I-732.  (I wrote a long story about it, if you want the full drama.)  It’s a complicated tale, and a bit of a Rashomon situation among state climate hawks, but what’s clear is that the coalition behind 1631 is attempting to do just about everything, from politics to policy, the opposite way.

732 was a “revenue neutral” carbon tax, which means all the revenue raised by the tax would have been automatically returned as cuts in other taxes; the government would receive no new discretionary revenue to spend on carbon reductions or anything else.  This is a longtime favorite climate policy among economists and wonks.  It “taxes bads” and reduces distortionary taxes at once, all with no net increase in taxes, thus improving economic efficiency (at least in economists’ models).

The tax would have started at $15 per ton in 2017, rising to $25 per ton in 2018, and then rising every year thereafter at 3.5 percent plus inflation, topping out at $100 a ton (in 2016 dollars).

By contrast, 1631’s carbon fee would start at $15 per ton in 2020 and rise $2 a year (plus inflation) until 2035, where it would reach, depending on inflation, around $55.  As long as the state is on track to hit its carbon targets, that’s where it will stay.

In a great explainer at the Northwest sustainability think tank Sightline, Kristin Eberhard and David Van’t Hof offer a helpful way to think about the difference:  Through the 2020s, 732 would have had carbon emissions in the state in the $30s to $40s; 1631 will have it in the $20s to $30s.

1631’s lower carbon price means that it will rely a great deal on investment of the carbon revenue to achieve similar emission reductions.

“Frankly, this is an investment vehicle much more than a price signal,” says Washington Gov. Jay Inslee, who has publicly backed, and is raising money for, 1631.  “It’s a relatively low price signal, well below the real social cost of carbon.  But you get the [carbon] savings from the investment side.  We’ve modeled that, and I feel very confident it will work.”

Supporters say reductions are locked in by regular state planning and review.  “Carbon reduction investments and the price are tied to current state emissions reduction targets of roughly 25 million tons per year by 2035,” says Becky Kelley, president of the Washington Environmental Council.

Still, it’s a big bet to make on an investment-centric strategy.

Read more at A Green New Deal Is on the Ballot in Washington State this Year

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