Washington State Is About To Vote On First US Carbon Tax


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Andrew Follett Energy and Science Reporter
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Washington state residents are about to decide if they want to enact the first tax on carbon dioxide (CO2) emissions in the U.S.

If passed, Initiative 732 (I-732) would tax CO2 emissions at $15 per metric ton starting in July 2017. This tax would quickly rise to $25 by 2018, then continued increasing at a rate of 3.5 percent plus inflation each year until it hits $100 per metric ton. This tax will be offset by a 1 percent reduction in the state sales tax and increased tax credits to low-income families.

Washington’s proposed carbon tax is supposed to be revenue neutral, but economists are torn over what the real-world effects of the tax would be. The carbon tax is modeled after British Columbia’s, which was implemented in 2008.

Supporters of the ballot measure claim it would ultimately increase state tax revenue by $240 to $350 million annually, but the state’s Office of Financial Management claims it would decrease state tax revenue by $200 million a year.

A green-think tank called the Sightline Institute claims a carbon tax would decrease revenue by $78 million a year, making it “very close to revenue neutral.”

Carbon tax supporters have out-raised their opponents by three-to-one as they are backed by many environmentalists including actor Leonardo DiCaprio.

What’s odd about Washington’s carbon tax measure is it has not been endorsed by national environmental groups, like, the Union of Concerned Scientists, and the Sierra Club. In fact, some environmentalists have come out against the tax.

Carbon tax opponents include the state’s Democratic Party, numerous trade groups and unions, and even Van Jones, President Barack Obama’s former green jobs czar.

“We will not stand for a climate policy that leaves struggling communities behind,” Jones said in a statement to reporters. “I-732 is a false solution that leaves a massive hole in Washington’s budget without investing anything into the state’s future success — in green jobs, clean energy, or underserved communities — and that’s why we have to stop it.”

Researchers at the libertarian Cato Institute found that carbon taxes cause considerably more economic damage than generic taxes do and disproportionately target the poor, so even a revenue-neutral carbon tax would probably reduce economic growth while doing little to fix global warming.

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