With the carbon "fee" initiative—Initiative 1631—Washington could be the first state to enact a measure to combat climate change. And clearly big oil is worried.
Opponents (namely, the petroleum industry) have poured $31.6 million against I-1631, according to the state Public Disclosure Commission. In the history of the state, that's well over the fundraising record of initiative fights. BP America alone contributed more than $13 million.
Environmental activists think this could be the best chance at winning the long battle to address climate change. In 2016, a carbon tax initiative failed with 59 percent of statewide voters opposed. Attempts to lobby the state Legislature, and for governor Jay Inslee to pass similar policies, also failed. This year the I-1631 campaign has said it's done a better job of involving an array of organizations that include racial justice groups and labor.
What does it do? The initiative would fine companies reliant on fossil fuels $15 per metric ton of carbon emissions starting in January 2020, and that fine would increase by $2 every year.
How much would the state get? The state's expecting the initiative to generate $2.3 billion in its first five years, according to the Office of Financial Management. That money would mostly go toward clean energy investments.
Which companies are exempt? Marine fuels, aircraft fuels, and coal plants scheduled to close by 2025 anyway. Another exemption applies to fossil fuels and electricity sold to facilities that are highly energy-dependent and vulnerable to global competition (known as the Energy-Intensive, Trade-Exposed sector).
Could this affect me? The downside opponents like to bring up is that oil companies in return could raise gas prices, which would shift the burden onto working people (especially those in rural areas who may not have alternative public transit options). In places like Seattle—where 47 percent of commuters still drive to work alone, according to U.S. Census estimates—supporters hope that could discourage driving.
But the initiative also allows dollars to be used to ease the burden on "vulnerable populations" if there's a need.
How is this initiative not a tax? With the help of Hugh Spitzer, an attorney and University of Washington professor specialized in constitutional law, the legislation was written in a way to purposefully interpret it not as a tax, but a fee—which the state can charge for people who are "causing trouble in some way," Spitzer said. In this case, that means causing pollution.
To be considered a fee, the money collected from the initiative has to go to a special fund directly related to offsetting the burden. Money collected from the carbon fee initiative would go toward a fund to be used to reduce carbon emissions. The initiative would create a broadly defined "clean-up pollution fund"; most of the dollars would go toward "clean air and clean energy investments," one-quarter of it toward clean water and forests, and 5 percent toward "healthy communities" specified in the bill.
Okay, but could it still be considered a tax? Yes. Supporters of this initiative expect it to be challenged in court if the initiative passes. The court could decide that it's a tax, in which case the state legislature could still approve it. Opponents would hope that it could be considered a property tax, which would impose restrictions on how much it could charge; but Spitzer said it's more likely that it be treated as an excise tax.
"It'll be a challenge because people do not like to pay taxes," Spitzer said. "Especially people with a lot of money."