Seattle Met and PubliCola won’t be doing election endorsements this time, but I hope you listen to the discussion I participated in on KUOW’s Week in Review about I-732, the carbon tax. (Go the 9:20 mark.)
While a tax on carbon has been a longstanding goal of progressives, this version misses the point. Rather than using the revenue, as I-732 would do, as an offset on sales taxes, the idea of a carbon tax should be to raise costs on polluters and use the money to support a shift to a green economy. By way of analogy, raising prices on parking doesn’t get people out of their cars if you don’t simultaneously do things such as improve transit service.
Any plan to tackle climate change, in other words, needs to take a comprehensive approach to the system it’s trying to reform.
Increasing costs on carbon through a tax will simply allow polluters to pass the cost on to people who drive—and for poor people, that leaves them stuck; gas is not an “elastic” commodity unless people have other options.
An actual cap and trade system like Governor Jay Inslee proposed actually sticks polluters with the costs because by literally and iteratively capping carbon production—forcing companies that pollute to trade carbon back and forth like the hot potato that it is—big oil ends up eating the cost. And, if the money is earmarked appropriately, policy makers can fund solutions. Certainly, taxing carbon could incentivize the free market to invest in green technology. But with government resources in the game, the public can set measurable and required results.
It’s also short sighted for green progressives to sign off on spending carbon tax revenues on a sales tax reduction. In a state budgeting system that is increasingly forced to justify taxes with a logical nexus between the tax and the line item (spending cigarette taxes on health care , for example), environmentalists shouldn’t squander something as clear cut as a carbon tax when funding green policy choices like more mass transit is going to become so important in the future.
As for sales taxes, progressives shouldn’t cede the tax reform issue by giving up on a top agenda item like green upgrades. Squandering something as elegant as a carbon tax on something that takes their eyes off two important progressive reforms— actual tax reform and investments in the green economy—perversely, removes two key agenda items from the urgent column.
At a larger level, without passing the benefits on to the public, and specifically, to poor people who are hit hardest by the both climate change itself and some band aid tax that pretends to deal with it, I-732 will simply codify the inequity that’s already embedded in our fossil fuel economy.