Wash. carbon tax goes down in flames

Source: Benjamin Storrow, E&E reporter • Posted: Thursday, November 10, 2016

Voters in Washington state rejected a proposal to implement America’s first carbon tax by a wide margin on Election Day, in a stinging rebuke to climate hawks seeking a breakthrough in one of the country’s most environmentally conscious states.

The result left carbon-tax supporters to pick up the pieces following a bruising campaign that divided the state’s environmentalists and local Democrats, many of whom questioned the plan’s fiscal impact and lack of funding for renewables.

Supporters sought to frame the loss in a positive light. CarbonWA, the group behind the proposal, lacked much of the traditional campaign that accompanies ballot initiatives. It nonetheless succeeded in collecting 360,000 signatures to place the question before voters and took a lead in several polls leading up to Election Day.

Still, they were forced to concede that many voters remained unconvinced by plans to tax carbon.

“The underlying challenge we continue to face is that there are a lot of folks who don’t have that sense of urgency,” said Yoram Bauman, an economist who helped author the plan.

With 60 percent of precincts reporting, roughly 59 percent of Washington voters had cast a ballot opposed the measure; 41 percent supported it.

Initiative 732, as the proposal was officially known, would have placed a $25-per-ton price on carbon starting in 2018 that would have increased by 3.5 percent annually until topping out at $100 a ton by midcentury.

To compensate, it called for a cut in the state sales tax, the elimination of a tax on gross receipts for manufacturers and an annual tax refund of $1,500 for low-income families.

Supporters had hoped to attract Republicans and businesses with a promise of tackling climate without growing the government. But despite some limited successes, such support largely failed to materialize.

The Association of Washington Business led the opposition and collected around $1 million in the final weeks of the campaign, receiving contributions from Kaiser Aluminum, the American Fuel & Petrochemical Manufacturers, Puget Sound Energy and Koch Industries.

National climate hawks, including former NASA scientist James Hansen, former Energy Secretary Steven Chu and actor Leonardo DiCaprio, lent their voices in support of the proposal. They argued that the initiative could serve as a template for how to price carbon in America following years of inaction at the federal level.

Yet it was not to be. At the state level, traditional green allies spoke out against the measure. Yesterday’s loss showed that voters want solutions that include investments in clean energy, said Gregg Small, executive director of Climate Solutions, a local environmental group that declined to back the plan.

The plan also faced questions over its budgetary impact. Gov. Jay Inslee (D), who won re-election yesterday, came out against the initiative following projections that it would cost the state almost $800 million in lost revenues over six years.

Unity among greens would not have saved the plan, Small acknowledged.

“A loss by 15 percent says clearly the state wasn’t ready for this particular proposal,” he said yesterday, as the votes were still being tallied. “What is unknowable is this state ready for a proposal that cuts carbon and invests in clean energy solutions.”

He then added glumly, “I think we just don’t know what this country is ready for, to be perfectly honest with you.”

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