Initiative 732 is a proposed carbon tax that would enact a steadily increasing, $25 to $100 fee on each metric ton of carbon emissions produced by Washington industries. Furthermore, I-732 is supposed to be “revenue-neutral,” meaning that other taxes within the state would be cut when this tax is implemented, resulting in neither an overall increase nor decrease in state revenue.
Overall this measure is poorly written and fraught with a multitude of problems. It punishes producers, displaces family wage jobs, and actually harms the environment, according to many analysts. Let’s take a brief look at the issues.
Whatcom County is an important industrial leader, and thousands of living wage jobs are dependent on companies such as Alcoa, British Petroleum, and ConocoPhillips. Last year, Alcoa was forced to drastically cut operations due to ballooning costs, and the situation remains fragile for other Whatcom industries as well. Under I-732, the cost to the Intalco plant at the minimum $25/ton tax rate would be $3.8 million dollars per year. At a higher rate of $100/ton, that cost would be over $15 million dollars!(1) That’s enough money to pay roughly 300 employees a family wage at the Intalco plant alone!
With so many family wage jobs hanging in the precipice, I-732 is the last thing that Whatcom residents need.
Second, there’s an important concept called leakage. Leakage is economic jargon for what happens when the success of an environmental policy is built around a tax increase. In these cases, industries shut down and move production overseas, or to states with lower taxes. It is a lose-lose scenario where the result is negative effect on the environment as carbon “leaks” elsewhere, and a loss of jobs here at home.(2) Not good for anyone. In fact, British Columbia enacted a very similar tax in 2008, with dismal results. Even The Huffington Post reported that B.C. would fail to meet its 2020 greenhouse gas reduction targets. Do you ever wonder why fuel is so expensive in Canada? Well, here’s the answer.
These industries provide an important local tax base. Each year, millions of dollars from these companies help fund our schools, emergency services, law enforcement and infrastructure. Additional state carbon taxes could be the straw that breaks the camel’s back, resulting in a funding crisis for Whatcom County if these companies are forced to cut operations.
Even Environmentalists Can’t Agree
Finally, I-732 is so fraught with problems that even progressive environmentalist organizations can’t agree on it. For example, the Sierra Club is asking its members to vote “NO” because they don’t think it goes far enough. Climate Solutions.org advocates a “NO” vote since I-732 proposes no green alternatives, and simply leaves our economy high and dry.
The answer is clear: No matter what side of the political aisle they’re on, Whatcom voters should flatly reject Initiative 732 in November.
(1) Assuming 151,867 tons of CO2/year; based on estimates from the Washington Policy Center, 2015.
(2) “International Trade and Carbon Leakage”; Congressional Budget Office, December 2013.