The state of Washington has a well-deserved reputation for environmental activism and progressivism. The state’s current governor, Jay Inslee, has made fighting climate change one of his signature issues. On Tuesday, Washington voters will have a chance to keep with this spirit and approve a carbon tax, which would be a first in the U.S. and is widely considered to be one of the best ways to fight climate change without renovating entire portions of the economy.
Yet the carbon-tax measure has, according to polls late last month, only barely won over a majority of voters, with the opposition led by, of all people, environmentalists. And another poll, released a few days later, was less sanguine. The contested initiative, I-732, would introduce a tax on carbon emissions that grows steeper over time (from $15 per metric ton of carbon dioxide emitted in the first year to $25 per metric ton in the second, with a 3.5 percent increase each year after that), in the hopes of incentivizing people and companies to use less fuel and energy. But the initiative has been met with a mixed response by traditional environmental groups: The Sierra Club declined to endorse the measure, and the Washington Environmental Council advised its members to vote no.
From a distance, the left’s reaction to I-732 seems incomprehensible. The environmental movement has, over the last couple decades, reorganized itself to lead the fight against climate change, and I-732 represents a chance to implement a policy that would directly reduce emissions. A carbon tax is many economists’ preferred way of addressing climate change, and, while test cases are few and far between, a similar tax in the Canadian province of British Columbia in 2008 managed to cut emissions without hampering growth. On top of that, the passing of a carbon tax in one state could, as is many environmentalists’ goal, spark similar policies elsewhere.
So why is it that in one of the states with the most progressive environmental records, one of the simplest ways of fighting climate change would not just have trouble getting approved, but also face criticism from large numbers of environmentalists?
Part of the problem has to do with local political rivalries. The same environmental groups that oppose I-732 were working on their own carbon-pricing proposal as recently as last year. Liberals formed the Alliance for Jobs and Clean Energy and started lobbying for the cap-and-trade bill Governor Inslee had proposed in the legislature. When those efforts failed, these groups considered running their own campaign for cap and trade.
But those efforts were in competition with I-732. Yoram Bauman, an economist and the author of I-732, was working to gin up support for his proposal while the Alliance lobbied the legislature. He formed a campaign, Carbon Washington, and started to gather signatures for an initiative. In 2015, while Carbon Washington was gathering signatures, the two camps met to try and combine their efforts, and Carbon Washington contacted Alliance groups with the goal of gaining their approval for I-732. However, Carbon Washington wasn’t willing to alter its proposal. Alliance members were frustrated that Carbon Washington refused to consider changes that would have put funds raised by the carbon tax toward new programs; they wanted spending on transportation, housing, and green energy. Ultimately, both sides accused the other of placing rigid ideology over progress.
(If I-732 fails, the Alliance for Jobs and Clean Energy might propose an initiative in 2018 involving cap-and-trade, its preferred carbon-pricing policy, if its legislative efforts prove unsuccessful. If I-732 passes, the Alliance plans to come up with a new cap-and-trade strategy.)
Political resentments are probably no small part of the story, but environmentalists’ rejection of the policy is also rooted in two issues that Washingtonians were already arguing about well before they were talking about I-732. The first political sore point the initiative touches on is Washington’s tax code, which does not include a state income tax. Instead, the state’s major revenue source is a sales tax, which pays for around half of the state’s general fund, which covers the costs of education, infrastructure, and other basics. Progressives in Washington have argued for years that the state’s tax system is unfair and exacerbates inequality. Indeed, according to a 2015 report by the nonpartisan Institute on Taxation and Economic Policy, the poorest 20 percent of Washingtonians (who make $21,000 per year or less) pay roughly 16.8 percent of their income in taxes every year; the top 1 percent, by comparison, pay around 2.4 percent of their income.
It’s not clear how I-732 would affect that problem. Proponents say that by cutting the sales tax and funding a low-income tax credit, poor Washingtonians will get a better deal than they do now. Opponents have a number of critiques: They say that the low-income tax credit isn’t substantial—it’s only about $1,500 per year, which isn’t much for even the poorest households. It also would come around once per year, which wouldn’t help with ongoing expenses like rent, food, and transportation. They are also concerned that the tax will affect low-income Washingtonians as much as it affects industry; about half of total emissions come from transportation. For the working poor, who often don’t have access to reliable transit and don’t have the ability to work from home, increased fuel prices might wipe out whatever sales-tax savings they might enjoy. Finally, opponents are concerned that Carbon Washington’s rosy projections of the carbon-tax receipts won’t come to bear; after all, as Carbon Washington itself proudly pointed out, a carbon tax as aggressive as I-732 has not been attempted anywhere.
Additionally, while it may seem strange to hear liberals worry about too much spending, in Washington it’s a serious problem: The current tax system hardly collects enough revenue to keep the lights on. The next two-year budget, which will begin in 2017, has a $500 million shortage that still hasn’t been addressed. That deficit has far-reaching impacts, most notably in education: The Washington Supreme Court ruled in 2012 that the legislature had not met its obligation under the state constitution to fund basic education fully, and in 2015 held state legislators in contempt of court for failing to fix the problem. The state’s lackluster education spending is most detrimental to poorer districts—those with low property values, which cannot come up with the needed funds on their own—and disproportionately hurts people of color.
So, pointing to a projection by the state’s Office of Financial Management (a nonpolitical agency similar to the federal Office of Management and Budget) that Washington’s general fund could lose nearly $800 million in the six years after instating the carbon tax, progressives argue that it could spur cuts to the services that poor and working-class people depend on.
Carbon Washington, meanwhile, estimates that the tax could actually bring in a modest revenue increase of roughly $164 million. It’s difficult to discern the accuracy of the projections; Carbon Washington has repeatedly criticized the Office of Financial Management’s estimate. The Sightline Institute, a Seattle-based think tank that Bauman happens to have worked at, developed its own revenue estimate that more or less agrees with Carbon Washington’s assessment.
Perhaps the larger point is that when progressives worry about how I-732 would fit into the existing tax code, what they’re really worrying about is the fact that the initiative is reducing other taxes—it would cut the sales tax from 6.5 percent to 5.5 percent—to offset the addition of a carbon tax. They’d much prefer a policy that would help close the budget deficit and use state funds to make energy, housing, and transportation greener. So, in their mind, I-732 sells out their interests in the hopes of potentially winning over more-conservative voters; but given that only three Republican elected officials have endorsed the initiative, it’s not clear that this tactic has paid off.
And Bauman certainly didn’t help his cause when he argued that Republicans’ obstructionism is a lesser obstacle to climate-change action than liberals’ “unyielding desire to tie everything to big government.” Bauman has managed at various times to inflame the arguments over I-732, but he does bring up a good point, one that the economist Greg Mankiw made in a 2015 article in a more measured way. “To be sure, a person can favor both a more environmentally friendly tax policy and greater government spending,” Mankiw wrote. “But there is no good reason to marry these policies. If the goal is to build a political consensus to tackle climate change, there is good reason not to.”
Progressives’ second, somewhat related, complaint about I-732 has to do with the inclusivity of the environmental movement. Since it emerged a half-century ago, the movement’s advocacy groups have tended to be staffed by white and middle- and upper-class workers, and made appeals to people like themselves. There’s a perception among activists of color that environmentalists don’t make communities of color a high priority, despite the fact that pollution and climate change tend to disproportionately impact poor people of color.
In recent years, some old-guard environmentalist groups have tried to reshape their priorities to appeal to communities of color. A 2014 report prompted many environmental organizations to set diversity goals in their hiring and solicit more input from communities of color. Organizations in the northwest in particular have made some progress on these fronts. Recently, traditional environmental groups have successfully collaborated with local tribal governments to block the construction of coal-export terminals on Puget Sound, and led efforts on the national level to get underprivileged youth into the outdoors.
To racial-justice advocates and the groups that tried to address their criticisms, I-732 seems like a step backwards. Activists of color have pointed out that climate change and pollution disproportionately impact communities of color, and argued that those communities have a right to play a major role in shaping Washington’s climate-change policy. Activists of color have said that they feel insulted by I-732’s communications, which prominently feature a lot of brown faces, despite the campaign’s failure to secure support from prominent groups led by people of color. In fact, some of those same groups say that the architects of I-732 spurned their advice, just like the environmental movement as a whole so often did.
“We felt tokenized by their dismissal of our climate-policy priorities and insistence that we ought to support their effort without any respect for our views,” says Ellicott Dandy of the immigrant-rights group OneAmerica, which lobbies the legislature and local governments on environmental policy, among other issues. Bauman, I-732’s public face, hasn’t helped that perception. He has complained of “a willingness to use race and class as political weapons,” and many environmentalists blame that mindset, in part, for the failure of the negotiations.
There are plenty of reasons that many Washington liberals consider the carbon tax to be unwise policy. And of course no small part of their opposition to I-732 comes from the initiative's origins outside the legislature and the Democratic coalition—the measure is genuinely grassroots, and does not have the election-season fundraising and the full-throated party backing that liberal initiatives typically enjoy.
Some liberals outside the environmental movement have suggested that I-732’s opponents are making the classic progressive mistake: waiting for the ideal policy instead of taking the small steps that can be transformative over time. It’s the same argument that consumed the Democratic primary, when Hillary Clinton’s alleged incrementalism went up against Bernie Sanders’ so-called political revolution.
But I-732’s opponents have rejected that framing. They think that the initiative is bad policy, plain and simple. Washington might be the perfect place, politically, for initiating action on climate change. That’s not to say other states—with other tax codes, other advocacy groups—couldn’t do so. But if Washington can’t get it right, what state can?