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.