Will Washington Pass Nation's First State-Level Carbon Tax?

Steve Bloom/The Olympian via AP

Carbon Washington Campaign Organizer Ben Silesky leads a group of supporters and organization members into the Elections Office for the Washington Secretary of State in Olympia, Wash. Thursday, October 29, 2015, as they deliver signatures for Initiative 732. 

With Congress unable to pass meaningful regulations on climate, Washington state may be poised to approve the nation’s first-ever carbon tax, in what environmental advocates say could become a national model. But first, advocates will have to get past a formidable obstacle: the fossil-fuel industry.

In mid-January after a nine-month signature-gathering campaign, Washington Secretary of State Kim Wyman sent state lawmakers a ballot initiative that would attach a $15-per-ton tax on carbon emissions (which adds up to about 25 cents on a gallon of gas). The levy would gradually rise over the next 40 years.  

If the measure, dubbed Initiative 732, becomes law, Washington state would join California and a handful of Northeastern states as a national leader in carving out a path to reduce fossil-fuel emissions.

Many climate scientists, economists, and world leaders agree that pricing carbon is a critical step to avert the worst impacts of climate change. But to get it on the books, Washington state advocates will have to confront a well-organized, fossil-fuel sector that has managed to block climate regulations in the Pacific Northwest for the better part of a decade.

Supporters of the measure continue to be cautiously optimistic, but note that the odds of legislators approving the measure are low. “It’ll be an uphill battle,” says Yoram Bauman, an environmental economist and founder of Carbon Washington, the group leading the Initiative 732 campaign. If lawmakers fail to pass the plan, it heads to voters in November.  

Initiative 732 is modeled on a 2008 carbon tax implemented by the Canadian province of British Columbia that has won praise from environmentalists, economists, and most recently, The New York Times. The price of gas and home heating increased but those hikes were offset by personal income tax cuts and reductions in other levies.

Like British Columbia’s tax, Initiative 732 would offset higher gas and heating prices through tax cuts and fund a tax credit for low-income families.

In Olympia, Initiative 732 will face a GOP-controlled state senate with close ties to the fossil-fuel industry. State Senator Doug Ericksen, the Republican chair of the Energy, Environment, and Telecommunications Committee, has called the measure an “energy tax” that would force businesses to move out of state and has vowed to oppose it.

All told, fossil-fuel companies have lavished more than $20 million on Washington and Oregon over the past six years through direct donations, PAC contributions, and lobbying expenditures. And Ericksen has been one of the top statewide recipients of fossil-fuel contributions since 2009—to the tune of $27,650 in direct donations, according to a 2015 Oil Check Northwest report, an energy and politics research group.

One of the largest spenders has been the Western States Petroleum Association (WSPA), an industry group representing the region’s most powerful oil producers. WSPA has spent more than $1.9 million lobbying lawmakers and other officials over the past six years even though Washington state does not boasts much of a fossil-fuel industry: The Evergreen State relies heavily on renewable energy and nuclear power.

Yet Ericksen and his allies have taken a page out of the WSPA playbook—quite literally. In November 2014, Bloomberg Businessweek obtained a PowerPoint presentation detailing WSPA’s multi-state campaign against climate regulations. The leak caused quite a stir among climate advocates who charged that the strategy amounted an elaborate astroturfing campaign.

The campaign, which began as California moved toward passing the nation’s first binding carbon-reduction plan in 2006, involves creating groups with names like Californians for Energy Independence and Washington Consumers for Sound Fuel Policy to oppose state-level climate policies.

The 2014 presentation also detailed how phrases like “hidden gas tax” could be unleashed to make climate legislation sound less appealing. But more than a year after the scandal, many of those groups are still in operation and new ones have sprung up. 

WSPA’s efforts in California were mostly futile. After passing its landmark 2006 law, the state has pioneered the clean fuel and clean power standards that President Obama has made the centerpiece of the U.S. commitment in Paris. “A lot of the progress in Paris and in the Obama administration is attributable to creating that political will at the state level,” says K.C. Golden, a policy director at Climate Solutions, a clean energy nonprofit.

According to a 2015 Union of Concerned Scientists report, “WSPA’s tactics are clearly designed to undermine authentic public discourse.” The report added, “Even though WSPA’s efforts in California were unsuccessful, the organization has adopted a regional approach, aware that nearby states are watching California closely.”

The rapid increase in fossil-fuel spending in Washington state has coincided with lawmakers’ attempts to enact stronger climate regulations. Ericksen and his GOP allies in the legislature have repeatedly helped block climate regulations pursued by Democratic Governor Jay Inslee.

After torpedoing an ambitious cap-and-trade measure unveiled by Inslee last year, legislators threatened to divert funding for transit and bicycling projects if the governor issued an executive order mandating a statewide clean fuel standard. As with Initiative 732, Ericksen and his allies attacked both the cap-and-trade plan and the clean fuel standards as an “energy tax,” a “hidden gas tax,” and even “a tax on freedom.”

That record bodes poorly for Initiative 732 supporters, says Kristin Eberhard, a senior researcher at the Sightline Institute, a Seattle-based environmental think tank. “Governor Inslee tried to work with Republicans last year to pass a climate bill and it went nowhere,” she says. 

What WSPA wants to prevent is another successful model of state-based climate action. “If Washington state puts a price on carbon it starts to look like it’s a good idea and other states may implement it,” she says. “They want to prevent it from spreading.”

The group has plenty of allies in the legislature. The 2014 presentation praised Ericksen in particular for “protecting the environment” and effectively opposing tax increases—but he’s far from their only supporter. Along with Ericksen, some 26 senators and 46 representatives have earned lifetime voting scores of more than 80 percent from the Association of Washington Business, a group with close ties to the WSPA campaign against climate policy. That includes members of the leadership like Senate Majority Leader Mark Schoesler, President Pro Tempore Pam Roach, and House Minority Leader Daniel P. Kristiansen.

“The closest parallel I can think of is how the tobacco industry fought regulation in the '90s,” says Nick Abraham, a research fellow at the Sightline Institute. “They use a lot of the same tactics but the level is just turned up. It’s fairly unprecedented.”

WSPA has not taken an official position on Initiative 732, though Ericksen’s opposition is a good indication of where they stand, according to Abraham. WSPA did not respond to multiple requests for comment.

Advocates say a ballot initiative may be their best hope. “The legislature has proved that they’re not willing to take action on this,” says Eberhard. “But voters very much want to take action on climate.”

Meanwhile, in Washington, D.C., the last time a carbon tax looked promising was in 2010 when Congress appeared close to passing a landmark climate bill. But the legislation lost bipartisan support before a bill was introduced. Faced with gridlock on Capitol Hill today, any legislation climate advocates can steer toward passage in places like Washington state matters so much more. “The path to meaningful climate policy goes through the state houses,” says Golden.

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