Let's Discuss Carbon Pollution and Economic policy for the State of Washington, and for America, and then for the World ...
Smart Economic and Environmental Policy ripples forward.
Dr Kroko will lead a Town Hall Discussion as a Talk on How "Washington State Carbon Plans can Reduce Global Warming leveraging the Power of Capitalism"
Now that Climate action on Governor Inslee's 2015 climate legislation to help Washington continue its transition toward energy independence, reduce carbon pollution and meet our statutory greenhouse gas limits (SB 5283 / HB 1314) is officially DEAD AND BURIED in Olympia, we have to look elsewhere for Leadership on the issues of our Environment, our Economy, and global Climate Change.
The Environmental Parliament seeks to discuss all new proposals for Policy Reform, and advances those in front of everyone who cares to lead and Make a Change in the World and in their own Community.
There is no reason that Capitalism and market forces and the generic economic tools of Capitalism, cannot be used to help the environment the same way they made ExxonMobil $32 billion in profit last year, or Shell $67 Billion in profits, and similar growth in BP and Chevron and all other fossil fuel companies.
The obvious application of this strategy is in trying to reduce carbon emissions in America.
The market forces to be harnessed include taxing carbon emissions outright or putting in a Cap&Trade system on the emissions. By making carbon more expensive, presumably pollution would fall. By refunding the money back to taxpayers, presumably the economy would take no hit. Economist Dr. Yoram Bauman, puts it this way – “Tax what we burn, not what we earn.”
Bauman, the world’s first stand-up economist, puts complex economic theory into highly understandable and enjoyable cartoons and stand-up comedy gigs, some of which are shown here from his Cartoon Introduction to Climate Change to explain carbon pricing.
But can this idea of socially-responsible Capitalism be implemented?
Governor Jay Inslee of the State of Washington thinks so. He has proposed a carbon pricing scheme that embraces various market and regulatory mechanisms to incentivize a low-carbon economy in the state, essentially a variation of Cap & Trade.
Initiated with Inslee’s Executive Order 14-04, the Carbon Pollution Accountability Act would “set an annual limit on the total amount of carbon pollution that emitters may release into the air. Major emitters will need to purchase ‘allowances’ for the pollution they emit. Each year, the number of available allowances will decline to ensure emissions are gradually reduced. This provides emitters the time to adjust and make choices about how to manage their business. They can either invest in cleaner technology and improve their operation efficiency or pay for allowances that will diminish in supply and increase in cost over time.”
The program should generate $1 billion annually which will then be used for transportation, education and disadvantaged communities. Inslee’s proposal was based on research and recommendations of his Carbon Emissions Reduction Taskforce, which included representatives from business, labor, health care, utilities, at-risk communities, environmentalists and governments.
Washington State is probably the best state to experiment with carbon pricing. The state is already the least carbon-intensive state in the union with over 90% of its electricity coming from hydro, nuclear and wind. With the planned retirement of the state’s only coal-fired power plant, Washington’s carbon emissions are completely dominated by the transportation sector, which is a perfect target for this carbon strategy.
There is precedence for the Governor’s optimism about this plan. California to the south has a carbon Cap&Trade system, as do the east coast states of the Regional Greenhouse Gas Initiative. But the big winner has been British Columbia, Washington’s neighbor to the north. They instituted a carbon tax several years ago that appears to be working just fine (BC’s Carbon Tax).
There are many nuances to the pricing of carbon. Should it be an outright tax? Should it be a Cap&Trade scheme (that worked well to reduce acid rain in the 1990s)? Should it be revenue-neutral so few feel any economic pain? Or should the revenue go to support our poorly-funded areas of education, infrastructure, transportation or research, as the Governor is proposing?
All of these strategies produce positive outcomes. Instead, the real question is how to get a bipartisan carbon-pricing plan through divided legislatures, like the one in WA State. To do that, you have to attract conservative support. Not by pushing the same old Teddy-type conservation appeal to a Republican Party having nothing left of its original roots, but by appealing to “deeply held values of individual liberty, innovation, the power of markets and constitutionally limited government” (Brendon Steele).
In this manner, a revenue-neutral scheme is more appealing than a straight tax. Revenue-neutrality simply means that the tax revenues are returned to citizens, either by lowering taxes or giving a dividend check to all taxpayers. The average person would pay a few hundred dollars a year more for fossil fuels and a few hundred dollars a year less for everything else.
And with the normal volatility of gasoline prices, no one would even notice. Just this year, gasoline prices in Washington State rose 70¢/gallon from February to July, many times the amount that any carbon tax would cause. Even more, the recent extreme drop in gasoline prices caused by the battle between Saudi Arabia and U.S. oil shale companies dwarfs any possible effects of a carbon tax.
However, the distrust between political parties in the United States is so bad that we can’t pass legislation that we already agree on. In fact, I’m not sure anything like this can pass without being a citizen’s referendum or a ballot initiative.
Enter Carbon Washington. They’re proposing a ballot initiative, that is a revenue-neutral carbon tax that:
- institutes a carbon tax of $25 per metric ton CO2 on fossil fuels consumed in the state
- reduces the state sales tax by one full percentage point
- funds the Working Families Rebate to provide up to $1500 a year for 400,000 low-income working households
- eliminates the Business&Occupation tax for manufacturers
In March they’re filing the initiative to the Legislature. If they get the signatures and lawmakers don’t act on their own, the initiative would be on the ballot in 2016.
It might pass if everyone understands just what it is.
And what it can do.
Let's Discuss this and See where we go from here...