Goals, challenges & next steps for state carbon pricing
By Flannery Winchester
Each month, Citizens’ Climate Lobby hosts an international call featuring a guest speaker to educate listeners on topics related to climate change and our Carbon Fee and Dividend proposal.
The guest speaker for January 2017 was Yoram Bauman, founder and co-chair of YesOn732.org, which spearheaded the campaign for ballot measure I-732. The measure would have put a statewide price on carbon but was defeated in November. Bauman holds a PhD in economics from the University of Washington and performs stand-up comedy, earning him the nickname “The Stand-Up Economist.” He also co-authored the 1998 book “Tax Shift,” which helped inspire the revenue-neutral carbon tax in British Columbia, and the 2012 New York Times op-ed called “The Most Sensible Tax of All.” Bauman joined our January call to discuss the achievements and lessons learned from the campaign to price carbon in Washington state.
Goals and major achievements
To begin, Bauman addressed the goals of the ballot measure I-732. “The basic outline of the policy was a carbon tax: $25 per ton of CO2 on fossil fuels burned in Washington state. The carbon tax goes up 3.5% plus inflation over time—the intent was to be revenue neutral, with most of the money going to cut the state sales tax by a full point as a way to provide benefits to households and businesses across the state. We also reduced some business taxes for manufacturers to address impacts on energy-intensive, trade-exposed businesses, and we provided an earned-income tax credit benefit for low-income households.”
Some of those policy choices were informed by the fact that the measure was just for one state, versus the national policy that CCL advocates for. For example, Bauman explained, they chose a tax reduction instead of a direct dividend because Washington state’s constitution prevents giving of public funds to people “except to the poor and infirm,” so they were concerned a dividend may have violated that. Also, there were some competitiveness concerns for manufacturers in the state—hence the tax reductions for those businesses, in lieu of a border tax adjustment as you might see in a national policy.
So however the details ultimately shake down, Bauman said, “You want to do something that’s going to provide broad benefits to businesses and households across the state. And then, I would argue, you should do something to provide extra benefits for low-income households. So I think the general outline of the 732 policy was pretty good.”
And many Washington voters agreed with that assessment—Bauman and Carbon Washington collected 360,000 signatures so this measure could even appear on the ballot, through strong grassroots organizing efforts. “We went out and beat the pavement,” Bauman said. “The participation of the CCL chapters across the state was a huge part of that.” Bauman also spread the word through his stand-up comedy. “It was helpful to have comedy as a way to draw a crowd in and connect with people.” Overall, he said, the campaign was as successful as it was because of “a lot of folks working really hard for a long time.”
Challenges along the way
“There were some specific details of the policy that created some heartburn and caused problems,” Bauman reflected. “There was a state fiscal note that came out and argued that we were revenue negative instead of revenue neutral, and that became a big political issue.”
In addition to that objection, many groups on the left, including environmental groups in the state, had their own objections to the policy in favor of their own carbon pricing plan. “We ended up taking a good bit of friendly fire,” Bauman said. “That was quite disappointing.”
There also wasn’t overwhelming enthusiasm from the right. The campaign received a handful of endorsements: three sitting Republican state senators, one former state majority leader, and Rob McKenna, a Republican who narrowly lost the governor’s race in 2012. More often than not, those on the right chose to stay neutral—which, Bauman pointed out, actually meant a lot. For example, “The Western States Petroleum Association, which represents refinery operators here in Washington state, came out officially as being neutral on 732,” Bauman said. “They refine $6 billion gallons of fossil fuels and petroleum products, and putting $10 or $20 million into an opposition campaign is not a problem for them. So the fact that a lot of them decided to stay on the sidelines was a significant accomplishment.”
Where does the campaign go from here?
Despite the challenges, the campaign offered a lot of learning opportunities and chances for self-reflection. In addition to tweaking some specific details of the policy, Bauman said, they would focus a little more on the attitude of the campaign. “Overall our campaign tried to be very friendly, but there were times when we violated that rule, where I violated that rule, and it ended up hurting us. My understanding is that CCL has a very positive attitude and tries to always say nice things about people,” Bauman said, and he aims to follow that example a little more in the future. “What you’re doing in terms of trying to stay very positive is a really good idea and is something that’s worth always keeping in the front of your mind going forward.”
And the push for carbon pricing will go forward too. Bauman mentioned that Washington’s governor, Jay Inslee, has put a carbon tax into his budget, though it’s not sure bet to get through the legislature. He also referenced an organization in Massachusetts that has a state carbon pricing network. “Especially since the election, there are a lot of folks thinking, ‘Okay, what can I do at the state level?’”
As for Bauman himself, his family will be moving to Salt Lake City this year. He’s already met with the CCL group there, who will surely have a close eye on Utah’s own carbon pricing plans for 2017.
And his advice for all of us? “Keep pluggin’ away at it!”
Hear Bauman’s full remarks on our January 2017 podcast, and follow him on Twitter at @standupecon.