In-person meeting this month, plus inspirational (and/or wonky) readings

Hello carbon tax friends:

• Claire Meints (who is working on and for CarbonWA this summer, starting yesterday!) has suggested a couple of possible times for an in-person meeting in Seattle, location TBD. If you'd like to participate, please email me with your preferences and constraints for one or both of the following options: Thursday 6/20 at 6:00pm or Saturday 6/22 at 3:00pm. Stay tuned for more!
• For inspiration, I recommend reading this NYT article on Citizens Climate Lobby. CCL has four active chapters in Washington State (Bainbridge, Port Orchard, Seattle, Whidbey) and continues to do great work with Congressional representatives, newspapers, &c in pushing for a federal carbon tax.
• Also worth reading is "The Journey to a Price on Carbon" from Sightline's 2012 Gratitude Report. (It's PDF pages 8-9, or numbered pages 6-7, and for the sake of full disclosure I should note that I'm a supporter of and Fellow at Sightline and have been on that journey with Sightline since 1998, when I worked with Alan Durning on the book Tax Shift.)
• On the wonky side of things, there's a new CBO report on carbon taxes. It's a good summary of the way economists think about climate change and carbon pricing and IMHO is likely to be a good preview for the Washington State study bill report that will be coming out in October. Key themes from the report are as follows, and note that the report focuses on carbon taxes but the key themes apply equally to auctioned cap-and-trade systems: (1) carbon pricing will raise the price of carbon (duh!); (2) a price of $20-$30 per ton CO2 is likely to reduce emissions by 5-10% in the short term; (3) the economic burden of a carbon tax is best offset by using the revenue to reduce existing taxes; (4) lump-sum rebates or certain other measures have the benefit of addressing regressivity but do not reduce the burden on the overall economy. ("[U]nlike using carbon tax revenue to reduce [marginal] tax rates... lump-sum payments [would] not increase people's incentives to work or invest and thus would not lead to greater economic productivity.") I would be pretty stunned if the consultants' report in October didn't reiterate these key themes.
• On a semi-personal note: My co-author Grady Klein and I are inviting feedback on rough drafts of our next book, The Cartoon Introduction to Climate Change. Follow the link if you're interested in checking it out!

May 23, 2013: Carbon tax summer!

• I'm happy to report that CarbonWA has hired its first employee! Claire Meints has been a terrific volunteer activist and she's going to spend this summer in Seattle focusing on the campaign. I've got a bunch of time to contribute to the campaign this summer also, so we should make great progress... and don't be surprised if future updates to this list-serv come from Claire :)
• On the policy front, I'm doing some research on regressivity and the state tax system and came across this recommendation to eliminate the $400m sales tax on construction labor from the 2002 Gates Commission report. The Gates report is a decade old so I don't know the current status of this issue---if you know anything please let me know---but if it's still an active issue then it might be a good element to include in our effort. Comments welcome!
• Thanks to everyone on Lopez Island for coming out to my talk last week and for joining the list-serv! As with everyone else on this list, let me know if you're ready to pledge 40 person-hours to collect 1000 signatures for the CarbonWA effort between February and June 2014, and ditto if you can contribute in other ways :)
• In news from elsewhere, the Oregon legislature is still considering various bills (including a carbon pricing study bill) and yesterday about 100 people turned out for a lobby day led by Oregon CAN, which is pushing a BC-style revenue-neutral carbon tax for Oregon. (Claire is an Oregon native and so she was there and is touch with the folks at Oregon CAN.) More generally, the year ahead is looking like it will have so much carbon pricing action on different fronts in different states that I've started to think of it as the "let a hundred flowers bloom" period. All this ferment has led to the creation of a state-level action page at carbontax.org that currently focuses on OR, NY, and WA. And Tom Steyer's keynote speech at the Climate Solutions breakfast on May 13 included an explicit call for the west coast states to "participate together in direct democracy" (i.e., ballot measures!) as a way of building towards federal action. All very exciting, so let's keep pushing forward!

April 28, 2013: Everett Herald carbon tax editorial

• A great Everett Herald editorial: It's time for a carbon tax
• Sightline's Talking Carbon Taxes, Free-Enterprise Style
• In transportation news, a modest transportation bill is heading for the Governor's desk: "Lawmakers are leaving aside for now the more contentious question of a transportation revenue package that would augment the budget. That debate is set to resume in a special session..."
• In Oregon a carbon tax study bill (SB 306) is moving forward through the legislature; here's the most recent bill language I can find. During a hearing last week "the industrial owned utilities came out against it, as did the rural electric coop, but that was all (and frankly, that was to be expected). We had good support for the study and task force bill and testimony from: Building Trades, Iberdrola, Skanska, Metro (regional gov't), Eugene Water and Electric Board, CUB [Citizens' Utility Board], Oregon Law Center (low income advocates), and Main Street Alliance (small business association)." Two other good recent articles on Oregon: Three issues to watch in Oregon's carbon tax debate and A smarter tax for Oregon, by Tom Potiowsky, Northwest Economic Research Center, PSU.
• In Europe, Paid Permits for Pollution Are Fizzling
• On the lighter side, a great (and relevant) comedy routine: David Crowe: Gasaholic

April 15, 2013: Sierra Club support, new revenue-neutral draft, and other developments

Some good developments!

• Last week I was invited to talk carbon taxes with the Conservation Committee of the Cascade Chapter of the Sierra Club. The idea of a revenue-neutral carbon tax received a vote of support (unanimous, if I recall correctly) and a task force was created to come up with recommendations for getting a carbon tax passed. Great news, stay tuned for more!
• I submitted ballot language for a revenue-neutral proposal to see what kind of ballot title would come out of it, and here's the result: "This measure would impose a greenhouse gas emissions tax on certain fossil fuels, reduce the state sales tax one percentage-point, eliminate the business and occupation tax on manufacturers, and increase certain tax credits." More details on the bill itself (PDF, Word) and on the ballot title and summary.
• Governor Inslee signed into law a study bill that will evaluate ideas like BC's carbon tax and report back in October 2013.
• A good op-ed in the Wall Street Journal from Nobel-winning economist Gary Becker and George Shultz: "Why We Support a Revenue-Neutral Carbon Tax". (Last I checked this article was not gated, although the WSJ often is.)
• We're shifting focus towards a revenue-neutral option and away from a transportation option, but as a last-ditch effort of sorts on the transportation front Clark Williams-Derry of Sightline and I wrote a post on "How To Fix the Washington Transportation Package".
• PS. Some earth day talks coming up at Edmonds Unitarian Universalist Church (Sunday April 21), Plymouth Forum at Plymouth UCC in Seattle (Sunday April 21), Seattle University (T April 23), Bellevue College (Th April 25), and Yakima (May 2). Holler if you want details or want to help out!

Mar 25, 2013: Carbon tax progress in Oregon and Washington

Preface: I've got some talks and comedy shows coming up this week in eastern Washington (Twisp, Omak, Ellensburg, Moses Lake, Walla Walla) so if you're in that neighborhood check out the details.

Amazing news continues to pour in from Oregon, where the Northwest Economic Research Center at PSU released a report on Carbon Tax and Shift: How to Make it Work for Oregon's Economy. "A carbon tax is an efficient way to reduce harmful greenhouse gas emissions — you tax what you want less of," said Tom Potiowsky, NERC’s director and professor and chair of PSU’s Department of Economics. "With a policy that uses the revenue from a carbon tax to reduce other taxes, Oregon could accelerate the process of reducing those emissions while still supporting a vibrant economy." Everybody should read this report, and not just because I helped out on it a bit. (The real heroes are the folks at PSU and at the Oregon Environmental Council.) Last week BC Environment Minister Terry Lake joined Potiowsky to testify before the Oregon Legislature, which is considering 3 carbon tax bills and a carbon tax study bill.

Good news in Washington State, too: the State Senate approved a study bill to identify cost-effective ways to reduce carbon emissions. The bill specifically includes "a review of reduction strategies being implemented... on the west coast [and] in neighboring provinces in Canada" (e.g., BC's carbon tax) and was passed by a 37-12 vote that included support from 12 Republicans. (Ten Republicans and two Democrats voted No.) The bill is very likely to pass the State House and receive the governor's signature, in which case the study itself is slate to be finished by October 15, 2013.

There's even an interesting bit of news nationally: Oregon Representative Earl Blumenauer and three colleagues from the House and Senate released draft carbon-pricing legislation and are soliciting feedback on it. The deadline for providing feedback is Friday April 12.

On the transportation front here in Washington: Transportation Issues Daily has the latest on the transportation package, including Inslee's support for taking action. In past updates I wrote that the odds of a transportation bill passing this session are low, but it's still alive and kicking, and Jim Lazar notes that "The supreme court decision (50% + 1) for taxes makes the odds MUCH higher." Unfortunately we have not had much luck after our January op-ed at getting a carbon tax injected into the transportation conversation, but we will keep trying! (If a transportation bill does pass that is road-heavy and doesn't include a carbon tax, I will personally oppose it, and I think many others on this list will also, but an informal poll of CarbonWA supporters indicated that as a group we should focus on promoting our positive agenda and not get distracted by opposing a roads-heavy transportation bill.)

On the education front here in Washington: a group of mostly Republican State Senators is trying to get $300m more for higher education, which is a top priority of the business community. "Senate leaders declined to explain how they would pay for the proposal. Lawmakers already face more than a $1 billion shortfall in the next two-year budget cycle and are separately under court order to expand funding for K-12 education." Hmm... how about a carbon tax? :)

Finally, on the revenue-neutral front: I'm writing up a revenue-neutral option, stay tuned for more on that!

Mar 5, 2013: Climate action study bill and transportation news

This week's news:

• Governor Inslee is testifying this morning (Tuesday) in favor of a climate action study bill. (At its core is a proposal for the state to commission a rigorous review of carbon reduction policies in other states and provinces.) Please contact your state legislators and encourage them to support the bill!
• In transportation news: Sightline's Eric de Place has a great post on what's wrong with the House transportation bill. That bill is still alive in Olympia but it faces increasingly long odds, including "strong voter opposition" according to a just-released Elway Poll. (The full poll results are here, and I can't help but notice a parallel with climate: the public favors action but doesn't want to pay for it.) Also worth reading is this Transportation Issues Daily post about unfair expectations regarding incoming WSDOT secretary Lynn Peterson.
• We're hoping to make more progress in the weeks ahead on the transportation front, but also on the idea of linking carbon taxes to education funding (or to a 100% revenue-neutral tax reform). Stay tuned!
• In federal news, Senators Bernie Sanders and Barbara Boxer have a tax and dividend bill that is pretty awesome (but faces daunting odds given the gridlock in DC) and Sightline's Anna Fahey has two good posts on polling and messaging: American Support for a Carbon Tax and Climate Message Essentials for All Six Americas.

Feb 25, 2013: Transportation and climate bills in BC, OR, VA, and WA

In British Columbia, the right-of-center Liberal Party decided to essentially freeze the carbon tax at its current rate of $30/ton CO2. (They are going to continue an exemption for greenhouses and seek a new exemption for farm diesel.) See pp58-63 of this budget document for details. Also very much worth a read is "A Tale of Two Taxes: The Fate of Environmental Tax Reform in Canada" by UBC professor Kathryn Harrison. You can read the abstract from the link above, email me if you're interested in seeing the whole article, which is long but worth it.

In Oregon there are four carbon tax bills under consideration. I haven't gone into the details, but if you want to then here's the bills: HB 2497 (one of two from the House Revenue Committee); HB 2792 (Energy and Environment Committee, chaired by awesome Rep Jules Bailey); HB 2874 (the other House Revenue Committee bill); and SB 537 (carbon tax study bill). Go Oregon!

In Virginia, the state legislature passed a complicated transportation bill that Republican governor Bob McDonnell supports. The best summary I've found (from the Coalition for Smarter Growth) says that the bill funds a lot of new highway construction and does so in large part by increasing the state sales tax. (It also shifts the state gas tax from a per-gallon tax to a percent tax, so the net effect of that depends on gas prices.) My take-away from this is that legislators (including Republicans) are desperate for transportation infrastructure funding and that a carbon tax would be a much better way to get it than a general sales tax.

Finally, here in Washington there are some details on Judy Clibborn's transportation package. See the links at the bottom of her press release, especially the Fact Sheet showing that half the funds go to new projects (I-5, I-90, 167, 509, 395) and only 7% goes to maintenance of the state system. That's only $631m for maintenance of the state system despite the need (identified by Connecting Washington) of $3.1 billion. (And of course Connecting Washington identified $4.9 billion in maintenance needs at the city and county levels; Clibborn's proposal provides $675m in assistance.) BTW, Sightline's Clark Williams-Derry reminds me of their estimate that each new lane-mile of urban highway creates up to 186,500 tons of CO2 over 50 years.

In somewhat happier news, last week Governor Inslee introduced a climate action study bill into both the House and Senate. At its core is a proposal for the state to commission a rigorous review of carbon reduction policies in other states and provinces. Stay tuned for more on this!

Feb 20, 2013: New transportation secretary (and bill)

Lots of news, some of it good, but we still have work to do to get carbon pricing on the front burner: 1) On the transportation front, Governor Inslee "pledged to reduce carbon emissions in the state’s transportation system" and named a new transportation secretary, Oregonian Lynn Peterson, who appears to feel similarly. It will be interesting to see how they react to the House Democrats' transportation proposal, a $10 billion package that is terribly tilted towards road expansion. In my view, the only piece of good news in the House proposal is that everybody (labor, enviros, and I'm sure business, too) wants to increase the size of the package... and a carbon tax would be a great way to do that. 2) Just in any case anybody's forgotten, the legislature also has to deal with education funding, and we're still looking for ways to inject carbon taxes into that conversation. Ideas welcome! 3) Overall, the path forward is to advance our positive vision of how carbon taxes can be used to address transportation, education, and/or tax reform, and at the same time be prepared to work in opposition to a road-heavy transportation package that will take us in the wrong direction. (As noted last time, it's unlikely that a transportation package will come out of Olympia this session, but if one does then at least it will do away with the argument about whether a carbon-tax-for-transportation-infrastructure package would be good or bad for the climate; hopefully just about everybody on this list can agree that a roads-heavy package is bad bad bad.)

Feb 17, 2013: Transportation developments: full of sound and fury...

Lots of developments on the transportation front, including a terrifying NY Times article about gas tax shortfalls nationally and (here's the terrifying part) Virginia governor Bob McDonnell's proposal to replace the gas tax with a general sales tax.

Here in Washington State, the short version (read on for the long version) is that there are lots of transportation proposals floating around Olympia but everybody seems to think that nothing will happen this year and that instead there will be a transportation package on the ballot in Nov 2014. Our job is to push for a carbon-tax-based transportation package that will reduce carbon emissions and unite business, labor, greens, and social justice advocates.

The convention wisdom about the current state of play in Olympia is captured in this City Club video from Jan 11 featuring House and Senate leaders Frank Chopp, Ed Murray, J.T. Wilcox, and Rodney Tom. The transportation discussion starts at 00:53:50, and at 01:00:00 there are answers to a carbon tax question from Chuck Lare (who sent me this link and is a member of the KC Metro Bus Drivers union, ATU 587). Here are some key quotes from these segments:

Ed Murray: I don't think this year is the year for a transportation package. But I think this is the year to begin that discussion, to look at what that package would look like.

Rodney Tom: I think the key to a transportation package is making sure we're very specific, and so I think this year is the year to put it together. I think it's important that the new governor go out and sell it. But that's how we passed it before. If you just say "We're going to have a lot of money and we're going to spend it wisely..." [that won't work.] People want to know what projects in their districts [are going to be funded.] And that's how we're going to pass it. I think we put it together this year, we put it together with specific projects in mind. I think that that's going to take up at least a year to get everybody on board and get that project sold. I think it is a key element for the governor to take leadership on that.

Rodney Tom: No matter what we do next year -- whether we pass it in the legislature, [in which case] it's going to get a referendum, or if it goes out to the people -- there will be a vote on a transportation package next November of 2014.

Ed Murray (on carbon taxes): We need to show business that a carbon tax could actually benefit them.

For anybody looking for more info on the various transportation proposals out there, here's a partial (maybe even complete?) list. Dollar figures are totals covering the next 10 years.

1. A February 14 open letter from state leaders (including Washington Conservation Voters executive director Brendon Cechovic) calls for a "comprehensive statewide transportation transportation investment and funding package that makes a significant down payment on the $50 billion need identified by the Connecting Washington Task Force." (More on Connecting Washington in #3 below.)
2. Democrats in the state House are going to unveil a $6 billion transportation proposal on Wednesday Feb 20. According to the Seattle Times, "[House Transportation Committee chair Judy] Clibborn said she expects to have backing from both business and labor for the proposal, which would include money for a wide variety of projects including a new bridge over the Columbia River, as well as funds for projects on Interstate 405 and the Interstate 90 mountain passes... She said the $6 billion figure was a starting point. “The one thing I’ve heard from everybody is they want more,” she said Tuesday.""
3. The Jan 2012 Connecting Washington task force identified $8 billion in unfunded maintenance needs ($3.1 billion at the state level, $4.9 billion for city and county roads and bridges) and $2 billion to restore transit service to 2008 levels, for a total shortfall of $10 billion, plus many tens of billions more for new capacity and other projects.
4. Outgoing Gov Gregoire's Dec 2012 "Building a Better Future" document provides a good summary of the existing situation, including unfunded needs for I-90 at Snoqualmie Pass ($390 million), North Spokane Corridor ($1.3 billion), Columbia River Crossing ($450 million or more), 520 bridge ($1.4 billion), SR 167 ($1.5 billion), SR 509 ($1.3 billion), I-405 ($1.8 billion), and I-5 near Joint Base Lewis-McChord ($820 million). Gregoire also proposed an apparently short-lived idea to impose an excise tax on motor fuels in order to raise $450 million per year to fund yellow school bus transportation programs.
5. Jay Inslee's transportation plan doesn't include a funding proposal but does include support for maintenance and for the Columbia River Crossing, SR 520, I-90, SR 509, SR 167, North Spokane Corridor, I-405, and "air access to underserved regions".
6. The Washington Roundtable wants $3.1 billion for maintenance of state infrastructure and $3.4 billion for new capacity, paid for with a 9 cent gas tax and a 0.6% motor vehicle excise tax [MVET]. (Note that their plan includes all of the $3.1 billion in unfunded state-level maintenance identified in the Connecting Washington report but none of the $4.9 billion in unfunded city- and county-level maintenance identified in that report.)
7. The AWB legislative agenda doesn't include a funding proposal but does note that "current state transportation funding sources are proving inadequate to meet current needs, address project backlogs, and build new capacity", including "critically important major projects such as I-405, SR 520, SR 167 and SR 509, I-5 at the Columbia River Crossing, the North Spokane Corridor and I-90 over the Cascade summit." AWB supports "development and adoption of a comprehensive transportation package by the 2013 legislature". Elsewhere in their agenda they indicate support for the "supermajority voe for tax increases" and opposition to "state carbon pricing policies, including carbon tax schemes", but this KUOW story on January 7 notes that "Somewhat surprisingly, [AWB president Don] Brunell doesn’t dismiss the possibility of taxing carbon as a means to pay for transportation infrastructure: “I think you have to look at the whole spectrum and if carbon tax is part of that spectrum you have to look at it,” he says."
8. The Transportation for Washington proposal, from a coalition led by Futurewise and Transportation Choices, calls for adding $3 billion in maintenance funding and $6 billion in funding for transit and other alternatives. A carbon tax is included on a list of possible funding sources.
9. Seattle mayor Mike McGinn, King County executive Dow Constantine, and the Sound Cities Association endorsed a Dec 2012 proposal under which the state would pass an 8-cent gas tax (with 65% of the proceeds going to the state and the rest to cities and counties) and would also provide localities with additional funding options such as the the ability to seek a motor vehicle excise tax of up to 1.5%. More details from this Seattle Times article.
10. The $7.6 billion December 2012 Washington State Transportation Commission proposal includes a 10-cent gas tax to fund maintenance, with the estimated $2.6 billion in revenue split between the state ($1.5 billion) and cities and counties ($1.1 billion), plus a motor vehicle excise tax of 1.5%, with the estimated $5 billion in revenue dedicated to capital projects and transit. (Localities would have the option of adding an addition 0.5% MVET.) The proposal notes that these revenues fall short of a "short list" of uncompleted projects that totals $9.5 billion and includes $400 million to finish projects from the 2001 and 2003 legislative proposals (Nickel and TPA packages), $1.4 billion for SR 520, $1.3 billion for North Spokane Corridor (US 395), $386 million for I-90 at Snoqualmie Pass, $360 million for Hwy 12, $450 million for the Columbia River Crossing, $1.2 billion for SR 509, $1.5 billion for SR 167, and $2.6 billion for I-405. The report notes that an "average driver" logs 12,000 miles a year and averages 20 miles a gallon, i.e., uses 600 gallons of gasoline a year. It also notes (based on historic data) that 57% of vehicle miles traveled are on the state system and 43% are on city and county roads, with the city/county split being 62% / 38%, and that ferries historically get 20% of WashDOT funds (with 80% going to highways).

Feb 5, 2013: Test-run initiative language

Our test-run initiative (I-1271, full text here) has now received a ballot title and summary, which are the items that appear on the ballot. (The full text appears in the voters pamphlet.)

Ballot Title: Initiative Measure No. 1271 concerns a carbon tax on fossil fuels. This measure would levy a tax on fossil fuels, based on their greenhouse gas emissions. The revenue generated would be divided equally between public investments in transportation, and tax rebates, reductions, and incentives. Should this measure be enacted into law? Yes [ ] No [ ]

Ballot Measure Summary: This measure would levy a tax, set initially at $30 per metric ton of carbon dioxide equivalent, on fossil fuels in Washington and on fossil fuels used to generate electricity imported into Washington. Half the revenue generated would be devoted to tax rebates, reductions, or incentives for low-income working families, manufacturers, certain research and development activities, and property taxes. The remaining revenue would be devoted to public investments in transit, road maintenance, and freight mobility.

FYI you can see this and other initiatives on the Secretary of State's website here. And for that matter you can submit your own initiative here.

Jan 27, 2013: WA carbon tax legislation: 1st draft

Here's the bill draft in both PDF and Word. And here's the Letter of Recommendation with comments and suggested edits from the Code Revisers Office.

A brief overview of the bill: It imposes a carbon tax of $30/ton CO2 on fossil fuels (including the carbon content of imported electricity) and puts half the funds towards tax rebates and reductions and half the funds towards public investments in transportation. The transportation investments are allocated 50% to maintenance, 25% to transit, and 25% to freight mobility projects. The tax rebates and reductions are allocated to the Working Families Rebate (similar to the Earned Income Tax Credit bump-up in many other states that benefits low-income working families), a B&O business tax reduction for manufacturers, extension of the high-tech R&D tax credits, and an across-the-board property tax rebate.

Feedback welcome, and please note that this is a very early draft... lots of work to be done! I'm excited about the prospects of putting together a coalition of business/labor/enviros/social justice to push something like this forward, so please contribute your ideas as we work on a 2nd draft! (By the way we can't formally file something for the Nov 2014 ballot until March at the earliest, so we have at least the next month to work on drafts.)

Update 2pm: A lot of good background info is at www.CarbonWA.org, especially this two-pager. And of course if you want to pledge to collect 1000 signatures (about 40 person-hours of work) please let me know!