Carbon “fee” initiative filed for November ballot. Revenues to be directed to developing a “low-carbon economy.”

Within hours of the announcement that the Legislature was not going to pass a carbon tax this session, a group filed an initiative (as yet unnumbered, it was filed March 2 at 3:32 p.m.) that will put a price on carbon. The Seattle Times reports,

An initiative filed Friday would create an escalating Washington carbon “fee” on fossil fuels, and invest the revenue in clean energy, clean water, forests and other projects that seek to slow or help cope with climate change.

The initiative was filed with the Secretary of State one day after a carbon-tax bill died in the Legislature. It is backed by the Alliance for Jobs and Clean Energy, a coalition of labor, environmental and tribal groups that are hoping their measure can make it onto the November election ballot.

“This is the broadest coalition I have been involved with in my over 30 years of work,” said Jeff Johnson, president of the Washington State Labor Council. “And I will be going all around the state over the next two months talking to unions about this.”

Johnson tells the Times that establishing a “fee” rather than a tax allows the revenues to be tied to programs that will help “create a low-carbon economy.” Frankly, we’re not sure how that would work; undoubtedly, there will be a lot more analysis in the coming weeks. The Times reports,

The fee would start at $15 a metric ton of carbon, which would add an estimated 14 cents to the cost of a gallon of gasoline, and rise annually by $2 plus the rate of inflation.

Initiative 732, defeated by the voters in 2016, also would have initiated a $15 per metric ton tax in 2017, rising to $25  in 2018. The Washington Research Council analysis of the initiative stated that at $25 per metric ton I-732 would have raised the price of gasoline by 22.2 cents per gallon. That measure was designed to be revenue neutral. In a January 2015 Seattle Times op-ed, proponents wrote,

Our carbon tax would make fossil fuels more expensive. The carbon tax would phase in to a rate of $25 per ton of CO2 (a bit less than the $30 rate in B.C.) and then increase slowly over time to maintain revenue neutrality and incentivize additional emissions reductions. For context, $25 per ton of CO2 is roughly equal to 25 cents per gallon of gasoline at the pump or 2.5 cents per kilowatt hour of coal-fired power.

The resulting revenue would be “recycled” into offsetting tax reductions. About 75 percent would go toward a 1 percent reduction in the state sales tax that would benefit households and businesses across the state (a household making $45,000 a year is likely to save almost $200 annually). Our proposal also would fund the Working Families Tax Rebate for low-income households and effectively eliminate the B&O tax for manufacturing.

The group backing the carbon fee includes many who opposed the 2016 initiative, largely because of the revenue-neutral approach taken by I-732.

It is no surprise, then, that the alliance’s core objection to I-732 is that it is revenue-neutral — it surrenders all that precious revenue, which is so hard to come by in Washington. That, more than anything else, explains why alliance groups are not supporting it.

Their calculus is simple: Properly dealing with climate change requires lots of investment, and if a price on carbon doesn’t fund that investment, what will?

The proposed carbon fee is their answer. According to the Times, proponents of the new initiative recognize that the fee may threaten some Washington businesses and consumers.

The 57-page initiative carves out exemptions for some trade-sensitive industries, such as aluminum producers who face foreign competition…

Utilities also could gain credits for certain types of investments.

But creating a fee does not allow rebates or exemptions for low-income residents, Johnson said. Instead, low income residents could benefit from new investments in their communities for conservation, solar, clean-energy, job training and other efforts, he said.

Backers have until July 6 to get the 259,622 signatures required to make the November ballot.