The Washington Research Council has just released a new report on Initiative 732, which would impose the nation’s first carbon tax. The six-page policy brief packs a lot of information into a concise, readable package, including a review of carbon tax theory, a description of how I-732 would be applied, and the likely impacts on emissions, energy costs and the economy.
The bottom line:
The jury is still out, it would appear, on whether a carbon tax reduces carbon emissions enough to justify its other costs – to consumers, workers, employers, and the economy overall.
Putting a large price on carbon will raise the costs of living and doing business in this state. If we go it alone, the reduction we achieve here could be offset by in- creases elsewhere. Successfully attacking the global warming problem requires the coordinated action of national govern- ments. If the U.S. is to provide leadership on global warming, that leadership must come from Washington, D.C., not Washington state.
Read the whole thing. It’s worth your time.
Economist Benjamin Zycher, with the American Enterprise Institute, also writes on the issue in a piece carrying the headline, “Washington State Initiative 732 — All cost, no benefit.“
Here is a number that those voters should keep in mind: twenty-five one-hundred-thousandths of a degree. That would be the temperature reduction by 2100 were all GHG emissions from the state of Washington eliminated immediately and permanently.
That number comes from the Environmental Protection Agency’s own climate model, used to evaluate the effects of regulatory proposals. And so regardless of what one believes about the relative warming influences of natural phenomena and manmade emissions, the carbon tax under Initiative 732 is all cost and no benefit.
He rightly points out that backers of the initiative could counter that leadership has to start somewhere, so why not in Washington? (We paraphrase.)
That question is unanswerable, which is why the proponents of the Initiative 732 carbon tax have engaged in a classic bait-and-switch: The initiative will strengthen the state economy by reducing the sales and business and occupation taxes, thus reducing the total economic distortions created by state tax policy.
It’s a short piece, and also worth reading.
Admittedly, I-732 has been hard for analysts to get a precise handle on, what with the recent discovery that the state Commerce Department initially overstated by fourfold the initiative’s effect on energy costs, the continuing questions of whether or not the initiative would be revenue neutral with respect to state finances (the state budget office forecasts a revenue loss; proponents disagree), and so on.
It’s an important issue. Thanks to the Washington Research Council and others for their work in identifying the economic and environmental impacts.