Washington State’s Carbon Tax Initiative: Lessons in getting carbon taxes via referendums

Alex Lenferna

 

Carbon WA campaign photo archive, Creative Commons

Volunteers gathering signatures for Washington’s carbon tax initiative. Credit: Carbon WA campaign photo archive, Creative Commons

 

In November 2016, Washington State voted on the first state-wide carbon tax ballot initiative – Initiative 732. The ballot was ultimately unsuccessful, securing 41% vote. The opposition to Washington’s initiative foreshadows a broader potential national divide regarding carbon pricing approaches.

I-732 would have placed a gradually rising tax on carbon emissions. To make the tax progressive, and at the same time, allay the conservative fear that a carbon tax is yet another way to raise taxes, the initiative was designed to be revenue neutral. It did so through a reduction in the (regressive) sales tax, the provision of tax credits to low income households, and a reduction in the business and occupation tax on manufacturers.

Despite proposing an aggressive carbon tax, and a major improvement to Washington’s deeply regressive tax system, which relies heavily on a sales tax , I-732 was opposed by a seemingly unlikely array of actors. Alongside the state’s largest polluters, and out-of-state fossil fuel interests, I-732 was also opposed by labor, environmental, and social justice groups. What lessons does this hold for both scholars and practioners of public administration that seek public support for new and bold policies?

Environmental Opposition

Perhaps the most surprising opposition to I-732 came from within the environmental community. Organizations, such as the Washington Environmental Council, claimed that, despite proposing one of the stronger carbon prices in the world, I-732’s carbon price was not sufficient to drive emissions reductions fast enough, partly because it did not invest in clean energy, environmental protection and responses to climate change.

While one could debate the efficacy of the carbon tax, this opposition revealed two issues: some environmental groups distrust a reliance on market mechanisms to reduce greenhouse gas emissions. Second, some want a carbon tax should be revenue positive to fund clean energy and climate adaptation. For them, seeking buy-in from businesses and conservatives through revenue neutrality is not an important political goal.

Labor Groups Opposition

Opposition to I-732 also came from the leadership of the Washington State Labor Council, which complained about insufficient investment in worker transition programs to green jobs. Interestingly, though, independent analysis by Sightline Institute, showed that fossil fuel industry workers only make up 0.1% of Washington’s job sector, many of whom are relatively well off. Their analysis suggested that I-732’s gradually phased in carbon tax  would not have had as detrimental an impact as some claims had suggested, while other analysis showed that revenue carbon tax reform could lead to overall job creation.

While ensuring a just transition for fossil fuel workers is strategically and ethically important, it raises the question about the extent to which preferences of fossil fuel workers (that form a small percentage of the workforce) should dominate the urgent need to reduce greenhouse gas emissions and the potential for creating green jobs in the low carbon economy.

Local Climate Justice

Some of the more vocal opposition against I-732 came from Front and Centered, a Washington-based coalition of environmental justice organizations. They argued that the initiative fell short of their Principles of Climate Justice, and did not adequately represent the interests of low income communities and people of color. Front and Centered’s main critiques of I-732 revolved around worries that it might turn out revenue negative, that it did not target investments directly into those communities, and that it did not properly include them in the design of the policy.

The critique of inclusion in policy design provides an important lesson for public administration: to ensure robust procedural justice and strategic coalition building it is crucial to include multiple stakeholders early on, especially those historically marginalized and most impacted. Notably absent from critiques of procedural justice around I-732 though, were how to include the voices of young people, who are set to be disproportionately impacted by climate change, and who were often the driving force behind Initiative 732.

Furthermore, the initiative would have reduced regressive taxes, pollution and climate change, all of which disproportionately impact communities of color and low income families. Perhaps recognizing this, most majority minority districts supported the initiative at the ballot, raising tricky questions regarding how the preferences of these communities were represented politically to oppose I-732. It also exposes the difficult tension between using the revenue from a carbon tax to offset its regressiveness, versus using it to for investments such as community-directed investments.

What Are Lessons For Policy Through Referendum?

I-732’s experience reveals competing visions of the purpose of a carbon tax. Should it be viewed as a new source of revenue to fund a range of projects and priorities, or should it be used to replace the existing tax structure, which favours carbon-intensive production processes, by a system that taxes fossil fuels and uses the new carbon revenues to offset existing tax revenues? Alternatively, if we are to combine such approaches, how do we navigate the difficult policy trade-offs that doing so would entail?

Ultimately, despite being designed to reach across the political aisle, most support for I-732 came from urban, minority, young and Democratic voters. Such support would likely have been higher were it not for factors such as: opposition from the left; lower voter turnout; an overcrowded ballot; and the fact that Carbon WA, the small grassroots organization behind I-732, lacked sufficient resources to educate around a first-of-its-kind initiative.

Washington’s experience demonstrates one of the major challenges facing public administrators navigating highly polarized policy issues. Efforts to reach across the aisle to create a bipartisan coalition may be opposed from those traditionally favouring climate action, while not gaining the bipartisan support hoped for.

Looking forward, exit polling suggests that future efforts at carbon pricing, perhaps with a different design, still have a chance at succeeding. Washington’s experience provides useful lessons for public administrators and climate advocates on how to navigate such a highly polarized space.


Alex Lenferna is a PhD Candidate specializing in climate justice in the University of Washington Department of Philosophy. He is also a fellow at Carbon Washington, which sponsored Initiative 732.