Washington first state to price carbon by popular vote? The obstacle course

Washington state climate advocates are aiming at a political act never before achieved on this planet, enacting a state-level price on carbon pollution by popular vote. 

Carbon Washington volunteers are on the streets seeking signatures to place I-732 on the November 2016 ballot.  It would set a $25-per-ton carbon tax. The Alliance for Jobs and Clean Energy is exploring a carbon-pricing measure for that ballot, likely by a cap-and-trade similar to California’s.  (See comments for update.)

So far the only U.S. electorate that has voted to tax its own carbon pollution is at a city level, that of the uber-liberal enclave of Boulder, Colorado.  Residents in 2006 voted to tax themselves an average of $21 annually, and renewed it in 2012. In 2010 Californians voted down an initiative to repeal their cap-and-trade.  But to this date, none of the many state, province or national carbon pricing systems has been enacted at the ballot box.  The path to this date has been through legislative and executive decision-making. 

Washington state would seem prime turf to set a precedent. Wildfires are scorching hundreds of square miles and forcing evacuation of whole towns.  Record drought threatens water supplies.  Salmon are dying by the hundreds of thousands in overheated streams.   Carbon-acidified waters are driving out the shellfish industry.  The state is on the climate chaos frontlines. 

Nonetheless, passage of any measure at a statewide level is an obstacle-laden proposition. A tsunami of opposition funding from the fossil fuel industry and its allies will greet any initiative.  (It would be a good time to own a TV station in one of the state’s major metros.)  It is also famously difficult to gain voter approval for measures that impose new taxes or fees, even when they are not directly affected, as the 2010 two-to-one whomping of I-1098’s income tax on upscale incomes demonstrated. State voters instead have a record of voting for tax cuts, as the successes of initiative entrepreneur Tim Eyman have shown.  (Though not so successful in recent years, Eyman is returning with another tax limiting measure this fall if it survives court challenges.)

CLIMATE FORCES DIVIDED

If these obstacles were not tough enough, a fractious politics creates additional hurdles. The Alliance and CarbonWA are in public and messy tensions with each other.  Attempting an unprecedented political act against industry opposition and voter skepticism would seem at a minimum to require unity among climate advocates.  Today climate forces are divided. This post looks at the roots of the struggle, tracks its unfolding chronology over recent months, and seeks to analyze what it means for ballot box success.   There is a lot of ground to cover, so please bear with a longer-than-usual post.

The split tracks back to the failure of the federal climate legislation campaign in 2010.  Very much an effort by environmental NGOs to bring the power of influential constituencies such as business to bear, the federal effort ended in dismal failure.  But by that point a more grassroots-oriented climate movement was starting to emerge.  Direct action against expansion of pipelines and other fossil fuel infrastructure was one aspect.  Another was organizing for a carbon tax by citizens skeptical of the carbon cap-and-trade system proposed in the federal bill.

In Washington economist Yoram Bauman spearheaded creation of CarbonWA, which began pushing toward a carbon tax initiative.  This set up tensions with Climate Solutions and allied groups leading federal and state legislative efforts.  Climate Solutions was pursuing what it called the West Coast Agenda, passage of cap-and-trade through Washington and Oregon statehouses as a way of kickstarting progress back to Congress at some point.  It would take a central role in forming and organizing the Alliance in early 2015 as the Washington vehicle to carry out the Agenda.  

After talking about an initiative for several years CarbonWA was urgent to move. Losing patience with a legislative process that blocked Gov. Jay Inslee’s cap-and-trade in the 2015 legislature, the group submitted I-732 as an initiative to the legislature. Group leaders say they would have pulled the initiative if the legislature had moved on the Inslee bill, even if it was not their preferred policy design. Now CarbonWA aims to return to the legislature in January with 264,000 qualified signatures to secure placement in the 2016 general election.  At this writing the campaign has garnered over 100,000, despite opposition and potential ballot measure competition from the Alliance.

“ . . . a powerful coalition that includes the state’s major green and labor groups is trying to squash the effort,” Seattle Times political reporter Jim Brunner reported in a July 26 Sunday edition story bannered across the front page, “Carbon-tax initiative divides environmentalists.” Describing CarbonWA as “scrappy, grass-roots” and “an upstart, eclectic bunch,” Brunner reported,  “I-732 backers say they’ve waited long enough for action from the political establishment and are pushing ahead.”  He quoted Bauman, “They say that there might be another measure. I feel like some of those folks have been saying that for years.”

Indeed, an Aug. 10 Seattle Times op-ed by Alliance leaders couched the ballot prospect. “Throughout the summer, the alliance will continue to explore possible climate ballot measures with the goal to file and qualify an initiative to the people in 2016,” they wrote.

Cascadia Planet broke the story about environmental group efforts against I-732 back in April.  A few weeks later tensions between the Alliance and CarbonWA appeared to ease with a joint statement, “. . . we are not currently endorsing each other’s efforts. But we have no objections to individuals or groups supporting or working with either or both groups (or making a joint endorsement). We respect each other’s efforts to build a strong movement for climate action and will stay in close contact in the months ahead as the alliance completes its research work and as Carbon Washington moves forward with its signature-gathering campaign for I-732.”

Despite that seeming accord, the rift between the groups re-emerged with a June 12 memo signed by 23 members of the the Alliance Steering Committee. It raised objections that could not be interpreted in any other way than as an effort to discourage I-732 signature gathering.  “. . . after extensive evaluation the alliance has determined we will no longer consider supporting its Initiative . . . As stated in the attached memorandum, recent polling unfortunately shows that I-732 is not winnable, and confirms that running multiple climate ballot measures in 2016 ensures across-the-board defeat.”

Pollsters reported, “just 39 percent of Washington voters back Initiative 732 when read the full and final language of the ballot question . . .The prospects for Initiative 732 look grim.” CarbonWA was presented with the results.  Bauman’s response was, “The alliance thinks the most important result from the poll they conducted last month is that initial support for the Carbon Washington proposal is under 40% (i.e., 39%); Carbon Washington thinks the most important result from that poll is that support climbs to over 60% (61% Yes, 35% No, 4% Undecided) when the proposal is explained in simple language.”

Other analysis from the pollsters raises continued questions about whether the Alliance will go ahead with its own initiative:  “Our survey explored a number of other potential ballot measure concepts, all of which started with more support than Initiative 732 – with some topping fifty and even sixty percent – though all were similarly impacted by negative messaging  . . . However, further research should help to identify an alternative ballot measure concept with sufficient initial support and durability in the face of messaging to win voter approval in 2016.”

That a ballot concept considered to be viable has not yet emerged is not due to lack of polling.  Public opinion researchers have been testing policy designs on likely voters for several years. 

In important ways the governor has already taken matters into his own hands. He issued a July 28 order for a rulemaking to impose a carbon cap by regulation, he hopes by next summer.  Based on existing state law for clean air protection, it requires no additional legislative action, though a court challenge is likely.  The Department of Ecology proceeding is geared to create a system of carbon permits that polluters could trade among themselves. Though that market may de facto set its own price, a pricing system that brings carbon revenues into state coffers will require further action. Rumors have been flying that the governor will announce his own referendum as early as September. 

COMMUNITIES OF COLOR WEIGH IN

That still leaves the problem of divided forces.  The most profound and troubling evidence of a fundamental split came 12 days after the the Alliance Steering Committee memo.  A June 24 climate justice open letter signed by leaders of eight Alliance member groups representing communities of color outright opposed I-732 on the grounds of equity and inclusiveness.  The signers represent Got Green, Puget Sound SAGE, One America, Washington Community Action Network, Asian-Pacific Islanders Coalition, El Centro de la Raza and the Latino Community Fund. 

The groups object to the way I-732 allocates carbon revenues.  The initiative is dubbed “revenue-neutral" because it recycles all carbon revenues to tax cuts and credits. The state sales tax is reduced one percent. A tax credit of up to $1,500 is funded for each of the state’s 400,000 lowest income families. The business & occupation tax on manufacturers is eliminated.  All the measures are intended to balance higher energy prices.  The theory is that if carbon revenues are recycled, people will respond to the market disincentive of higher energy costs by spending on other items. A $30/ton revenue-neutral carbon tax has appeared to reduce transportation fuel use around 10 percent in British Columbia. 

By contrast, communities of color leaders say, carbon revenues should be spent ensuring an equitable and a just transition from fossil fuels. A “Principles for Climate Justice” statement signed by the same groups last year was a clear precursor to the conflict, forecast by Cascadia Planet in a Nov. 25, 2014 post, “Climate justice in collision with revenue-neutral carbon policies?.”  

The statement read, “Racial equity must be at the center of policies that address climate change . . . Revenue . . . should be invested directly in lower-income communities, indigenous communities and communities of color so that the economic benefits outweigh the policy’s economic burdens . . . The highest priority for reinvestment must be to mitigate financial costs of implementation to communities with lower incomes. Further reduce our reliance on fossil fuels. Create clean, living wage jobs that open pathways for people with lower-incomes, people of color, and local residents to enter the green industry workforce. Enable people to live where they work with access to clean transportation, an affordable place to live, and clean and secure food sources.”

The June 24 letter echoed those statements:   “This past January we helped form an inclusive statewide coalition with a mission that includes equity, the Alliance for Jobs and Clean Energy. Our diverse coalition includes faith, families, health, labor, business, and justice communities calling for action to reduce pollution, create green jobs, and invest in communities of color and lower incomes . . . Carbon Washington’s Initiative 732, crafted without inclusive input, fails to equitably reinvest revenue from pricing carbon pollution. It relies on a flat payout using the same regressive sales tax structure that has made our state dead last in fairness.”

To be balanced, the failed Inslee climate package supported by the Alliance and its member groups fell substantially short of the “Principles for Climate Justice,” without significant funds for green jobs or renewable energy, a minimal amount for affordable housing, and a transportation funding proposal that would have devoted far more to road maintenance than transit and other auto alternatives. It is expected, though, that a measure going to a public ballot will take a different shape than one designed to pass a legislative gauntlet.

I-732 defenders have their own equity argument. The sales tax cut would balance higher energy prices, while the currently unfunded Working Families Tax Credit would tip benefits to lower-income groups. 

Bauman maintains, “. . . the household impact of the carbon tax and the sales tax reduction offset each other: most households will pay a few hundred dollars a year more for fossil fuels and a few hundred dollars a year less for everything else." 

At the same time, the Working Families Tax Credit would reduce the unfair tax burden on the 400,000 lowest income families with children. Writes Bauman, " . . . funding the Working Families Rebate at a 25% level would provide the greatest improvement to the progressivity of the Washington State tax system since the sales tax exemption on groceries was passed at the ballot in 1977.”

The question of which policy design will bring the greatest benefits to disadvantaged communities remains in debate. Nonetheless, the considerable moral authority of communities of color has been brought to bear on the issue.  The rift is real and all the more difficult to heal because it is ideological. 

PUTTING IT ALL TOGETHER

The issue between CarbonWA and the Alliance might be mapped as centrist versus center-left. 

CarbonWA and similar revenue-neutral advocates argue that measures which add new costs to grow the size of government will drive away centrist voters – Overcoming voters’ traditional aversion to voting new revenues will be overcome only if revenues are fully recycled back to them. The challenge is that skeptical voters might not believe they will really see the money.

The Alliance takes the position that just transition will require greater public sector efforts funded by carbon revenues, and that such programs will be needed to draw good voter turnout from low-income and people of color communities. The group also points out that low-income people without children will gain far less from the families tax credit.

Another way of drawing the distinction is less about ideology and more about makeup and organizing models.  

While the Alliance claims membership of 125 groups of all shapes and sizes, its core is composed of professional advocacy groups, labor unions and progressive businesses.  The Steering Committee is listed here. 

CarbonWA, though it has a skeletal campaign staff, is more a volunteer-driven outfit that has drawn in local community climate groups and organized additional local chapters.  It does have a board with several Washington state political veterans such as Bill Finkbeiner, former State Senate majority leader, and a heavy-hitter advisory board including a number of economists, who tend to like carbon taxes over cap-and-trade. The line-up is here.  The initiative is also endorsed by several figures from the progressive side of state politics including Seattle City Councilmember Nick Licata, former Mayor Mike McGinn, and former County Executive Ron Sims.    

The obvious question is whether these differing tendencies and positions can pull together by November 2016.  Can the fractures of 2015 heal by 2016? 

Some of the answers will start to arrive in fall.  CarbonWA expects most of its signatures will be gathered by the end of October.  In a practical sense, that means it must accumulate roughly twice the number of names in the last three months of the campaign as it did in the first three months to assure enough qualified signatures.  That will be a tough haul, but the campaign has built momentum and a large army of signature gatherers. 

If I-732 fails, the question will be whether this citizen energy will flow to another initiative campaign. Signature gathering for any measure announced by the Alliance or the governor this fall will take place next year. It will have money to hire paid signature gatherers, so will have less need for volunteers.  Nonetheless, without a lot of grassroots enthusiasm, it is hard to see any ballot measure surviving the deluge of fossil fuel opposition money.  Most I-732 supporters will likely vote for any carbon pricing initiative. But will the fractiousness of this year dampen enthusiasm for deeper engagement? 

If I-732 succeeds in ballot placement, the danger is that the fractures opened up in 2015 continue through until election day 2016. The best that can be done is to state the questions.  If it is the only initiative, will the controversy this year depress enthusiasm among constituencies critical for passage?  If there are dueling initiatives, will the tone of the debate be respectful or fractious? The wisest course in that scenario would be to set aside conflicts and advocate for an all-of-the-above strategy.
  

I have thought long and hard about the CarbonWA-Alliance conflict, and confess I am of divided mind.  Personally, I lean toward the kind of investments for which the “Principles for Climate Justice” call. The title of my blog post says it, “Beyond Market Fundamentalism: The Climate War Requires Public Purpose and Investment.”  Carbon frameworks that rely purely on the market-tipping effects of carbon pricing will not alone be sufficient to achieve the rapid and dramatic carbon emissions reductions for which science calls. Scientist James Hansen, who has lined out the needed reductions scenario and is also a preeminent advocate of revenue-neutral carbon taxes, himself acknowledges, “Although a carbon fee is the sine qua non for phasing out emissions, the urgency of slowing emissions also implies other needs including widespread technical cooperation in clean energy technologies.”  (See Conclusions.) In other words, Apollo Project-scale or greater funding.

At the same time, a carbon price in itself is vital and CarbonWA’s $25/ton tax is an important first step. If I-732 were enacted, it would only be the beginning.  The need for deep carbon reductions demands further steps.  Future carbon revenues beyond the $25/ton figure could conceivably be devoted to carbon-reducing investments. The important consideration is to put a stake in the ground and give citizens familiarity with carbon pricing, whether through I-732 or an alternative measure proposed by the Alliance or the governor.  To this point the I-732 campaign has been the only game in town, has built a deep-rooted network of enthusiastic volunteers, and has provided a way to spur the climate conversation at a grassroots level, engaging well over 100,000 people on the streets by now.  That kind of engagement will be needed to pass any initiative, and CarbonWA is currently generating it.

WEIGHING THE ODDS

The ultimate test is viability at the ballot box.  The bottom line question is – Can anything pass?  Is Washington capable of enacting the first state-level carbon pricing in the world by popular vote? 

The 2006 vote on I-937 provides a parallel, and leaves a troubling message.  After many years of frustration seeking to pass a renewable electricity standard in the legislature, clean energy advocates went to the ballot box to enact a requirement for a 15% new renewable energy share in the state. Running up against utility industry charges the measure would increase electrical bills, the measure squeaked by with only 51.73%. In the case of a carbon pricing measure energy costs will indisputably increase.  That is, in fact, the point. 

Two strategies are in play to overcome this hurdle. CarbonWA seeks to bring in moderates and centrist voters with its revenue-neutral policy, and is hoping they will believe it's not a bait-and-switch.  The Alliance is seeking to unify and turn out progressive constituencies with just transition funding.  While I am philosophically more in tune with the position carbon revenues should fund energy transition, I have concerns there may be some strategic hubris in the circle-the-progessive-wagons approach.  They center on the likely angle of attack opposition forces will employ.  

It is easy to see it coming – "Seattle liberals want to impose new energy taxes on you, pushing up your gas and power bills to create yet another social program."  The targets will be suburban, rural and working class voters who already feel economically stressed, are alienated from the political establishment, and do not see benefits coming their way.  The kind of voters Tim Eyman seeks to draw. It is not a pretty political reality, but it is a political reality,  

An important proxy for this is the 2014 King County Proposition 1 vote to increase transit services.  As the map of the 2012 governor’s race results below shows, pulling a large margin in King County - the dark blue patch on the east side of Puget Sound -  will be crucial to passing anything statewide.  Even with climate impacts coming to Eastern Washington, a climate measure will still get creamed there, as well as in the Republican-leaning Southwest corner of the state.  Margins in other Puget Sound and Westside counties will be narrower, so piling up a landslide victory in King County is the key to victory. 

King County Prop 1 asked voters to approve a 0.1 percent sales tax increase and a $60 annual car tab fee for 10 years. The April 2014 vote saw Seattle vote 2-1 in favor, but the measure lost by an eight-percent margin. Ben Anderstone of Progressive Strategies Northwest put together the precinct-level map below to show just what happened.  In urban areas where transit is a more viable option - such as the core of Seattle - the measure won big. It was crushed by suburban voters who could not see much of a direct benefit to them, and did not want to pay more for car tabs. Seattle was ultimately forced back to conduct its own successful transit funding vote. 

Voters not seeing their direct interest is the danger any climate ballot measure faces.  One which adds to the overall tax burden might face a steeper climb, especially if the benefits seem to be flowing elsewhere.   Of course, we all have an interest in recovering a stable climate, and perhaps the intensification of climate impacts in Washington can put a measure over the top.  The crux will be whether voters see the benefit of increasing their energy bills in order to protect the climate. 

At this point, the best that can be said is the matter is in uncertainty, and a fractured climate movement does not improve the odds.  The hope is that whatever measure or measures make it to the 2016 ballot, the movement will have re-gained sufficient unity and voters will be sufficiently motivated by climate impacts they see happening in their state and world to vote in carbon pricing. Washington state will make history if they do. But the obstacle course on the way is steep and deeply pitted.