Fifty supporters of I-732 attended Tuesday’s hearing on I-732 before the Senate Energy, Environment & Telecommunications Committee. About 30 of them testified in support of the measure. You can watch a replay here.
Yoram Bauman, co-chair of Carbon Washington
My name is Yoram Bauman. I am the founder and co-chair of Carbon Washington, and I have a PhD in economics from the University of Washington.
Economics teaches us that the free-market system provides a strong foundation for a prosperous society. But economics also teaches us that there are instances of market failure. The carbon pollution that contributes to climate change is one such instance, and economics teaches us that the best way to deal with it is to put a price on carbon—for example with a carbon tax—to promote conservation, innovation, and the development of new technologies. The best way to minimize the economic impact of such a tax is by “recycling” the revenue into reductions of existing taxes.
The basic theory, then, is quite simple: tax “bads” rather than “goods.”
To see how well that theory can work in reality, we need only look at our neighbor to the north, British Columbia. In 2008 the government in BC—a right-of-center government—created a $30 carbon tax and used the revenue to reduce personal and corporate income taxes. The BC carbon tax has successfully reduced emissions, the economy of BC is doing fine, and the policy is so simple and transparent it can be described in a haiku: Fossil CO2 / $30 for each ton / Revenue neutral.
That’s the inspiration for Carbon Washington and Initiative 732. The bulk of the revenue from I-732’s carbon tax goes to cut the state sales tax by a full percentage point. I-732 also funds an Earned Income Tax Credit for low-income working families, and it effectively eliminates the B&O tax on manufacturing.
I-732 was intended to be revenue-neutral, and the best available information suggests that it is. A recent fiscal note from OFM came to a different conclusion only by overlooking key aspects of I-732 and by shoehorning two years of the Working Families Rebate into the first fiscal year. I summarized this information yesterday in an op-ed in The Olympian. Copies of that analysis are available for each of you.
I am happy to discuss revenue estimates or other flash points, but I also want to emphasize issues that are not contentious. Cliff Mass gave an overview of the science of climate change: it goes back about 100 years and there is broad agreement about the basics. The economics of climate change goes back almost as far, and again there is broad agreement about the basics. The most basic of those basics is the need for a price on carbon.
As a citizen, and as a parent of an 18-month-old daughter, I think we have a moral obligation to take action on climate change. As an economist, I think we can and should take action in a way that works for our economy and for households and businesses around the state. Initiative 732 is a strong step in the right direction and I encourage you to support it. Thank you for your consideration.
Cliff Mass, Professor of Atmospheric Sciences, University of Washington
Thank you for the opportunity to speak.
I come here today to support I 732. But first, some background.
I am professor of atmospheric sciences at the University of Washington, and chairman of the College Council of the UW’s College of the Environment.
I have studied the weather and climate of our region for over 30 years and have published nearly 100 papers on these subjects. My students and I run sophisticated simulation models of our weather and climate. I have written a book on NW weather and climate.
Most important to some of you, I am a moderate on the topic of climate change, and have spoken against unfounded claims on both sides of this issue.
I have objected to claims that greenhouse gas increases have caused our snowpack to disappear, oysters to die, or is the cause of current extreme weather events, such as our record warm temperatures last summer.
And I have spoken against claims that the recent pause in warming means global warming is nonsense, or that solar variations are dominant, or that some kind of cycle will protect us against greenhouse gas warming. None of these are true.
What is true is that the best science and most sophisticated models project that increasing greenhouse gases like CO2 will greatly alter the weather and climate of our state by the second half of the century. The heaviest precipitation will become more severe, flooding will worsen, sea level will rise, temperatures will increase, and our mountain snowpack will diminish.
Nearly all of the impacts of greenhouse gas increases are AHEAD of us. The Pacific Ocean has slowed the warming, but by the end of the century, the impacts of increasing greenhouse gases will be profound. This is not hype; this is not exaggeration; it is the conclusion of the best science and models.
There are two ways we can respond to this threat: adaptation — making our state less vulnerable to the warming — and mitigation, reducing our carbon emissions.
I 732 represents a powerful approach to reducing carbon emissions by taxing carbon and letting the free market decide on the best approach.
Now some people say that we should not bother with mitigation efforts because Washington State is only a smart part of the problem. But every locality is a small part of the problem — and only if everyone does their small part will significant progress be made on this global threat.
We live in a technologically sophisticated state. Pressure to reduce our carbon footprint will result in new technologies, new businesses, and enhanced economic opportunities for our state. I-732 will aid our economy, not work against it.
Finally, I-732’s revenue neutral approach will make our tax system less regressive, and if we succeed on doing this together, it will be an extraordinarily positive bipartisan example for the rest of the nation.
In short, I-732 makes sense on all levels. It responds to our best science and the guidance of top economists and business leaders like Elon Musk. It will make our tax system less regressive, leads to a reduction in our carbon footprint, encourages new energy technologies, provide business opportunities, and will make our state a bipartisan example to the nation. I hope all of you can support it.
Kate Pflaumer, former United States Attorney for the Western District of Washington and Chair of the Board of the Puget Soundkeeper Alliance
I’m proud to be one of the many small donors and volunteer signature gatherers for I-732. Like all the other volunteers in this grassroots movement, we have sought no profits or investments in our organization except to get 732 passed and reasonable, effective climate policy into higher gear in this State. It’s been truly inspiring to work with this group and in many ways we have reclaimed the initiative process as fundamentally democratic and truly nonprofit in operation and goals.
It’s been said all of us in this room are the first generation to feel the effects of climate change — and the last to be able to do anything about it.
It is emotionally hard to face impending disaster, and very hard to change our behavior for disaster that seems distant, and is coming towards us in an uneven march.
I want to draw our attention to one area where the effects are immediate and truly frightening — and not disputed: the health of this planet’s oceans. They have absorbed a great deal of our carbon pollution and it is beginning to affect the basic building blocks of aquatic life. We have seen the problems with the shellfish industry right here in WA where the oyster shells won’t form. You don’t have to be a scientist — just to remember if you put a baby tooth in a Coke as a kid and saw it disappear. That’s what’s happening to the calcium structure of our smallest ocean creatures. That is what heightened levels of carbon dioxide pollution are doing to Puget Sound and the Pacific Ocean itself.
It is time to act — and I-732 is a straightforward, unencumbered plan to change our behavior and support our vulnerable populations, our manufacturers, and our economy as a whole. It is a progressive measure with very simple mechanics and therefore limited necessary staff support. This legislature can control any budget repercussions, if in fact they develop.
Please support this common-sense approach for the sake of all our kids and the future of our beautiful state.
Sharon Nelson, former chair, Washington Utilities and Transportation Commission
Mr. Chairman, members of the Committee, I am Sharon Nelson. I served as chair of the Washington Utilities and Transportation Commission from 1985-97. Since then, I have had a few opportunities to learn about the topic of this hearing.
I served as a commissioner on the National Commission on Energy Policy from 2003 to 2010, which was funded by the William and Flora Hewlett Foundation. That group suggested policy and legislation which found its way into the 2009 Energy and Climate Change bill sponsored by Rep. Henry Waxman of California. The proposal was for a national cap and trade system. The bill passed the U.S. House of Representatives but collapsed of its own weight in the Senate. I re-learned what I had known as a utility regulator: regulatory schemes often invite gaming.
As it proceeded through the legislative process, the Waxman bill had attached to it some well intentioned as well as silly infrastructure and subsidy proposals. What I learned: Cap and Trade is hard to explain to legislators and invites regulatory gamesmanship.
From 2010-12, I served as co-chair of the committee advising Governor Gregoire’s Commerce Department on the state’s energy strategy. That committee brought forward a variety of policy proposals, including a strong recommendation that the state set a price on carbon. But as such committees often do, it waffled on the way to set a carbon price — recommending the legislature consider either a carbon tax or a cap and trade program. The Legislature largely ignored those recommendations. What I re-learned: policy making is hard.
At Carbon WA, we recognize that legislators must keep an eye on overall policy making at the state level, and that is exactly why we brought this initiative forward to you. You are elected to make hard decisions in the long-term interest of the people and the planet.
I-732 is easy to explain. The legislature sets a price on carbon, which escalates over time. In the first two years it reduces the regressivity of the state’s sales tax structure by dropping the retail sales tax a full percentage point. And it funds the working families rebate program. A similar model to this proposal has been working successfully in British Columbia since 2008.
I-732 is predictable (and businesses say they yearn for predictable policies.) It is broad (we are, as Cliff Maas said, all small parts of the problem.) It is simple (the B.C. government added 12 employees to its payroll to administer and enforce the new tax. There is no government bureaucracy created to pick winners and losers in the market place for cleaner energy.)
The NASA scientist who first brought climate change to the public’s attention got the attention of President George H.W. Bush’s administration — which formulated what it called its “No Regrets” energy policy. The then head of EPA, Bill Reilly, reasoned that good policy should encourage the reduction of all smokestack emissions.
Likewise, Washington legislators should have no regrets by passing I-732. Your grandchildren will thank you.
Greg Rock, Carbon Washington Executive Committee
Chair and committee members: My name is Greg Rock. I have a master’s degree in sustainable energy engineering with a focus on policy, and I am an executive committee member of Carbon Washington.
As an engineer, I naturally want to identify and solve problems. Today there is 30% more CO2 in our atmosphere than there has been at any point in the last 400,000 years, which is a clear pollution problem. Overcoming this is not a technical impossibility; it is simply a political challenge. As lawmakers trying to protect our citizens from a pollution problem, there are three basic policy options you have:
Often these three options get blended together into a single policy. But what really attracted me to I-732 is that it is a rare example of a pure pricing mechanism. We know what the most cost-effective strategy is, so let’s focus on implementing that and only that. This strategy also introduces some political advantages.
I-732 doesn’t increase the size of government, doesn’t damage economic growth, doesn’t assign new regulatory authority, and doesn’t require increasing tax revenue. In short I-732 doesn’t conflict with the core ideology of conservatives.
This is hugely important when it comes to addressing this worldwide pollution problem. This is not a political challenge that one side can win. We as humans will only prosper if we can come together around a centrist policy like I-732 that is both fiscally conservative and socially progressive.
At the end of the day, I know both Republicans and Democrats want to protect our citizens, our children and our future generations from the negative impacts of pollution. For this reason I urge this legislative body, which is better educated on these issues than any other in our nation, to work together to pass I-732 this session.