Carbon taxes and their discontents

Regular readers of this blog know that I am most certainly NOT a fan of carbon taxes.  As a public policy prescription for climate change, they fail on two obvious and disqualifying levels:

1. Carbon taxes assume that if you just make it more painful to use carbon, folks are just naturally going to figure out how to do with less.  And while this idea works when the subject is discretionary use of energy (water skiing, for example), the overwhelming use of energy is for activities that relate to survival—cooking, growing food, keeping warm, work-related travel, etc.  For the necessary activities, the only solution is to replace the energy consumption with new tools and methods that don't require fire to operate.  Unless carbon taxes are strictly used for infrastructure replacement, they are worse than worthless because they lead to problem #2.
2. Carbon taxes are the theological equivalent to the extremely controversial doctrine of indulgences. They allow the rich sinner to pay for the forgiveness of his sins.  While indulgences are mostly a cynical fund-raising ploy, they actually do structural damage to the social contract.  For example, Al Gore believes in carbon taxes.  As a very rich man, they would have minimal effect on his lifestyle in any case.  So after he made a small pile on his movie that was supposed to be a warning about climate change, he spent part of the proceedings jetting around in a very nice bizjet—perhaps the most lavish user of carbon fuels ever invented.  And how does he sell this hypocrisy?  He bought some indulgences—some carbon "offsets" and some political speeches about carbon taxes.

And so in the all-so-enlightened state of Washington, some folks have been agitating for carbon taxes because they have convinced themselves that to pass carbon taxes is to be on the bleeding edge of carbon awareness. And because this is mostly a lefty project, it has to pass all sorts of hurdles of political correctness—which is really a bad idea in the case of climate change because the problem is mostly a physics / engineering matter.  Energy matters are not especially enlightened by pre-industrial ideologies.

The following is a long and complex essay and if you want to find out what happens when stale ideas (like indulgences which were around to trigger the Protestant Reformation in 1517) meets a global society run by fuels that simply can no longer be burned, read it all.  I look at it as just another cautionary tale of what happens when folks try to apply Predator Class thinking to a Producer Class problem.

The left vs. a carbon tax

The odd, agonizing political battle playing out in Washington state.
David Roberts, October 18, 2016

This is not an election year in which it is easy to get attention, unless your name rhymes with Gump. Nevertheless, it's worth taking note of a colorful, contentious, and counterintuitive political drama playing out in the top left corner of the country.

It’s a fight happening within the left, and like a great many such fights in US politics these days, it reveals sharp differences over how to make progress in the face of Republican intransigence. In this case, the subject is climate change policy, but the fissures being exposed are relevant to all of left politics in an age of hyperpolarization.

Here’s the situation. There’s a carbon tax on the ballot in Washington this November, meant not just to put the state on the path to its climate targets but to serve as an example to other states.

The measure, called Initiative 732, isn’t just any carbon tax, either. It’s a big one. It would be the first carbon tax in the US, the biggest in North America, and one of the most ambitious in the world.

And yet the left opposes it. The Democratic Party, community-of-color groups, organized labor, big liberal donors, and even most big environmental groups have come out against it.

Why on Earth would the left oppose the first and biggest carbon tax in the country? How has the climate community in Washington ended up in what one participant calls a "train wreck"? (Others have described it in more, er, colorful terms.)

That turns out to be a complex and ill-fated story, revealing divisions among climate hawks — over who pays, who benefits, and who decides — that will not long stay confined to the West Coast. The future of climate politics is playing out in Washington state, and it is not pretty.

What I-732 would do, and why

Before jumping into the conflict, it helps to understand exactly what I-732 would do. Luckily, it’s pretty simple. It would do four things:

1. Impose a tax on carbon emissions, starting at $15 per ton in 2017, rising to $25 per ton in 2018, and then rising every year thereafter at 3.5 percent plus inflation, topping out at $100 a ton (in 2016 dollars). The tax would reach citizens in the form of a gas tax and a tax collected by electric utilities.
2. Reduce the state sales tax by 1 percentage point.
3. Fund the working families tax rebate (WFTR), which would bump up the federal earned income tax credit to provide up to $1,500 a year for 460,000 low-income households.
4. Eliminate the business and occupation tax on manufacturing. much more