The Seattle Times Editorial Board interviews proponents and opponents of Initiative 732 (concerns carbon emission tax), August 11, 2016
Video posted at
Starting at 0:00, transcribed by Nan McKay
0.00 Kate Riley: Well, thank you very much for coming. I want to introduce the members of the editorial board. Donna Blankenship, Brier Dudley. I’m Kate Riley. Mark Higgins. And Jonathan Martin. Hal Bernton is a reporter from the newsroom and may be writing a story about this. I want to welcome our guests: Yoram Bauman, Yes on I-732 campaign. This is the organization that is sponsoring the initiative. We also have opposing the initiative Rebecca Saldana from Front and Center. Thank you very much for coming. As I mentioned earlier, we’ll give each of you four minutes to start the conversation. We’ll start with you, Yoram. After that we’ll have questions. And then at the end we’ll give you each about three minutes to provide closing statements. So we’ll end in about an hour.
1:01Yoram Bauman: Terrific. Thank you. It’s an honor to be with you. My name is Yoram Bauman. I’m an environmental economist and have a Ph.D. from the University of Washington and I’m a volunteer with the Initiative 732 Campaign. Our campaign has been a grassroots effort. I’m one of hundreds of volunteers who gathered signatures last year to qualify our measure for the ballot—360,000 signatures. I’m one of over 1,000 people who have donated money to the campaign. We’ve done this in a grassroots fashion that I think resonates with the vision that the founders of our state constitution intended when they provided an opportunity for direct citizen democracy. The motivation for me and for the volunteers and staff on our campaign is that we have a moral obligation to take action on climate change--both for those of us who are alive now and for our children and grandchildren and generations to come. I think about things like ocean acidification, wildfires, threats to public health. I think about my two-year old daughter. I think about salmon. All these issues that I think we’re all aware are going to become one of the major issues of the 21st Century.
So we have this moral obligation to take action on climate change. And Initiative 732 does that. Economists across the political spectrum agree that the single most important thing that we can do to take action on climate change is to put a price on carbon. Get market forces working to reduce carbon emissions, create new technologies, promote innovation and conservation. 732 does that with a world-leading carbon-tax approach similar to the policy that’s been very successful in British Columbia since 2008.
We also have, in addition to that moral obligation, an economic obligation to address climate change in a way that makes sense for households and businesses in our state. And we do that by using the revenue from the carbon tax to reduce existing taxes. Principally, we cut the state sales tax by a full percentage point. It’s going to provide households and businesses across the state with a financial benefit to offset the impact of the carbon tax. One percentage point may or may not sound like all that much but it’s hundreds of dollars a year for an average household in Washington State. So, to a first approximation, for households, the way our policy works is that most households will end up paying a few hundred dollars a year more for fossil fuels and a few hundred dollars a year less for everything else. We have worked with the University of Washington on a tax swap calculator that you can find on our website to go through specific details for households or for businesses.
We also effectively eliminate the B&O tax, the business tax for manufacturers in the state, as a way to address competiveness concerns for energy-intensive trade-exposed businesses. And finally we fund the working families rebate which is a match of the federal earned income tax credit, one of the most successful anti-poverty programs in the United States. Twenty-five states have matches of the federal earned income tax credit. Washington State has one—a 10 percent match. It’s never been funded. We provide a funding source—the carbon tax—and we increase the match to 25 percent. Which is going to provide up to $1500 a year for 460,000 working families in Washington State. Between
the working families rebate and the sales tax reduction which benefits everybody—households and businesses across the state—our proposal is going to be the biggest step forward in terms of progressivity for the Washington State tax system in 40 years.
Finally, we believe that we have a political obligation to take action on climate change in a bipartisan manner. That’s something that’s important here in Washington State and it’s important if we’re going to take action in Washington, D.C. as well. And ultimately climate change is something that we’re going to have to tackle nationally and internationally. Doing something in a bipartisan fashion is the crucial step forward in terms of opening the door for climate action.
We’re delighted to have endorsements from both Republicans and Democrats in the state legislature, from national figures including George Shultz who was Ronald Reagan’s Secretary of State, Jim McDermott, climate scientist Jim Hanson. So we take that very seriously. And I’m thrilled to be here today to help talk about Initiative 732 and to ask for your endorsement.
5:50 Rebecca Saldana: My name is Rebecca Saldana. I’m executive director of Puget Sound Sage and a proud founding member of the steering committee of Front and Center which represents over 60 people of color, social justice and community-based organizations throughout Washington State. For over a decade Puget Sound Sage has been at the forefront of addressing environmental injustices for—and the reality is that the climate impacts are already being felt in Washington State from our forest fires. And communities of color and frontline workforces are already facing environmental degradation where we have people in South Park and Georgetown facing shorter lives and huge pollution, higher pollution. And 40 percent of our pollution in Washington State is caused by transportation which this particular initiative does nothing to address. And what we have come to terms with as we’ve worked on environmental justice for over a decade is that any successful climate action in Washington State—because it’s important that this actually works for our state—must do three things:
It must attract broad multi-sector support
It must reinvest in clean energy
It must prioritize communities most directly affected—those are the frontline workers in fossil-intensive industries as well as their communities and communities of color that tend to be more densely populated around industrial areas and around freeways and highways where they’re exposed more to pollution.
As such the economic shiftthat I-732 does with the one percent sales tax--while makes our current sales tax less regressive,it doesn’t really do anything significantly in terms of really addressing the need for revenue to be more progressive in Washington State. An economic shift will not be equitable when it’s just carbon pricing alone. Equitable climate action requires that we do green investments at the same time. Climate action policies are ultimately about ushering in an unprecedented economic shift for our state and for our economy. Success is about changing our consumer behaviors, about shepherding us from carbon-intensive fuels, protecting habitats and infrastructure and towards a new way. While I-732 could inadvertently increase our consumption of the cheaper carbon fuels like natural gas. Because the cost savings that they’re doing for one percent for most lower income families is about $70 more which is about acouple of tanks of gas. It does nothing to actually put more money to increase the spending power to be able to actually change the car that they’re using to one that would be more carbon neutral or lower emitting car. So, in effect, it’s going to create a pressure to be able to use natural gas and other gases. And, instead, if we were to do something that was both about cutting carbon—putting a price on it—and investing, what we can do is leapfrog—just transitioning from the more expensive ones to less expensive ones and actually just go into clean energy in the first place.
The other piece. While rebates are nice, they won’t actually make the air cleaner in South Park. They won’t actually address the fact that communities that are dependent on oil-intensive industries—it doesn’t improve the lives of those workers.
And, in fact, the B&O tax—again, like great! Except business didn’t actually ask for the B&O tax. And no one has asked those companies about whether that’ll actually make a difference for being able to stay in Washington State.
So what I-732 looks like it will do is basically make a small cut in revenue when we know that in Washington State we have a huge need for revenue. We have a one billion dollar shortfall in mental health. We have a billion dollar shortfall in education. And this does nothing to actually address--outside of their nice policy—while it looks good on paper—doesn’t really take into the context of Washington State’s economy and what we need and what will work for Washington State .
This has not shown that there won’t be leakage and what we can see is that businesses could move. Because it doesn’t actually address what they need to be able to change from the fossil fuels that they are dependent on now to a cleaner fuel. And so they could move out so they’re still polluting and still impacting our communities.
11:16 Brier Dudley: So, Rebecca, as this emerged earlier in the year there was a different environmental group that was unhappy with the Carbon WA proposal becausethey felt that it didn’t go far enough, it didn’t provide enough revenue for certain groups. And they thought there should be a little bit more distribution of the tax proceeds. And that group kind of fell apart. I think the Governor and some of his people… Is that where you’re coming from? Are you supporting the principle of a carbon tax but you think it doesn’t go far enough and that there should be more distribution, or are you opposed to the carbon tax in principle?
11:49 Rebecca Saldana: We believe that there should be a price on carbon and we believe that there needs to be investments in clean energy at the same time. What we know from Paris and from other places is that if we don’t actually usher in a transformation to a clean energy economy. Let me step back for one sec. So what we’re saying is we do know there needs to be a price on carbon andwe need to be able to move more quickly to clean energy. In order to meet our goals around climate, we need to keep a significant amount of fossil fuels in the ground.
12:34 Brier Dudley: But where the money goes that’s collected from the price of carbon--you have places you would rather see the money go than to a sales tax cut and to the rebate to the lowest…?
Rebecca Saldana: Right. in order to be able to achieve the goals that we have around climate action.
12:50 Kate Riley: And that money--you would want that money to go into investing in alternative fuels and alternative energy?
Rebecca Saldana: Yes, in green investments.
13:00 Brier Dudley: Although, Yoram’s model is designed to make it more equitable and less regressive. What others..I think economists are pretty united in thinking that a carbon price can be very regressive and have a very negative effect on working families and the working class unless there’s some kind of an offset. And all the different schemes that have come out for pricing carbon have found ways to make it less regressive and offset that. But if you just take the proceeds of the tax and give them to a special industries and things like that, are you not just creating just as much of a regressive structure?
Rebecca Saldana: What was that? The last part you said?
Brier Dudley: How would your program be less regressive than Yoram’s program?
13:45 Rebecca Saldana: We all know that we need tax reform in Washington State. This I-732 is a window dressing. It doesn’t actually create a new progressive tax infrastructure in Washington State. What I’m looking for is how quickly can we get clean air and clean water for ourchildren today. So when we’re looking at climate policy, as Yoram mentioned, we are looking at creating a standard for the country and it has to work for Washington State. So, I’m not looking for special interests. I’m looking for what will actually more quickly either keep carbon in the ground and be able to actually address the largest pollution that we’re seeing which is in transportation. So one is putting a price on carbon. But if you don’t actually give people alternatives, what you’re doing is putting more pressure on the people who can least afford it. A one percent doesn’ t actually…seventy dollars as I said earlier doesn’t actually help with the hospitalization bill when a mother in South Park has to take her kid in again and again for asthma. That’s great that she has seventy dollars. It doesn’t actually improve the air. It doesn’t actually reduce the carbon. She’s still going to get into a car—a dirty car—and drive wherever she needs to go to be able to get her kid to the hospital.
15:25: Jonathan Martin: Yoram, can you respond to Rebecca’s comment there that the low income family mitigation in this is insufficient? There’s a few other things I want to ask you about but will you talk about that first off—mitigating the cost of a higher carbon price on low income families.
Yoram Bauman: Sure, and let me begin by acknowledging that low income communities and communities of color disproportionately bear the burden of climate change. And that those communities have potential to get a double benefit from taking action on climate change both because we address those climate impacts and because taking action on climate change is going to provide what are called co-benefits--so you get reductions in other air pollutants, local pollutants, that also come from burning fossil fuels that will go downif we can also reduce carbon emissions—if we can reduce fossil fuel consumption.
Having said that, let me note that there are differences of opinion from low income groups, from community of color groups, about Initiative 732. We are delighted to have an endorsement from Ron Sims. If you look at the 7th Congressional District race, it’s between an Indian American who says she’s going to vote against 732 and a Cuban American Brady Pinero Walkinshaw who says he’s going to vote in favor of 732. If you saw the news story from a week ago, Black Lives Matter—60 organizations affiliated with the Black Lives Matter movement put out a list of policy demands, and one of their policy demands under economic justice was replacing sales taxes with taxes on externalities. They also called for an increase in the earned income tax credit. Those policies are part of Initiative 732. Maybe, beyond that, I think there’s been a philosophical divide—or philosophical difference here between some of the groups with the Alliance and with Front and Center who argue—and please correct me if I’m wrong, Rebecca-- that the way to address impacts on low income communities and communities of color is to provide money for community-directed investment—like the California-style approach. Our approach with 732 has been that they way to addressfinancial impacts on those communities is to put money directly back into people’s pockets by cutting the sales tax and by funding the working families rebate. So there’s been that philosophic divide. And, I think the only two things I would add on top of that is that….732 is an actual policy that’s on paper. We’re a little bit fighting a ghost here because there’s no specific Alliance or alternative policy that’s fully developed, that’s on the table. I was with Jeff Johnson from the Labor Council who’s also a member of the Alliance two weeks ago at a debate in Bellingham. He acknowledged that the Alliance hadn’t yet figured out how to address impacts on communities of color, on low-income households. That’s what he said at that debate. If you look at the report that Sightline came out with last week, they argued that a California style approach probably wouldn’t work very well in Washington State.
18:48 Brier Dudley: Can we address the low-income question? The earned income credit thing you’re talking about, as I understand, will benefit 460,000 people that are eligible for it.
Yoram Bauman: Households….
Brier Dudley: Households. Yeah, but that’s what?--five or seven percent of the population? I guess what I’m wondering about is the effect on the people below the lowest quintile of incomein the State of Washington and the second and third quintiles where the largest group of people in Washington and the largest group of working people are and how they will be affected. They’re not going to get the payback through the EIC credit you’re talking about. They’re people who might drive from Kent to come up here and install carpets or sheetrock or clean houses. They’ll be burning a lot of gas. They have no other option. They’re carrying toolsAnd they will be disproportionately affected by this. And how do you respond to that concern?