Carbon Tax: A Win-Win Solution for Washington
By Bobby Righi, a member of PSARA’s Environment Committee
The news on climate change is not good. The observatory on Mauna Loa in Hawaii, says the atmosphere is now over 400 CO2 parts per million. A new study of temperature records from Oregon State has shown that the planet is now hotter than any time in the past 4000 years and temperature is rising fifty times faster than at any point in the last 11,000 years. We are in for some nasty weather. We have relied on “cheap” fossil fuels for the past 100 years or so to fuel our economic growth and are now facing the consequences.
Oil and gas and coal are not cheap. Though it is hard to believe with gasoline prices at $4.00 per gallon, we do not pay enough for gasoline and other carbon-based energy sources. While funding the costs of production and distribution and handsome profits for the oil and coal companies, the price for carbon-based energy sources does not pay for the social costs of extracting, refining, and burning oil and gas.
Who pays for the devastation to the environment from drilling and mountaintop removal, the air and water pollution from the refining process, and the millions of tons of carbon dioxide emissions released when we burn these fuels to generate energy? We do. The costs of pollution and climate change are born by the public – via rising health care costs, higher insurance payments because of increasingly drastic weather events, and taxes funding disaster clean-up efforts and environmental remediation. Big oil and coal ignore these costs and their profits soar.
Scientists fear these alarming problems are not reversible. Can we lower the carbon dioxide (CO2) emissions enough and in time to alleviate the changes to the climate that are becoming more and more obvious to everyone? What can we do here in Washington?
We can begin by charging ourselves a “carbon tax” which would more accurately reflect the social cost of using these fuels. This would tax something harmful and remove or lower taxes on things that hurt the economy and working families – e.g. the sales tax. Our neighbors in British Columbia established a carbon tax in July 2008 and have reduced CO2 emissions while the economy continues to grow.
How does a carbon tax work?
- It is a direct tax on the carbon content of fossil fuels. Some fuels produce more CO2 emissions and are taxed at a higher rate. It would be introduced at a rate of $10 per million tons of CO2 (MTCO) and increase $5 per MTCO each year until a certain level.
- Because of the higher cost of using carbon fuels, investments in buildings’ energy efficiency, road improvements, and alternative energy sources would become more financially attractive and necessary.
- Tax revenues from the carbon tax will be distributed to low-income families who would be disproportionately affected by the tax. There is a Washington State plan for a working families tax rebate that has not been funded. Revenue from carbon taxes can fund this and make it possible to lower the regressive state sales tax.
- A carbon tax generates revenue to pay for cutting the B&O taxes on small businesses and lowering or eliminating the state sales tax. These changes would help the economy and job creation.
As long as fossil fuels appear to be the cheapest energy source, we’ll continue to rely on them, the fossil fuel industry will continue to reap the benefits, and we will pay the costs. A Washington state carbon tax will lower the use of carbon-based fuels, and provide funds to build the economy and provide meaningful, union-wage jobs. It is a “win-win” situation.