Will Washington be the first US state to have a carbon tax?

Re-posted from the Christian Science Monitor

Yoram Bauman is the world’s only “stand-up economist.” He makes his living poking fun at his own profession. But he’s dead serious about fighting climate change, and he’s the intellectual force behind a climate-related initiative that seems likely to appear on Washington state’s November 2016 ballot, an initiative that would implement the first carbon tax in the nation.

The purpose of the measure, dubbed Initiative 732, would be to motivate households and businesses to cut down on the burning of fossil fuels, the major source of man-made emissions of carbon dioxide, the main greenhouse gas. By raising the price of fossil fuels it would encourage conservation and efficiency and the substitution of low-carbon and carbon-free sources of energy by making these energy sources more cost-competitive.

The organization pushing the initiative is Carbon Washington. The principle behind the proposal is simple: Raise taxes on what you want less of and lower taxes on what you want more of.

The effect is to hold state revenues steady. The proposal’s tax reductions and rebates give back to Washington state residents and businesses as much as the carbon tax collects, about $2 billion annually starting in 2018 when it would go into effect. The purpose of the tax then is strictly to change behavior and buying habits in order to lower carbon emissions rather than to raise revenue for the state. In bureaucratese the tax is “revenue neutral.”

Bauman prefers the carbon tax to other forms of carbon pricing because “it’s so simple and transparent, it can be explained in a haiku.” Haiku, of course, is a Japanese form of poetry containing 17 syllables arranged 5-7-5. The haiku that explains the plan is this:

Fossil CO2  (pronounced: see-oh-two)
Twenty-five dollars per ton
Revenue neutral

He jokes that California’s cap-and-trade plan for carbon emissions by comparison is more akin to Leo Tolstoy’s War and Peace. The first edition of the novel contained 1,225 pages. The California plan is actually shorter, 430 pages. But the implementation documents are voluminous. Not exactly haiku.