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Search Results for: going global

The Climate Moment — and Movement — Have Passed Mike Bloomberg By

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I’m rarely without one of my own bikes. But lately, dicey weather and scheduling issues led me to add Citibikes to the mix. And during each hassle-free ride I marveled anew that since 2013 the City of New York, home to some of the world’s most contested streets, actually cleared out space for the bicycle docks and racks.

The man who faced down the skeptics — of whom there were many — and saw bike-sharing through? Michael Bloomberg, during his third and final term as mayor.

As NYC mayor, Bloomberg supported the subways. He also rode them.

Earlier this year, Albany legislators wrote language into the state budget that in 2021 will launch the world’s most ambitious congestion-pricing plan in NYC. As visitors to this site know, I fought for this groundbreaking program, as pamphleteer and traffic-modeler. I recognize that congestion pricing’s passage was made possible by a host of advocates in and outside government. High among them was Bloomberg; his bold though unsuccessful push for traffic tolls a dozen years ago laid the ground for this year’s win.

As mayor, Bloomberg instituted a slew of measures, many of them controversial, that have made New York more healthful and prosperous. All deserve to be counted as green achievements because they have attracted and kept businesses and residents in our dense and efficient, hence low-carbon city. He also, in 2007, called for a U.S. carbon tax, becoming perhaps the most prominent American to back straight-up carbon taxing rather than the convoluted cap-and-trade schemes beloved of mainstream environmental groups back then. More recently, Bloomberg’s post-mayoral contributions to the Sierra Club’s “Beyond Coal” campaign helped shove scores of carbon-spewing coal-fired power plants into early retirement — a certified climate win.

Knowing all this, you might ask why, in an interview with Inside Climate News, I chose to pour cold water on the idea of Bloomberg as a 2020 climate candidate . . . going so far as to call him “the perfect climate candidate for 2007.” (My epithet wrapped ICN’s story yesterday, Bloomberg Is a Climate Leader. So Why Aren’t Activists Excited About a Run for President?)

Why? Because, as I told ICN, I believe that extreme wealth stands in the way of the radical transformations the climate emergency requires.

If, as I believe, rapid and full decarbonization must entail fundamental changes in how humans live and work and organize, then everyone’s lives must transform. It won’t wash for the super-wealthy to go on leading lives of unbounded privilege — luxuriating on their yachts, globetrotting among their mansions, helicoptering from one island or summit gathering to another — burdened only by carbon fees on their huge footprints.

Bloomberg is of that class. That he has greater awareness than his peers is to his credit. But so long as he wields and personifies extreme wealth, he cannot be the avatar of transmuting it into productive use.

In the U.S., new work by the U-C Berkeley economists Emmanuel Saez and Gabriel Zucman suggests that taxes on extreme wealth and financial transactions, supplemented by increases in estate taxes, marginal income tax rates, capital gains and corporate taxes, will be able to generate trillions of dollars from the wealthiest American households. Those revenues, not carbon tax revenues, must be the funding source of the vast amounts needed to pay for the Green New Deal energy programs.

Unfortunately for Bloomberg’s presidential candidacy, fundamental climate solutions can’t co-exist with extreme wealth.

What I meant by my “Bloomberg 2007” comment is that, with climate damage already skyrocketing and emissions still rising, we’ve shot past the point when a carbon tax could have been the primary policy engine to slash U.S. and other nations’ carbon emissions quickly enough to keep the rise in global temperatures under the presumed 1.5ᵒC ceiling.

That wasn’t so in 2007, the Carbon Tax Center’s inaugural year as well as when Mike Bloomberg vaulted to the front of the valiant band of political leaders and advocates calling for robust carbon taxing. But now, a dozen years on, the climate crisis is too dire, and economic inequality too extreme and enraging, for carbon taxing to function as the main ticket out of climate catastrophe.

In the coming months, the Carbon Tax Center will be retooling our program to reflect our new view that the path to decarbonizing the U.S. economy lies in a Green New Deal-inspired infrastructure and investment program funded by taxes on extreme wealth and supported by a carbon tax. Please watch this space.

As for Mike Bloomberg, we acknowledge, with deep gratitude and genuine respect, his past vision and leadership and thank him for his service. The torch is passing to new leadership that will attack the power to lord and the power to pollute at the same time.

March 2020 addendum: On March 1, just before Bloomberg ended his candidacy, NY Times climate reporter Lisa Friedman posted an unusually substantive and nuanced assessment of his climate record, Fighting Coal Was Supposed to Lift Bloomberg. Here’s Why It Didn’t. The money quote is from Paul Bledsoe, a strategic adviser at the Progressive Policy Institute:

Bloomberg is a victim of the climate debate moving much faster than the positive realities he helped shape on the ground. In particular, his focus on coal seems passé now that the target of the left is natural gas.

The Divestment Diversion

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The Carbon Tax Center has had qualms since day one about campaigns to compel institutions to divest from their fossil fuel holdings. The morality is great, but impact is lacking.

“Divestment can’t loosen the fossil fuel stranglehold without a carbon tax,” we wrote in a photo caption in our first stand-alone post on divestment four years ago.

Today, with a broadened outlook, we would write that divestment can’t loosen the fossil fuel stranglehold without a Green New Deal-level massive investment in decarbonization, with a robust carbon tax playing a major contributory role — a position we outlined in a post earlier this year, Carbon Tax Advocates Should Embrace a Green New Deal.

Our 2015 post outlined why fossil fuel divestment is a dead end:

Divestment by socially responsible investors, universities and even governments won’t starve capital flows to fossil fuel corporations anytime soon. That’s because in a global market, every share of stock we activists dutifully unload will be snatched up in milliseconds by some trader who can bank on humanity’s continued dependence on fossil fuels to continue generating profits. (emphasis added)

Why bring this up now? Because we just stumbled across an illuminating 2018 interview with U-Mass economist Robert Pollin, a prominent climate academic-activist and co-author of a detailed financial analysis of fossil fuel divestment impacts. The interview, posted at Truth Out in May 2018, is entitled, Are Fossil Fuel Divestment Campaigns Working? A Conversation With Economist Robert Pollin. Sadly but unsurprisingly, Pollin concluded in his analysis, also from 2018, that they aren’t.

Here’s the key excerpt. The questioner is C.J. Polychroniou, a Truth Out contributor and political economist-scientist. We added boldfaced type, for emphasis.

Q: One approach that has become quite popular in recent years is the strategy of divestment. However, the recent study you coauthored with Tyler Hansen questions the effectiveness of the strategy of divestment in reducing carbon emissions. How did your study come to that conclusion?

A: In this new research paper, Tyler Hansen and I concluded that divestment campaigns have not been especially effective as a means of significantly reducing CO2 emissions, and they are not likely to become more effective over time. Our study includes both an analysis of the available data on global divestment patterns as well as a formal statistical modeling exercise that evaluates the impact of divestment events — such as when the New York City pension fund decided last January to sell off all of their fossil fuel company holdings — on the stock market prices of fossil fuel companies.

We found two basic things from this research. First, to date, we found the total level of divestment commitments to be at about 0.7 percent of total global private fossil fuel assets (assets committed to divestment are at about $36 billion while total global private fossil fuel assets are at $4.9 trillion). Second, we found no evidence that any divestment actions, including the recent New York City pension fund decision, has [sic] had any significant negative effect on the stock prices of fossil fuel companies.

The basic problem with the strategy is straightforward. Ethically motivated owners of fossil fuel stocks and bonds — such as the New York City Council — do certainly have the power to sell these assets as a statement of principle and act of protest. But this act of protest will have no direct impact on the operations of the fossil fuel companies as long as investors who are profit-seekers, as opposed to being motivated ethically, are willing to purchase the stocks and bonds that ethically motivated investors have put up for sale. Indeed, the core divestment strategy of selling fossil fuel assets is, at best, incomplete until one addresses this question: Is there somebody out there still willing to purchase these fossil fuel assets, and if so, and at what price? The answer is, yes, there are plenty of people ready to purchase shares of fossil fuel companies as long as they can profit by owning these shares.

In addition, the profit opportunities from owning oil, gas and coal company stocks are not diminished through the divestment-led sales per se. This is because divestment per se does not affect either how much it costs to produce fossil fuel energy or how much consumers are willing to buy. In theory, divestments might be capable of pushing down stock market prices of fossil fuel companies. But it is also likely that any such impact on stock prices is going to remain negligible as long as profit-seeking investors continue to make money. And they will continue to make money unless we succeed in either raising costs of producing fossil fuels or limiting how much fossil fuel energy consumers can buy.

Pollin hastens to add, as we did in 2015, that he and his co-author Tyler Hansen “greatly respect the accomplishments of the divestment movement”:

[Divestment campaigns] enable activists to fight for goals that can be clearly articulated and achieved within the institutions and communities in which they work and live, as opposed to attempting to influence public policies where the decision-making process is more remote. Divestment campaigns also have a demonstrated record of success in raising consciousness as to the urgency of dramatic action on climate change, and the need to confront the power of the fossil fuel industry as the single greatest barrier to advancing a viable climate stabilization project.

Despite these substantial accomplishments, we nevertheless conclude, based on the findings we present here, that most efforts now devoted to divestment campaigns would be better spent on more direct efforts to drive down fossil fuel consumption and CO2 emissions. We simply don’t have time to lose in pushing as effectively as possible on the fundamental goal which we cannot lose sight of — which is to drive CO2 and other greenhouse gas emissions down to zero as quickly as possible. We need to remember that, at best, divestment is a means to an end, with the end itself being eliminating emissions.

There’s a wealth of supporting analysis in the Pollin-Hansen paper (here’s link, again). But the takeaway remains that divestment is primarily a tool for movement-building rather than carbon-busting. Climate laggards like New York City Mayor Bill de Blasio who wrap themselves in the mantle of fossil-fuel divestment are just green-washing.

Green New Dealers Should Embrace a Carbon Tax

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CTC policy associate Bob Narus wrote last month that Carbon Tax Advocates Should Embrace a Green New Deal. Here is his mirror-image brief for including a robust carbon tax in a Green New Deal.

The Green New Deal isn’t a policy yet. Right now, it’s mostly an aspirational slogan and a set of bullet points, which is fine for the moment. There’s time to work out the policy details. But it’s important that a robust carbon tax become one of those bullet points, because without it no deal, no matter how new and green, can do everything we need to do to prevent global climate change from spinning out of control.

Rally in Victoria, BC, March 2019. Photo courtesy of Anne Hansen.

Whether a carbon tax is part of the Green New Deal depends on whose Green New Deal you mean. The Data for Progress report, A Green New Deal — essentially Document Zero for the Green New Deal movement — doesn’t endorse a carbon tax but does note that “there is new analysis that a carbon tax will not hamper the economy, particularly as revenues are reinvested smartly in communities.”

The Alexandria Ocasio-Cortez/Ed Markey resolution, H.R. 109/S.R. 59, doesn’t mention a carbon tax, or any other potential source of funding for its ambitious goals, but AOC herself has publicly recognized the need for taxes to internalize the externalities of some industries or markets.

The policy details will fall into place over time. In particular, one hopes the many Democratic presidential candidates who have endorsed a “Green New Deal” will say more about what they mean by that — which policies they would include, what they’ll cost, how to pay for it all.

In short, we will have a national conversation about the Green New Deal. To everyone engaged in that conversation, here’s a quick take on why a carbon tax should be part of it:

1. If you believe the IPCC, we have to do everything.

In its most recent report, the IPCC called for roughly halving (from 2010 levels) world carbon dioxide emissions by 2030. Achieving that in the U.S. would require a 5 percent annual decrease in carbon emissions from fossil fuels, which would quadruple the actual rate of decline from the mid-aughts to 2017 (see technical note at end). And right now we’re going in the wrong direction: The Rhodium Group estimates that U.S. CO2 emissions rose 3.4 percent in 2018.

With a challenge like that ahead of us, we can’t afford to take any option off the table. As I argued recently, a carbon tax alone will not do the job. But neither will anything else. We need to throw everything we’ve got at the climate crisis, and that definitely includes the most economically efficient tool.

2. A carbon tax will make everyone a partner in the effort.

Addressing the climate crisis is going to demand a heavy dose of government intervention in the economy. But it will require more than that. A carbon tax will deliver economy-wide impact, giving every business and household incentives to change how they produce things and what things they buy. Getting the job done will take billions of dollars in public investments and millions of smaller decisions in the marketplace. A carbon tax will make more of the latter happen.

3. A carbon tax can affect industries that are hard to regulate.

There’s no question that performance standards and other regulations must be a major part of climate policy. But not everything lends itself to such regulation. As energy analyst Hal Harvey explained to Vox’s David Roberts late last year:

It’s hard to set a performance standard that works for glass, pulp and paper, steel, chemicals, and so forth. So in those realms, setting a price is a nice way to handle it. Then businesses can simply internalize the costs and make better decisions.

4. A carbon tax makes everything else we need to do easier.

Want to subsidize renewables? Higher fossil fuel prices will allow smaller subsidies to close the cost gap between carbon-based and renewable power. The same amount of spending on subsidies will then bring more renewables online.

Want to incentivize clean energy investments, like energy efficiency? Higher fossil fuel prices shorten the payback period on  those investments. Again, we’ll be able to reduce the degree of subsidies or other inducements required to get households and businesses to make those investments.

Carbon taxes can even replace some regulatory efforts. Citizens’ Climate Lobby argues that its fee-and-dividend proposal could reduce emissions in the power sector more and faster than President Obama’s Clean Power Plan proposal. That means regulatory efforts could concentrate instead on sectors, like transportation and buildings, that are less responsive to energy pricing signals than power generation.

5. A carbon tax can affect emissions beyond our borders.

It’s not enough to reduce U.S. emissions. The rest of the world must do its part. (Of course, right now the rest of the world is saying that about us.) A carbon tax with a border adjustment can pressure other countries to impose their own robust carbon pricing measures. The border adjustment adds a fee to imports tied to the level of carbon emissions required to make that product. (This is, admittedly, not an easy thing to do. Adele Morris of The Brookings Institution treats the complications in a policy brief.)

The border adjustment would be waived on imports coming from countries with carbon pricing equivalent to ours. Each country would face a choice: Pay the U.S. a border adjustment on your exports, or pay yourself the equivalent amount via a carbon tax. For countries that export to the U.S. market, that shouldn’t be a hard decision.

6. A carbon tax will raise revenue that can be used for other climate mitigation programs.

A Green New Deal will create lots of jobs primarily by spending lots of money — rebuilding the power grid, subsidizing clean energy, retrofitting buildings, redesigning cities to be less automobile-dependent, creating an infrastructure to recharge electric cars, etc. That money comes from somewhere, and a carbon tax is a logical source of funds — especially a robust tax that would, in the out years, bring in hundreds of billions of dollars per year.

This is only half an argument for a carbon tax, however, because there are reasons based in economic justice to use the revenue differently. Any carbon tax will hit low-income households proportionally harder than high-income ones, and some or all of the revenue ought to be used to offset the tax’s regressive effects. Fortunately, there are many progressive funding streams — including taxes aimed at high incomes, wealth, or financial transactions — for raising the revenue to fund a Green New Deal. But if the only politically practical way to pay for a Green New Deal requires some carbon tax revenue, the revenue will be there.

*   *   *

A carbon tax was never an easy sell on its own, and it won’t be an easy sell as part of a Green New Deal either. David Leonhardt at The New York Times just posted a good history of its difficult political fortunes, and comes down about where we are:

The better bet seems to be an “all of the above” approach: Organize a climate movement around meaningful policies with a reasonable chance of near-term success, but don’t abandon the hope of carbon pricing. Most climate activists, including those skeptical of a carbon tax, agree about this.

Carbon tax advocates should take this call to heart. Even with a Democratic takeover in 2020 — which is no sure thing — the U.S. is some years away from either a Green New Deal or a carbon tax. We should use that time to make sure the ultimate answer is “both.”

Here’s how we calculated our figures in the first numbered paragraph: CTC’s carbon-tax spreadsheet model (downloadable Excel file) puts U.S. CO2 emissions from fossil fuels at 5,409 million metric tons (MMT) in 2010 and 4,992 MMT in 2017. With Rhodium’s 3.4% one-year increase, emissions were 5,162 MMT in 2018. To cut that to 2,704 MMT (half of 2010 emissions) in 2030 requires a 5.2 percent annual drop (calculated by exponentiating 2704/5409 to the 1/12 power – 12 years – which is 0.948). A similar calculation from 2005 emissions of 5,822 MMT to the 2017 figure of 4,992 MMT yields an average annual drop of 1.3% over those 12 years.

From Thomas Piketty: A Project to Save Europe . . . and the Climate

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The following statement was published today in The Guardian under the headline, Our Manifesto to Save Europe from Itself, under the signature of Thomas Piketty, the French economist who rose to global renown with the 2013 publication of his scholarly work, Capital in the Twenty-First Century.

The statement, co-signed by over one hundred European economists, outlines a plan to revitalize the European Union with with a “new, sovereign European assembly capable of producing a set of fundamental public goods and services in the framework of a lasting and solidarity-based economy,” paid for by a suite of “four major [new] European taxes” including a carbon tax set at a minimum of 30 euros per metric ton (equivalent to around $31 per U.S. short ton).

While the proposal presumably was provoked by the ongoing “Gilets Jaunes” protests rocking France, its ambitions are far greater than simply responding to the current unrest. We are of course encouraged that the proposed program includes a carbon tax.

We are grateful to the editors of The Guardian for publishing the manifesto in full. The original version on The Guardian’s site includes a complete list of signatories. We have changed European syntax in some places to American style and have bolded passages deserving emphasis.

  — Carbon Tax Center

Since the election of anti-European governments across the EU, and with Brexit looming, it is no longer possible to continue as before. We cannot simply wait for the next departures, or further dismantling without making fundamental changes to present-day Europe.

Our continent is caught between political movements whose program is confined to hunting down foreigners and refugees, on one hand, and on the other those who claim to be European but in reality continue to consider that hardcore liberalism and the spread of competition are enough to define a political project. They don’t recognize that this lack of social ambition is what leads to feelings of abandonment.

French “Gilets Jaunes” protesters in Paris Saturday, Dec 8.

There are some movements attempting to end this fatal dialogue and address the structural problems that have arisen after a decade of economic crisis. There is no lack of these specifically European-critical situations: structural under-investment in the public sector, particularly in training and research, a rise in social inequality, acceleration of global warming and a crisis in the reception of migrants and refugees. But these movements often have difficulty in formulating a coherent alternative project, and in describing precisely how they would like to organize the Europe of the future.

This is why we, European citizens from different backgrounds and countries, are today launching this appeal for the in-depth transformation of the European institutions and policies.

Our manifesto contains concrete proposals, in particular a project for a democratization treaty and a budget project – and we have made it all publicly available. Our ideas may not be perfect, but they do have the merit of existing. The public can access them and improve them.

They are based on a simple conviction: Europe must build a new model to ensure the fair and lasting social development of its citizens. The only way to persuade them is to abandon vague and theoretical promises.

If Europe wants to restore solidarity with its citizens it can only do so by providing concrete evidence that it is capable of establishing cooperation and by making those who have gained from globalization contribute to the financing of public-sector good. That will mean making large firms contribute more than small and medium businesses, and the richest taxpayers paying more than poorer taxpayers. This is not the case today.

Our proposals are based on the creation of a budget for democratization that would be debated and voted on by a new, sovereign European assembly. This will at last enable Europe to equip itself with a public institution capable of dealing with crises in Europe immediately and of producing a set of fundamental public goods and services in the framework of a lasting and solidarity-based economy. The promise made at the treaty of Rome of “harmonization of living and working conditions” will finally become meaningful.

This budget, if the European assembly so desires, will be financed by four major European taxes, the tangible markers of this European solidarity. These will apply to the profits of major firms, the top incomes (over €200,000 a year), the highest wealth owners (over €1m ) and carbon emissions (with a minimum price of €30 a tonne).

If it is fixed at 4% of GDP, as we propose, this budget could finance research, training and the European universities, an ambitious investment program to transform our model of economic growth, the financing of the reception and integration of migrants, and the support of those involved in carrying out this transformation. It could also give some budgetary leeway to member states to reduce the regressive taxation that weighs on salaries or consumption.

The issue here is not one of creating a transfer of payments across Europe – taking money from the “virtuous” countries to give it to those that are less so. The project limits the gap between expenditure deducted and income paid by a country to a threshold of 0.1% of its GDP – this could only be increased should there be consensus to do so.

This threshold can be raised in case there is a consensus to do so, but the issue is primarily of reducing the inequality within countries, not between them, and of investing in the future of all Europeans. But those calculations would exclude spending that benefits all countries equally, such as action on climate change. Because it will finance European public goods benefiting all countries, the budget for democratization will de facto also foster convergence between countries.

Because we must act quickly but we must also get Europe out of the present technocratic impasse, we propose the creation of a European assembly. This will enable these new European taxes to be debated and voted as also the budget for democratization. This European assembly can be created without changing existing European treaties.

The assembly would, of course, have to communicate with the present decision-making institutions (in particular the Eurogroup in which the ministers for finance in the eurozone meet informally every month). But, in cases of disagreement, the assembly would have the final word. If not, its capacity to be a locus for a new transnational political space where parties, social movements and NGOs would finally be able to express themselves would be compromised.

Equally its actual effectiveness, since the issue is one of finally extricating Europe from the eternal inertia of intergovernmental negotiations, would be at stake. We should bear in mind that the rule of fiscal unanimity in force in the European Union has for years blocked the adoption of any European tax and sustains the eternal evasion into fiscal dumping by the rich and most mobile, a practice which continues to this day despite all the speeches. This will go on if other decision-making rules are not set up.

Given that a newly created European assembly would have the ability to adopt taxes and to affect the very core of the democratic, fiscal and social compacts of states, national and European parliamentarians must be central. This is why we propose, in the democratization treaty available online, that 80% of the members of the European assembly should be from national parliaments, with 20% from the present European parliament.

This choice merits further discussion. In particular, our project could also function with a lower proportion of national parliamentarians (for instance, 50%). But in our opinion an excessive reduction of this proportion might detract from the legitimacy of the European assembly in involving all European citizens in the direction of a new social and fiscal pact, and conflicts of democratic legitimacy between national and European elections could rapidly undermine the project.

Thus national elections will de facto be transformed into European elections. National elected members will no longer be able to simply shift responsibility on to Brussels and will have no other option than to explain to voters the projects and budgets they intend to defend in the European assembly. By bringing together the national and European parliamentarians in one single assembly, habits of co-governance will be created which at the moment only exist between heads of state and ministers of finance.

We now have to act quickly. While it would be preferable for all EU countries to join the project without delay – especially the four largest countries in the eurozone (which represent more than 70% of the GNP and population) – it is designed so that it can be adopted and implemented by any set of countries that wish to do so. It enables those who wish to make immediate progress by adopting this project to do so right now.

We must all assume our responsibilities to participate in a detailed and constructive discussion on the future of Europe, lest our continent is left to sink further into damaging division.

Thomas Piketty is professor of economics at the Paris School of Economics.

Other signatories: Sébastien Adalid, Michel Aglietta, Nacho Alvarez, Julie Bailleux, Marija Bartl, Marie-Layre Basilien-Gainche, Myriam Benlolo Carabot, Loïc Blondiaux, Karolina Borońska, Andreas Botsch, Patrick Boucheron, Emmanuel Bouju, Begnina Boza-Kiss, Hauke Brunkhorst, Bojan Bugarič, Klaus Busch, Julia Cagé, Lucas Chancel, Christophe Charle, Christian Chavagneux, Amandine Crespy, Fabio De Masi, Anne-Laure Delatte, Donatella Della Porta, Yves Deloye, Paul Dermine, Brigitte Dormont, Guillaume Duval, Susanne Elsen, Emanuele Ferragina, Bastien François, Philippe Frémeaux, Diane Fromage, Miguel Gotor, Julien Grenet, Ulrike Guérot, Gabor Halmai, Pierre-Cyrille Hautcoeur, Stéphanie Hennette, Rudolf Hickel, Mario Hübler, Élise Huillery, Simon Ilse, Liora Israel, Michael Jacobs, Yannick Jadot, Luis Jimena Quesada, Christian Joerges, Kädtler Jürgen, Iphigénie Kamtsidou, Jakob Kapeller, Pascale Laborier, Justine Lacroix, Sylvie Lambert, Camille Landais, Sandra Laugier, Rémi Lefebvre, Steffen Lehndorff, Nicolas Leron, Ulrike Liebert, Pascal Lokiec, Philippe Maddalon, Mikael Madsen, Paul Magnette, Maria Malatesta, Francesco Martucci, Frédérique Matonti, Dominique Meda, Robert Menasse, Sophie Meunier, Zoltan Miklosi, Eric Millard, Robert Misik, Éric Monnet, Alberto Montero, Daniel Mouchard, Ulrich Mückenberger, Jan-Wener Muller, Olivier Nay, Sighard Neckel, Fernanda Nicola, Silke Ötsch, Walter Ötsch, Bruno Palier, Mazarine Pingeot, Martin Pigeon, Sébastien Platon, Thomas Porcher, Christophe Prochasson, Thomas Ribemont, Julie Ringelheim, Daniel Roche, Pierre Rosanvallon, Ruth Rubio Marin, Guillaume Sacriste, Emmanuel Saez, Gisele Sapiro, Francesco Saraceno, Thomas Sauer, Patrick Savidan, Frédéric Sawicki, Axel Schäffer, Alan Scott, Thomas Sterner,Julien Talpin, Stéphane Troussel, Laurence Tubiana, Boris Vallaud, Fernando Vasquez, Antoine Vauchez, Brigitte Young, and Gabriel Zucman

Revenue-Neutrality Rises from the Dead

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On Wednesday, Rep. Ted Deutch (D-FL) and a small bipartisan group of cosponsors introduced the strongest carbon pricing bill dropped into the Congressional hopper in years. H.R. 7173 closely follows the fee-and-dividend proposal long championed by Citizens’ Climate Lobby, employing not just the dividend template but the robust price trajectory.

The Deutch bill sets an initial tax rate of $15/metric ton, rising by $10/tonne annually thereafter. The increase rate would rise to $15/tonne if annual emissions targets are not met. All of the revenue, net of expenses, would go toward equalized dividends to all American households, based on household size, making the overall proposal revenue-neutral.

H.R. 7173 includes a border adjustment for both imports and exports, to protect the competitiveness of American manufacturing. And it restricts the government’s powers to regulate greenhouse gas emissions, at least for their impact on global warming — a limitation that may be more symbolic than substantive, given the modest emissions impact of President Obama’s signature Clean Power Plan, especially when compared to likely reductions from the new bill’s steep price trajectory.

The Deutch fee-and-dividend bill would surpass the most aggressive recent Democratic carbon tax after five years and would have twice the impact soon after.

The buzz thus far has focused on the bill’s initial cosponsors, two of whom are Republicans: Brian Fitzpatrick (R-PA) and Francis Rooney (R-FL). This is not their first trip to the rodeo. Both also cosponsored a much weaker carbon tax bill introduced in July by Carlos Curbelo, who lost his bid for reelection. A third Republican, Dave Trott (R-MI), has since signed on. The two Democratic cosponsors are Charlie Crist (D-FL) and John Delaney (D-MD).

It’s important not to make too much of the bipartisanship on display here. Fitzpatrick, Rooney, and Trott represent an underwhelming 1.5% of the incoming Republican caucus in the House. More particularly, they constitute a mere one-seventh of the surviving Republican members of the all-too-quiescent Climate Solutions Caucus, which is losing most of its GOP contingent to defeat or retirement. Deutch and Curbelo were the founding chairs of the Caucus.

The larger substantive story here is the long-term impact of the Deutch proposal. His $15/tonne starting tax rate is lower than other bills introduced in this session, which range from $24/tonne (Curbelo) to $49/tonne (two Democratic proposals, S. 1639 and H.R. 4209). But the rates in those bills would generally rise by only 2% above inflation annually. Deutch’s proposal, though it starts from a lower base, would outstrip them in impact after just five years, with the differential only widening over time.

According to the Carbon Tax Center spreadsheet model, Deutch’s bill would reduce U.S. CO2 emissions below 2017 levels by 35% in a decade. The best of the Democratic proposals would see a smaller reduction of 25%.

The chances of any carbon tax bill passing in the next Congressional session are close to nil. It is hard to imagine such a proposal getting a floor vote in a chamber led by Sen. Mitchell McConnell (R-Coal Country, aka Kentucky). Even if it did, the veto pen of Donald Trump awaits. Nevertheless, the next two years will allow a debate within the Democratic Party over what its position will be on climate change in the 2020 campaign and, assuming that election goes well for them, in the 2021-22 Congressional session.

The Deutch bill is clearly a contender in that debate. And the more Republican cosponsors Deutch and CCL can recruit this session, the more likely it can become that a robust carbon tax, with revenues going back to American households, will be at least part of the answer.

The other major contender for a Democratic climate program right now is the as-yet-unspecified Green New Deal with major green infrastructure investments possibly funded by a carbon tax. Interestingly, the carbon tax bill with the most support in the House at present, with 21 cosponsors, would also devote most of the revenue to infrastructure, though not specifically green infrastructure. That’s H.R. 4209, the America Wins Act sponsored by longtime carbon tax champion Rep. John Larson (D-CT).

The important thing for carbon tax advocates to remember is that the best bill is the one that can pass. So may the best bill win.

Other States (besides WA)

This page covers — or at least touches on — carbon-tax campaigning and organizing in states other than Washington.

Click here to read about the 2018 Washington carbon-tax initiative I-1631. Click here to learn about the valiant but doomed effort to pass the 2016 Washington state initiative I-732. For an overview of state carbon taxes, click here.

These bulleted links can help you navigate quickly around this page:

Carbon tax organizing in Oregon

Almost a decade ago, the Beaver State was the locus of the most detailed examination of a carbon tax for any U.S. state, paid for by a $200,000 grant from the Oregon legislature. The 2013 report, Carbon Tax and Shift: How to Make it Work for Oregon’s Economy, by economists at Portland State University’s Northwest Economic Research Center, examined the effects of a state-wide carbon tax patterned after British Columbia’s carbon tax.

Oregon carbon tax supporters at “Salmon at the Redd”

Oregon carbon tax supporters at “Salmon at the Redd”

Like BC’s, the carbon tax examined for Oregon was largely revenue-neutral: one scenario applied 70% of the tax revenues to cut corporate taxes, 20% to cut personal income taxes, and 10% to reinvest in industrial energy efficiency programs; the other apportioned 50% of the revenues to cut corporate taxes, 25% to cut personal income taxes, and 25% for industrial and residential energy efficiency and transportation infrastructure.

The Oregon tax would have started at $10/ton of CO2 and risen by $10 per year to $60/ton, or roughly twice the level of BC’s tax. By 2025, according to the report, it would have reduced the state’s greenhouse gas emissions by 12-13% below baseline projections while generating over $2 billion a year in revenue. The proposed policy became the centerpiece of HB 3252, a bill aimed at establishing a state-wide carbon tax. The grassroots movement to advance the tax was led by Oregon Climate, which spread awareness via canvassing, tabling and lobbying. Oregon Climate also sought to bridge art with climate advocacy, culminating in “Salmon at the Redd,” a community project in which residents created tiles for a mosaic illustrating what they loved about their state.

Unfortunately, the carbon tax campaign was sidelined in favor of Senate Bill 1547, which in 2016 established a Renewable Portfolio Standard directing Oregon utilities to ramp up wind and solar facilities to supplement the state’s considerable hydro-electric supplies. Oregon Climate then shifted its focus to a national effort to help other localities advocate for carbon pricing.

Demonstrators protest outside the Oregon State Capitol in Salem, Feb. 6, 2020. (Andrew Selsky/AP, via WaPo)

In 2019 and again in 2020, voting on a statewide carbon cap-and-trade bill was torpedoed when Republican lawmakers walked out of the statehouse, with some going into hiding to prevent the state police from rounding them up — a spectacle that generated national headlines. The walkouts were fanned by rural-based protests amid speculation that some of the “grassroots” opposition was corporate-funded.

In May 2021, a thoughtful piece in the Tacoma (WA) News-Tribune, Can Oregon’s Democrats Learn From B.C.’s Carbon Tax?, contrasted the transparency, simplicity and revenue-neutrality of British Columbia’s politically successful carbon tax with Oregon’s complex and unsuccessful cap-and-trade approach. State senator Jeff Golden, a strong supporter of the legislation, later bemoaned its complexity, which, he said, lent itself to damaging misinformation. “The more details, the more twists and turns and bells and whistles, the more opportunities there are to distort it,” Golden said in the story.

Carbon tax organizing in New York

New York should be a strong venue for pursuing a state carbon tax. In October 2012, Superstorm Sandy made a climate-change believer of Gov. Andrew Cuomo. who declared, “[C]limate change is a reality, extreme weather is a reality, it is a reality that we are vulnerable,” after the tidal surge from the storm inundated coastal communities and brought unprecedented devastation to hundreds of miles of shoreline. Moreover, not just coastal residents but upstate citizens politicized by fracking have rallied around the Jacobson-Delucchi “100% Wind, Water and Sunlight” global scenario for NY State propounded in the authors’ compelling journal article in Energy Policy.

Two Carbon Tax Center officers — director Charles Komanoff and board chair Alex Matthiessen — outlined the rationale for and distributional impacts of a potential $20/ton (of CO2) NY State carbon tax in a 2013 op-ed for the Huffington Post (cross-posted here). Our brief envisioned applying the lion’s share of carbon tax revenues to reduce the statewide sales tax rate by a full percentage point — anticipating the proposed sales tax-cut centerpiece of Carbon Washington’s Measure I-732, discussed above. “Leftover” revenues could help fortify the state’s infrastructure to withstand future storms and/or expedite and incentivize homeowners’ and business owners’ installation of photovoltaic electricity generating capacity.

A NY State carbon tax bill with a more aggressive design was introduced in Sept. 2015 by two Democratic legislators, Assemblyman Kevin Cahill of Dutchess County and Sen. Kevin Parker of Brooklyn. Their bill, A8372 Cahil / S6037 Parker, proposed taxing CO2 emissions from coal, oil, natural gas and biofuels at $35 per ton initially, with the rate increasing annually by $15/ton, to a ceiling of $185 per ton. The bill proposed returning 60% of revenues to low- and moderate-income households, with the remaining funds used to prepare for climate change, invest in renewable energy, and build transportation infrastructure.

The bill languished but circa 2019 was revived as part of an omnibus Climate and Community Investment Act proposed by a statewide climate coalition called NY Renews that includes influential groups like building service workers union 32BJ SEIU and Environmental Advocates of NY.  In 2019 the coalition succeeded in pushing through an ambitious though mostly target-setting and task-force-establishing bill, the Climate Leadership and Community Protection Act. Prospects for the new bill including the carbon tax appeared uncertain at best in the spring of 2021 when this page was last updated.

New York League of Conservation Voters Member Andrew Ratzkin outlined the case for a NY State carbon tax in a compelling op-ed in Crain’s New York Business, in July, 2015. In mid-2016 Ratzkin published a lengthy article in the Columbia Journal of Environmental Law, You Say You Want a REV Solution, critiquing the state’s “Reforming the Energy Vision” blueprint as inferior policy to a statewide carbon tax.

Carbon tax organizing in Massachusetts

The bay state’s Global Warming Solution Act of 2008 mandated a 25% reduction of CO2 emissions below 1990 levels by 2020 and an 80% reduction by 2050. Befitting its “promising” status in CTC’s report, Opportunities for Carbon Taxing at the State Level, Massachusetts is a hotbed of advocacy for a statewide comprehensive carbon tax to meet and surpass those targets.

The most politically popular bill appears to be S.1821, An Act combating climate change, sponsored by State Senator Mike Barrett (D-Lexington). Barrett’s nearly identical 2016 bill S.1747 had 47 co-sponsors, and this year he has 64, nearly one-third of the legislature,

The Barrett bill specifies an initial carbon fee of $10/ton of CO2, increasing in $5/ton annual increments to $40/ton, after which the legislature will consider increases or decreases. The bill establishes a fee-and-rebate system, with 100 percent of carbon revenues collected from fossil fuel providers returned pro rata to state residents and to employers based on the number of employees.

S.1821 will direct additional rebates to households in car-dependent areas and to energy-intensive businesses. As with the similar Citizen Climate Lobby fee-and-dividend proposals at the federal level, the rebate system is intended to be income-progressive (with low- and moderate-income households being net beneficiaries while wealthier households would be net payees) while preserving all households’ incentives to reduce fossil fuel use in order to pay less in fees.

Supporters of Barrett’s prior bill, S.1747, cited broad support from businesses including financial services, healthcare, hospitality, food services, transportation, design and technology companies touting its potential to incentivize innovation and preserve competitiveness. At an Oct. 2015 legislative hearing, Business Leaders for Climate Action released an endorsement letter backing the Barrett bill, signed by over one hundred state businesses and business leaders.

Reports by the Massachusetts Department of Energy Resources and Regional Economic Model Inc concluded that S.1747 would slash emissions while boosting employment and overall economic activity.

Mass C-tax emissions projection

Projected Emissions After Imposition of $5/ton Carbon Fee, rising $5/yr to $40 (Prepared for Massachusetts Department of Energy Resources)

On the House side, State Representative Jennifer Benson (D-37th Middlesex) is sponsoring H.1726, “An Act to promote green infrastructure, reduce greenhouse gas emissions, and create jobs.” The Benson bill adheres to the Barrett bill’s carbon-fee-and-rebate model but dedicates 20 percent of revenues to fund green infrastructure directly, such as public transportation, renewable energy, energy efficiency, and protection against the expected impacts of climate change. With 80 percent of revenues applied to rebates rather than 100 percent, the Benson bill would likely have a somewhat less income-progressive outcome than the Barrett bill, though the difference would be attenuated by the green investments.

Two other energy-related bills also include carbon pricing provisions:

  • Senator Marc Pacheco (D-Taunton)’s S.479, An Act relative to 2030 and 2040 emissions benchmarks, would authorize the state to “create, expand, or join market-based compliance mechanisms, including but not limited to greenhouse gas emissions trading and carbon pricing programs,” in order to achieve the greenhouse gas emissions reductions required by the Massachusetts Global Warming Solutions Act.
  • Solomon Goldstein-Rose (3rd Hampshire)’s HD.1948, An Act relative to creating energy jobs, would establish a carbon-fee-and-rebate system similar to those in the Barrett and Benson bills as part of a larger initiative to make Massachusetts “the Silicon Valley of the new energy economy.”

Analysis by the Massachusetts Department of Energy Resources suggests that carbon pricing would deliver the greatest CO2 reductions of any policy while enhancing state and local employment. Advocates are using those findings, along with the potential to cut health care costs through reduced air pollution, to convince Governor Charley Baker to support carbon pricing legislation.

In Jan. 2017, Dave Anderson of the Massachusetts-based Energy & Policy Institute posted a  provocative, well-documented piece, Under Rex Tillerson, ExxonMobil Lobbied Against Carbon Tax Bills. In his article Anderson revealed 2016 lobbying disclosures filed with the Secretary of the Commonwealth of Massachusetts indicating that a lobbyist paid by ExxonMobil opposed the revenue-neutral carbon tax bill S.1747, as well as other climate-related bills.

For more information on carbon pricing in Massachusetts, view this short video on carbon pricing by Business Leaders for Climate Action, or contact info@blcama.org.

Carbon tax organizing in Rhode Island

With its coastline-defined topography, the Ocean State is directly exposed to climate change impacts of rising sea levels, flooding and storms. Rhode Island is also home to U.S. Senator Sheldon Whitehouse, whose 100 weekly “Time to Wake Up” speeches on the Senate floor in 2013-2015 established him as Capitol Hill’s most forceful voice for climate action. The Senator’s American Opportunity Carbon Fee Act of 2014 would establish a national carbon tax.

Detail from REMI study of a Rhode Island carbon tax.

Detail from REMI study of a Rhode Island carbon tax.

With federal carbon pricing blocked by the GOP, a coalition of RI environmental, faith and business groups formed Energize Rhode Island in 2015 to advocate for state carbon pricing legislation. In January 2016 State Rep. Aaron Regunberg (D-Providence) introduced House Bill 7325, along with 40 co-sponsors. H7325 specifies an initial carbon fee of $15/ton of CO2, increasing in $5/ton annual increments. Seventy percent of the revenue would be refunded via per capita and per employee rebates to Rhode Island families and businesses, with 25% invested in renewable energy and efficiency programs.

The Energize Rhode Island Coalition touts a REMI study finding that H7325 will create over a thousand new jobs in the first year alone — a major economic boost for a state whose 2014 population was just 1.055 million — while emission reductions quickly reach double digits. Job growth will continue apace in subsequent years, according to the study, as Rhode Islanders save much of the nearly $4 billion a year they now spend on fossil fuel energy, all of it imported from outside the state.

Carbon tax organizing in Vermont

The conversation among policymakers in Vermont has begun to shift from whether the state should price carbon pollution to how, reports Tom Hughes of VPIRG, in Feb 2016.

The carbon-pricing campaign is led by Energy Independent Vermont, a coalition comprising the state’s top environmental organizations, the renewable-energy leaders who have made Vermont a solar powerhouse, iconic Vermont businesses like Ben & Jerry’s and Seventh Generation, the state’s low-income weatherization agencies, interfaith religious leaders, and academics at U-Vermont’s Gund Center for Ecological Economics. Non-member allies of Energy Independent Vermont include the Vermont Council on Rural Development and a CERES-supported group of industry leaders including Sugarbush Resort, Burton and King Arthur Flour.

The campaign engaged Regional Economic Models, Inc. (REMI) to conduct an analysis of a pollution tax set at $100 per metric ton of CO2, with 90% of revenues recycled as cuts to the state income tax, corporate taxes and a reduction in the sales tax, and the remaining 10% reserved for low-income weatherization and other energy-saving investments. As modeled, the tax would exempt electric generation, since that is already covered with a carbon pricing regime through RGGI, the Regional Greenhouse Gas Initiative. The REMI study concluded that over the first decade this measure would cut carbon emissions from heating and transportation by 31% while generating 2,400 new jobs, raising gross state domestic product by $100 million, and adding more than $150 million a year to real disposable personal income.

Two bills with similar tax rates and revenue treatment were introduced in the Vermont General Assembly in early 2015, according to Hughes. Energy Independent Vermont delivered 25,000 petitions in favor of carbon pricing to Vermont legislators in November 2015, he reports. In January 2016 Gov. Peter Shumlin’s administration called for the state to “investigate and pursue options for market-based greenhouse gas emission policies.” A May 26 piece by Energy Independent Vermont activist Luc Reid in the Williston (VT) Observer, The unsuspected upsides of a carbon pollution tax, did a nice job of laying out the “income progressivity” of EIV’s carbon tax proposal.

The November election win of Republican Lieutenant Governor Phil Scott to the governor’s office will set back efforts to enact a Vermont carbon tax, Seven Days political columnist Terri Hallenbeck reported in early December.

Boulder (Colorado)

2015 Revenue distribution from Boulder’s carbon tax

The municipality implemented the United States’ first tax on carbon emissions from electricity, on April 1, 2007, at a level of approximately $7 per ton of carbon dioxide. According to the City of Boulder, the tax was costing the average household about $1.30 per month, with households that use renewable energy receiving an offsetting discount. The city expected the tax to generate about $1 million annually until its expiration in 2012, with the revenues used to fund Boulder’s climate action plan to further reduce energy use. In June 2009, the City Council voted unanimously to raise the tax level. Although the new rate was not originally specified, the expected increase in revenues, some $810,000 annually,  suggests that the increase is on the order of 80%, or perhaps $5-$6 per ton of CO2 (on top of the original $7/ton). In 2012, residents voted to continue the tax at the 2009 rate for another five years.

Other States?

Please send us (info@carbontax.org) your reports, or even just ideas, on state-level carbon taxes, so we can post them here.

(coming soon: Utah, drawing on this link and that link)

States _ New

No U.S. state has a carbon tax. An attempt to break through with a tax on carbon emissions in the state of Washington was defeated at the ballot in Nov. 2016, as we recount below. Nevertheless, Washington and 7 other states (including Washington DC, which for linguistic simplicity we are calling a state) are considered “promising” arenas for enacting state carbon taxes, in a comprehensive 2017 report by the Carbon Tax Center.

This page is sprawling, reflecting the intensity and breadth of state carbon tax organizing. These links can help you navigate:


Also of interest: Minnesota state auditor Rebecca Otto has promised that her ambitious proposal for a revenue-neutral carbon fee will be a big issue in the 2018 campaign to succeed Mark Dayton as governor in 2018. Read our post, Minnesota state auditor stakes campaign for governor on carbon dividend.

CTC Report Ranks the States on Carbon Tax Potential

The report was written by Yoram Bauman, who spearheaded the Washington state carbon tax effort, and Carbon Tax Center director Charles Komanoff. It classifies the 51 states into five categories of carbon tax readiness ranging from “promising” to “very challenging.” (See map.)

Cover page of CTC’s new report rating the states’ carbon tax potential.

As the map shows, the eight most promising states are Connecticut, Hawaii, Illinois, Maryland, Massachusetts, New York, Washington and the District of Columbia. (Follow these links for historical perspective and other information on Massachusetts, New York, and Washington that isn’t in our new report.) We rate another 17 states as having “potential” for enacting state carbon taxes, with some having relatively clear paths while others appear to face legal or ideological constraints. (Follow these links for additional information on Oregon, Rhode Island, Vermont, and—as a bonus—the city of Boulder, Colorado.)

The other 26 states are a lot less promising. Our report explains why.

The rankings are just one aspect of the report. Each state gets an overview, a brief analysis of CO2 emissions, summaries of local climate impacts and current climate policies, a sketch of carbon pricing activism, a brief look at climate ideology and politics, recent polling results, and, where applicable, a summary of ballot measures and proposed legislation.

The report is comprehensive in its coverage but concise in each state’s analysis and ranking. It clocks in at 120 pages, making it huge (a 14 MB pdf), but it’s well worth perusing for info on your state and how it stacks up with others. Click here to download. (A reduced-size pdf under 2 MB is available for those with slower connections, click here.)

Further below is extensive coverage of the Washington state I-732 campaign and its aftermath, along with info on carbon tax organizing in five other states as well as Boulder, CO’s carbon tax on electricity generation. Click on those links and read our introduction for context.

Also see our August 2016 post reporting on the new Brookings Institution report, State-Level Carbon Taxes: Options And Opportunities For Policymakers. It’s essential reading for people seeking to advance carbon taxes at the state level and anyone who wants to understand the nuts and bolts of designing and implementing actual carbon taxes.

State Carbon Taxes: An Introduction

“It is one of the happy incidents of the federal system that a single courageous state may, if its citizens choose, serve as a laboratory; and try novel social and economic experiments without risk to the rest of the country.” — Justice Louis D. Brandeis (New State Ice Co. v. Liebmann, dissenting opinion, 1932)

This page covers organizing campaigns for U.S. carbon taxing at the state level, with sections on Washington State, Oregon, New York, Massachusetts, Rhode Island and Vermont.

Oregon Climate logo _ 26 July 2016With a national carbon tax blocked by the denialist Republican majority in Congress and a carbon-besotted White House, a growing number of climate advocates are heeding Justice Brandeis’s advice and are organizing at the state level. “Retail” politics, it is thought, might assuage concerns over outside-the-box ideas like carbon taxing, perhaps as occurred in the successful push for marriage equality (the right to same-sex marriage) which began and spread as state-level campaigns.

Moreover, progressive and popular options for distributing carbon tax revenues can be made more tangible at the state level than the federal. This point was underscored by a Jan. 2015 study by the Institute for Taxation and Economic Policy ranking the 50 states on their tax incidence that established that states are more regressive taxers than the federal government. In particular, sales taxes could be swapped out for carbon taxes, as advocates in Washington State proposed in their I-732 ballot initiative in 2016 (full discussion further below).

Not all states are riven by ideological resistance. While America’s geographical diversity can impede national unity, it has left some states less beholden to fossil fuel interests. Naturally, advocates are focusing on those states. (In March 2016, Resources for the Future posted two superb summaries of proposals in six states to adopt carbon taxes; the first focused on the tax rates (see graphic below), while the second addressed revenue treatment and household “incidence.”)

Graph courtesy of RFF. See link in adjoining paragraph.

Graph courtesy of RFF. See link in adjoining paragraph.

States have also pushed the envelope on issues like minimum wage and fuel-efficiency standards, moving the national discussion as they did so. In a 2016 op-ed in the New York Times, Georgetown University law professor David Cole ascribed the National Rifle Association’s success at strangling national gun-control regulations to a decades-long campaign that changed state constitutions and laws to protect the right to possess and carry guns. Less far afield is the fact that gasoline taxes first took root in a handful of Western states to fund road construction, before spreading to the rest of the country. State carbon taxes could, it is hoped, create a similar template leading eventually to federal enactment.

The EPA Clean Power Plan may have provided an opening for state carbon taxes through a provision allowing states to submit projected emission reductions from carbon taxes applied to power generation (unfortunately, reductions from carbon-taxing non-electric sectors such as transportation would not receive credit). A June 2015 report from the Niskanen Center concluded that even small state carbon taxes could effectuate the required emissions reductions in most cases, mirroring our own modeling results on the national level.

Still, state carbon taxing raises issues that don’t apply to a federal tax. State policy makers and advocates need to address these concerns:

  • Competitiveness: It would be hard for any one state to push its carbon tax too high, due to concerns over competitive advantage and inter-state “leakage” (e.g. driving out-of-state to fill up with untaxed gasoline).

Yet using some carbon tax revenues to reduce business taxes (as was proposed in Washington State) may soften concerns over economic impact. The cross-border issue may be less salient in larger Western states than in smaller East Coast states.

Jeff Renfro, a key member of a team at Northwest Economic Research Center that modeled a possible Oregon carbon tax, said:

We tried [in our modeling] to wreck the economy. We modeled a big tax – $100 a ton – with a relatively short phase-in period, and we assumed the government put the revenues toward non-productive reserves. Even in that scenario, we were surprised by how small the effects on employment were relative to the overall economy. (Interview with CTC researcher Matt Gordon, July 10, 2015)

  • Efficiency: Energy policy is largely determined at the federal level. Administrative costs could be disproportionately higher for state taxes, due to greater cross-border movements of electricity and fuels among states than between the U.S. and other nations. In some states, utility sector regulation may complicate efforts to tax fossil fuels sufficiently upstream.

Many states already have taxes on gas and electricity, however, and it shouldn’t be difficult to piggyback a carbon tax on those taxes without significantly increasing administrative burdens. British Columbia’s carbon tax program uses this technique, and reports the administrative burden as negligible.

  • Coverage: Only a national carbon tax will enable the U.S. to impose Border Adjustment Taxes to induce China and other countries to adopt their own taxes, which is a key benefit of pursuing carbon taxing. States cannot pursue a similar strategy without violating the commerce clause of the Constitution.

Although states may not tax imported goods, that prohibition shouldn’t be construed to mean they can’t tax imported electricity or fossil fuels that are then used within the state. In fact, some advocates see this as an opportunity for economic development; carbon-taxing out-of-state fossil-based electricity and fuels could stimulate growth in local renewables and energy-efficiency industries.

  • Local Policy: Every state has idiosyncracies. In Oregon, the constitution mandates that all revenues from taxing gasoline must be deposited in the Highway Trust Fund. In Washington, state law precluded carbon tax revenues from being used for dividends to the public. Yet this patchwork of state policies may be a motivating factor in driving a national policy. The complications of doing business in jurisdictions with varying policies have even driven some oil companies to demand more unified action on climate change.

That said, the 2016 elections further cemented the Denier (Republican) Party’s hold on state governments, as the New York Times graphic below illustrates.

Republicans hold control of the governor's office and the legislature in 24 states, while Democrats have that status in only six, according to this New York Times graphic.

Republicans hold control of the governor’s office and the legislature in 24 states, while Democrats have that status in only six, according to this New York Times graphic.


On the other hand, red states tend to be fossil fuel-dominated states already out of reach of state carbon-tax campaigns. Two states with past or present carbon tax organizing, WA and OR, have Democratic governors and legislatures. Two others, NY and CO, have Democratic governors but divided or uncertain legislatures. Massachusetts and Vermont have Democratic legislatures but Republican governors.

The 2016 Washington state carbon tax referendum: what happened

In 2015, grassroots advocates in Washington crafted a carbon tax ballot measure that, they hoped, would make theirs the first U.S. state with a carbon tax. Their Initiative 732 would have established a comprehensive statewide carbon tax reaching $25 per metric ton of CO2 in 2018 and rising thereafter at 3.5% faster than the general inflation rate. The initiative was decisively defeated, however, by a vote of 59% to 41%. We discuss I-732 and the divisiveness it spawned, directly below.

Gov. Inslee's just-proposed (Dec. 2016) carbon tax would dedicate a majority of revenue to funding education.

Washington Gov. Inslee’s just-proposed (Dec. 2016) carbon tax would dedicate a majority of revenue to funding education.

Five weeks after that vote, Washington Gov. Jay Inslee proposed a carbon tax whose level — starting in May 2018 at $25 per metric ton of CO2 and increasing thereafter at 3.5% a year faster than inflation — would be identical to that in I-732. The Seattle Times first reported the proposal, which is a key part of the governor’s fiscal plan, on Dec. 13. Inslee’s office has issued an informative 3-page policy brief outlining the intended uses of the carbon tax revenues; unlike I-732, which was designed to be nearly 100 percent revenue-neutral, the governor’s proposal, which requires legislative approval, is intended to patch big holes in the state budget. We hope to report on the progress of Gov. Inslee’s proposal shortly.

On Nov. 12 Carbon Washington, the grassroots advocacy group that gathered 360,000 signatures to put Measure I-732 on the November ballot, and then fought for its passage with a high-energy organizing campaign, issued a statement, Carbon tax friends, be proud of what we’ve accomplished. Here’s the opening paragraph:

Together, we accomplished something historic by putting the nation’s first statewide carbon tax before the voters. We showed that there is a strong desire for common-sense climate action in Washington State, and we influenced the national conversation on climate policy. We ran an honest, transparent, and positive campaign focused on addressing the climate and equity problems facing our society. We did all of that thanks to you.

CarbonWA says it is thinking through next steps and want[s] to hear supporters’ “thoughts on the election and where this movement that you helped build should go next.” The group invites feedback via email. Their terrific Web site, Yes on 732, is still up.

Seattle Time graphic. Earlier reports had the vote slightly closer.

Seattle Times graphic, downloaded Nov. 11. Earlier reports had the vote slightly closer. Official Nov. 13 update (see text) has same percentages.

As of Nov. 13, Washington’s Secretary of State was reporting 1,571,080 No votes vs. 1,091,626 Yes, a nearly 3-to-2 margin. Only King County, the state’s largest, which includes Seattle, voted majority Yes; all other 38 counties voted No to Measure 732.

In the aftermath of the election, the Alliance for Jobs and Clean Energy — the Washington confederation that became the locus of “green” opposition to I-732 — posted a five-page draft clean energy plan intended to fulfill its commitment to fashion an alternative policy to Carbon WA’s revenue-neutral carbon tax. The plan’s carbon tax, just $15 per ton of CO2 and with no increase beyond inflation unless as-yet-unspecified reduction targets are met, would be around half of the tax level specified in I-732; most emission reductions would come from investments in efficiency and renewables outlined but not specified in the draft. Alliance leaders pledged to push their plan to the legislature and vowed to put it on the ballot in 2017, if necessary, the Seattle Times reported on Nov. 12.

Top reads on the ballot battle (newest listed first):

The I-732 referendum received intense national as well as local coverage in the run-up to the election, in part because the split over the measure within the green movement made for a compelling (and disturbing story).

The best post-mortem we’ve seen is Marianne Lavelle’s Nov 9 story, Washington State Voters Reject Nation’s First Carbon Tax, for Inside Climate News. It’s an excellent overview of the competing perspectives of I-732 proponents and opponents (state purview vs. national, social-justice vs. economic, etc.) and has quotes from Washington social-justice advocates (who opposed the measure) and climate luminary James Hansen and CTC director Charles Komanoff, who supported it. Here, for example, is a quote from KC Golden, senior adviser to the Washington State nonprofit Climate Solutions:”

The people who came up with the idea of ‘revenue-neutral’ did it for a good reason, to defuse the partisan bomb that keeps us from getting everywhere on climate. But we can’t find any political ‘there’ there. To tell labor and communities of color, ‘We’re going to change the incentives and benefits are going to flow’ sounds…a lot like ‘trickle-down’ economics. They justifiably don’t trust that story.”

Draw your own conclusions.

Here are half-a-dozen other (pre-election) articles:

Our blog posts on I-732 (newest listed first):

The Carbon Tax Center strongly supported Carbon WA’s initiative and organizing campaign. Our blog posts during the few weeks before the election responded vigorously to attacks on Initiative 732. Earlier-dated posts mostly involved straight reportage about the merits of the initiative and the campaign to pass it.

I-732 history and details (This pre-Nov 2016) content has not been updated.)

The Evergreen State is blessed with abundant natural beauty — Mt. Rainier, the North Cascades, Puget Sound, the Olympic Peninsula and the Columbia River basin and gorge — with an outdoor culture to match. It was also wracked by drought and forest fires in 2015. In that year, carbon tax advocates under the banner of Carbon Washington began organizing for a ballot initiative mandating a state carbon tax. Measure I-732 would have taxed carbon emissions at an initial rate of $15 per ton of CO2, rising the following year to $25 per ton, and then increasing annually by 3.5% more than the inflation rate.

Graphic from http://yeson732.org/.

Graphic from http://yeson732.org/ highlights the tax benefits.

The tax, gracefully summarized last year by the Christian Science Monitor, would have used the expected $1.7 billion in annual revenue to overhaul Washington’s unusually regressive tax code. Most of the money was earmarked to lower the state sales tax from 6.5% to 5.5%. (While the state sales tax is 6.5%, the average combined local-state sales tax rate is 8.89%, the fifth highest in the country.) The annual increases in the carbon tax would have offset the rising value of the sales tax reduction, ensuring the measure stayed revenue-neutral. Another $200 million a year would have funded the state Working Families Rebate – an extension of the federal Earned Income Tax Credit. The Working Families Rebate was created in 2008 but never funded, and revenue from the carbon tax could have assisted 400,000 low-income working families. These two pieces made I-732 the state’s most progressive tax initiative since groceries were exempted from sales taxes in 1977. The remaining funds would have enabled the state to eliminate the business and occupation tax on manufacturing — a feature designed to win business support.

CTC researcher Matt Gordon visited Washington in June 2015 and met with ballot organizers there. He wrote a blog for us about Measure I-732 last July and another in August about backbiting against Measure I-732 by some veteran state environmental advocates. (The surprising opposition to I-732 was criticized by leading right-of-center economist Greg Mankiw in a New York Times opinion piece in early September, 2015, backing the measure.) Despite the opposition, Carbon Washington collected 360,000 petition signatures — over 100,000 more than the 246,000 required to put Measure I-732 on the November, 2016 ballot for a statewide up-or-down vote.

Keibun Mori, a former economist with the Washington State Energy Office, developed a carbon-tax spreadsheet model to predict revenue generation and CO2 reductions for the state from a carbon tax. Keibun’s model used an elasticity-based approach (as does CTC’s national carbon-tax model), and was used to estimate greenhouse-gas emission reductions for the Oregon study noted above.

The Carbon Washington website has clear and compelling information, arguments and graphics for Measure I-732, including lead organizer Yoram Bauman’s clarion defense of the measure’s provisions to ensure social and economic justice. Yoram’s New Year’s 2016 update was stirring and informative as well. Sign up with Carbon-WA to stay connected and donate.

Carbon tax organizing in Oregon

The Beaver State is the locus of the most detailed examination of a carbon tax for any U.S. state to date.  Oregon’s legislature allocated $200,000 to study the effects of a state-wide carbon tax. The result was Carbon Tax and Shift: How to Make it Work for Oregon’s Economy, by economists at Portland State University’s Northwest Economic Research Center, and released in March 2013. The clearly written and gorgeously designed 36-page report examined a tax based on British Columbia’s carbon tax.

Like BC’s, the carbon tax examined for Oregon would be (largely) revenue-neutral: one scenario applied 70% of the tax revenues to cut corporate taxes, 20% to cut personal income taxes, and 10% to reinvest in industrial energy efficiency programs. The other scenario apportioned 50% of the revenues to cut corporate taxes, 25% to cut personal income taxes, and 25% for industrial and residential energy efficiency and transportation infrastructure.

Oregon carbon tax supporters at “Salmon at the Redd”

Oregon carbon tax supporters at “Salmon at the Redd”

The Oregon tax, starting at $10/ton of CO2 and rising by $10 per year to $60/ton, or roughly twice the level of BC’s tax, would, by 2025, reduce the state’s greenhouse gas emissions by 12-13% below baseline projections and generate over $2 billion a year in revenue, according to the report. The carbon tax outlined in the study became the basis of HB 3252, a bill aimed at establishing a state-wide carbon tax. The grassroots movement to advance the tax was led by Oregon Climate, which spread awareness via canvassing, tabling and lobbying. Oregon Climate also sought to bridge art with climate advocacy, culminating in “Salmon at the Redd,” a community project in which residents created tiles for a mosaic illustrating what they loved about their state.

Unfortunately, the carbon tax campaign was effectively pre-empted by Senate Bill 1547, which in 2016 established a Renewable Portfolio Standard mandating that Oregon utilities ramp up wind and solar facilities to supplement the state’s considerable hydro-electric supplies. Oregon Climate has shifted its focus to a national effort to help other localities advocate for carbon pricing.

Carbon tax organizing in New York

New York should be a strong venue for pursuing a state carbon tax. In October 2012, Superstorm Sandy made a climate-change believer of Gov. Andrew Cuomo. who declared, “[C]limate change is a reality, extreme weather is a reality, it is a reality that we are vulnerable,” after the tidal surge from the storm inundated coastal communities and brought unprecedented devastation to hundreds of miles of shoreline. Moreover, not just coastal residents but upstate citizens politicized by fracking have rallied around the Jacobson-Delucchi “100% Wind, Water and Sunlight” global scenario for NY State, as Jacobson and co-authors propounded in their compelling journal article in Energy Policy.

Two Carbon Tax Center officers — director Charles Komanoff and board chair Alex Matthiessen — outlined the rationale for and distributional impacts of a potential $20/ton (of CO2) NY State carbon tax in a 2013 op-ed for the Huffington Post (cross-posted here). Our draft brief envisions applying the lion’s share of carbon tax revenues to reduce the statewide sales tax rate by a full percentage point — paralleling the sales tax cut in Carbon Washington’s Measure I-732, discussed above. “Leftover” revenues could help fortify the state’s infrastructure to withstand future storms and/or expedite and incentivize homeowners’ and business owners’ installation of photovoltaic electricity generating capacity. Comments on this concise (6-page) draft document are welcome

A NY State carbon tax bill with a more aggressive design was introduced in Sept. 2015 by two Democratic legislators, Assemblyman Kevin Cahill of Dutchess County and Sen. Kevin Parker of Brooklyn. Their bill, A8372 Cahil / S6037 Parker, starts taxing CO2 emissions from coal, oil, natural gas and biofuels at $35 per ton and increases the rate annually by $15/ton, to a ceiling of $185 per ton. The bill proposes returning 60% of revenues to low- and moderate-income households, with the remaining funds used to prepare for climate change, invest in renewable energy, and build transportation infrastructure.

Environmental advocates from around New York State including CTC director Charles Komanoff met at the SUNY New Paltz campus in September, 2015 to discuss climate campaigning and carbon tax organizing. One of the participants, New York League of Conservation Voters Member Andrew Ratzkin, previously outlined the case for a NY State carbon tax in this compelling op-ed in Crain’s New York Business, in July, 2015. In mid-2016 Ratzkin published a lengthy article in the Columbia Journal of Environmental Law, You Say You Want a REV Solution, critiquing the state’s “Reforming the Energy Vision” blueprint as inferior policy to a statewide carbon tax.

Carbon tax organizing in Massachusetts

The bay state’s Global Warming Solution Act of 2008 mandated a 25% reduction of CO2 emissions below 1990 levels by 2020 and an 80% reduction by 2050. Befitting its “promising” status in CTC’s report, Opportunities for Carbon Taxing at the State Level, Massachusetts is a hotbed of advocacy for a statewide comprehensive carbon tax to meet and surpass those targets.

The most politically popular bill appears to be S.1821, An Act combating climate change, sponsored by State Senator Mike Barrett (D-Lexington). Barrett’s nearly identical 2016 bill S.1747 had 47 co-sponsors, and this year he has 64, nearly one-third of the legislature,

The Barrett bill specifies an initial carbon fee of $10/ton of CO2, increasing in $5/ton annual increments to $40/ton, after which the legislature will consider increases or decreases. The bill establishes a fee-and-rebate system, with 100 percent of carbon revenues collected from fossil fuel providers returned pro rata to state residents and to employers based on the number of employees.

S.1821 will direct additional rebates to households in car-dependent areas and to energy-intensive businesses. As with the similar Citizen Climate Lobby fee-and-dividend proposals at the federal level, the rebate system is intended to be income-progressive (with low- and moderate-income households being net beneficiaries while wealthier households would be net payees) while preserving all households’ incentives to reduce fossil fuel use in order to pay less in fees.

Supporters of Barrett’s prior bill, S.1747, cited broad support from businesses including financial services, healthcare, hospitality, food services, transportation, design and technology companies touting its potential to incentivize innovation and preserve competitiveness. At an Oct. 2015 legislative hearing, Business Leaders for Climate Action released an endorsement letter backing the Barrett bill, signed by over one hundred state businesses and business leaders.

Reports by the Massachusetts Department of Energy Resources and Regional Economic Model Inc concluded that S.1747 would slash emissions while boosting employment and overall economic activity.

Mass C-tax emissions projection

Projected Emissions After Imposition of $5/ton Carbon Fee, rising $5/yr to $40 (Prepared for Massachusetts Department of Energy Resources)

On the House side, State Representative Jennifer Benson (D-37th Middlesex) is sponsoring H.1726, “An Act to promote green infrastructure, reduce greenhouse gas emissions, and create jobs.” The Benson bill adheres to the Barrett bill’s carbon-fee-and-rebate model but dedicates 20 percent of revenues to fund green infrastructure directly, such as public transportation, renewable energy, energy efficiency, and protection against the expected impacts of climate change. With 80 percent of revenues applied to rebates rather than 100 percent, the Benson bill would likely have a somewhat less income-progressive outcome than the Barrett bill, though the difference would be attenuated by the green investments.

Two other energy-related bills also include carbon pricing provisions:

  • Senator Marc Pacheco (D-Taunton)’s S.479, An Act relative to 2030 and 2040 emissions benchmarks, would authorize the state to “create, expand, or join market-based compliance mechanisms, including but not limited to greenhouse gas emissions trading and carbon pricing programs,” in order to achieve the greenhouse gas emissions reductions required by the Massachusetts Global Warming Solutions Act.
  • Solomon Goldstein-Rose (3rd Hampshire)’s HD.1948, An Act relative to creating energy jobs, would establish a carbon-fee-and-rebate system similar to those in the Barrett and Benson bills as part of a larger initiative to make Massachusetts “the Silicon Valley of the new energy economy.”

Analysis by the Massachusetts Department of Energy Resources suggests that carbon pricing would deliver the greatest CO2 reductions of any policy while enhancing state and local employment. Advocates are using those findings, along with the potential to cut health care costs through reduced air pollution, to convince Governor Charley Baker to support carbon pricing legislation.

In Jan. 2017, Dave Anderson of the Massachusetts-based Energy & Policy Institute posted a  provocative, well-documented piece, Under Rex Tillerson, ExxonMobil Lobbied Against Carbon Tax Bills. In his article Anderson revealed 2016 lobbying disclosures filed with the Secretary of the Commonwealth of Massachusetts indicating that a lobbyist paid by ExxonMobil opposed the revenue-neutral carbon tax bill S.1747, as well as other climate-related bills.

For more information on carbon pricing in Massachusetts, view this short video on carbon pricing by Business Leaders for Climate Action, or contact info@blcama.org.

Carbon tax organizing in Rhode Island

With its coastline-defined topography, the Ocean State is directly exposed to climate change impacts of rising sea levels, flooding and storms. Rhode Island is also home to U.S. Senator Sheldon Whitehouse, whose 100 weekly “Time to Wake Up” speeches on the Senate floor in 2013-2015 established him as Capitol Hill’s most forceful voice for climate action. The Senator’s American Opportunity Carbon Fee Act of 2014 would establish a national carbon tax.

Detail from REMI study of a Rhode Island carbon tax.

Detail from REMI study of a Rhode Island carbon tax.

With federal carbon pricing blocked by the GOP, a coalition of RI environmental, faith and business groups formed Energize Rhode Island in 2015 to advocate for state carbon pricing legislation. In January 2016 State Rep. Aaron Regunberg (D-Providence) introduced House Bill 7325, along with 40 co-sponsors. H7325 specifies an initial carbon fee of $15/ton of CO2, increasing in $5/ton annual increments. Seventy percent of the revenue would be refunded via per capita and per employee rebates to Rhode Island families and businesses, with 25% invested in renewable energy and efficiency programs.

The Energize Rhode Island Coalition touts a REMI study finding that H7325 will create over a thousand new jobs in the first year alone — a major economic boost for a state whose 2014 population was just 1.055 million — while emission reductions quickly reach double digits. Job growth will continue apace in subsequent years, according to the study, as Rhode Islanders save much of the nearly $4 billion a year they now spend on fossil fuel energy, all of it imported from outside the state.

Carbon tax organizing in Vermont

The conversation among policymakers in Vermont has begun to shift from whether the state should price carbon pollution to how, reports Tom Hughes of VPIRG, in Feb 2016.

The carbon-pricing campaign is led by Energy Independent Vermont, a coalition comprising the state’s top environmental organizations, the renewable-energy leaders who have made Vermont a solar powerhouse, iconic Vermont businesses like Ben & Jerry’s and Seventh Generation, the state’s low-income weatherization agencies, interfaith religious leaders, and academics at U-Vermont’s Gund Center for Ecological Economics. Non-member allies of Energy Independent Vermont include the Vermont Council on Rural Development and a CERES-supported group of industry leaders including Sugarbush Resort, Burton and King Arthur Flour.

The campaign engaged Regional Economic Models, Inc. (REMI) to conduct an analysis of a pollution tax set at $100 per metric ton of CO2, with 90% of revenues recycled as cuts to the state income tax, corporate taxes and a reduction in the sales tax, and the remaining 10% reserved for low-income weatherization and other energy-saving investments. As modeled, the tax would exempt electric generation, since that is already covered with a carbon pricing regime through RGGI, the Regional Greenhouse Gas Initiative. The REMI study concluded that over the first decade this measure would cut carbon emissions from heating and transportation by 31% while generating 2,400 new jobs, raising gross state domestic product by $100 million, and adding more than $150 million a year to real disposable personal income.

Two bills with similar tax rates and revenue treatment were introduced in the Vermont General Assembly in early 2015, according to Hughes. Energy Independent Vermont delivered 25,000 petitions in favor of carbon pricing to Vermont legislators in November 2015, he reports. In January 2016 Gov. Peter Shumlin’s administration called for the state to “investigate and pursue options for market-based greenhouse gas emission policies.” A May 26 piece by Energy Independent Vermont activist Luc Reid in the Williston (VT) Observer, The unsuspected upsides of a carbon pollution tax, did a nice job of laying out the “income progressivity” of EIV’s carbon tax proposal.

The November election win of Republican Lieutenant Governor Phil Scott to the governor’s office will set back efforts to enact a Vermont carbon tax, Seven Days political columnist Terri Hallenbeck reported in early December.

Boulder (Colorado)

2015 Revenue distribution from Boulder’s carbon tax

The municipality implemented the United States’ first tax on carbon emissions from electricity, on April 1, 2007, at a level of approximately $7 per ton of carbon dioxide. According to the City of Boulder, the tax was costing the average household about $1.30 per month, with households that use renewable energy receiving an offsetting discount. The city expected the tax to generate about $1 million annually until its expiration in 2012, with the revenues used to fund Boulder’s climate action plan to further reduce energy use. In June 2009, the City Council voted unanimously to raise the tax level. Although the new rate was not originally specified, the expected increase in revenues, some $810,000 annually,  suggests that the increase is on the order of 80%, or perhaps $5-$6 per ton of CO2 (on top of the original $7/ton). In 2012, residents voted to continue the tax at the 2009 rate for another five years.

Other States?

Please send us (info@carbontax.org) your reports, or even just ideas, on state-level carbon taxes, so we can post them here.

(coming soon: Utah, drawing on this link and that link)

Unicorn or Harbinger? A Republican Carbon Tax Is Readied for Debut.

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“House Republican will introduce $23 climate fee next week.” That’s the headline of an article today in E&E News reporting that Rep. Carlos Curbelo, a two-term Republican representing Florida’s 26th Congressional District, is finalizing a bill that would impose a carbon-emissions fee on most U.S. fossil fuel-burning sectors and also eliminate or at least pause some federal regulations on climate change.

(Update: The Curbelo bill was introduced on July 23 as H.R. 6463, the Market Choice Act.)

E&E calls Curbelo’s pending bill “a rare effort by a Republican to address global temperature increases by reducing greenhouse gases.” That’s an understatement. To the best of our recollection, the bill would be the first carbon tax proposed by a sitting G.O.P. Congressmember or Senator in roughly a decade.

Any needle-moving from the Curbelo carbon tax would be in the political realm, not in direct emission cuts.

Politically, then, the appearance of Curbelo’s bill will be a big deal. In terms of straight-up carbon reductions, however, the bill is underwhelming. Our quick take from inputting the bill’s key elements into CTC’s carbon-tax spreadsheet model is that in 2020, U.S. CO2 emissions would be 22% below 2005 levels. To put that in perspective, actual U.S. emissions a year ago were 14% less than in 2005; thus, the 2020 bump from the Curbelo bill is at most 8 percentage points — less, actually, given the ongoing decarbonization of our electricity sector. (The Congressman’s draft fact sheet for the bill optimistically pegs the 2020 reduction at 24%.)

By 2032, the emissions drop from 2005 would reach 30% (per Curbelo) or 29% (per our modeling). But seeing as nearly half of that decrease was already in place without a carbon tax in 2017 — a year that is closer to the 2005 base year than to 2032 — the Curbelo proposal has to be seen as fairly thin on actual climate deliverables. Which is what one would expect from a carbon price that barely exceeds $20 per ton (the bill’s $23 starting price is per metric ton) and rises by only 2% a year above general inflation, although the bill contains a provision to ratchet up the increase if reductions fall short of specified targets.

Nevertheless, there’s a bigger picture to consider. Just yesterday we put up a post bemoaning the possibility that the anti-carbon-tax Scalise Resolution would pass, as it did in 2016, without a single Republican dissent. Now it looks like Rep. Curbelo is set to dissent in spades by shattering the decade-long G.O.P. prohibition against sponsoring or endorsing — let alone introducing — a carbon-tax bill.

If any D.C. Republican was going to take such a step, it was likely to be Carlos Curbelo. His 26th CD, extending from southwest Miami to the Everglades and covering the Florida peninsula’s entire southern tip, is a climate ground-zero twice over — sea-level rise plus hurricanes — and a classic swing district (it went blue by double-digits in the last two presidential races). A year after taking his seat in January 2015, Curbelo co-founded the bipartisan Climate Solutions Caucus with fellow Floridian Ted Deutch, a Democrat representing the 22nd CD. Whether by conscience or calculation or a combination of the two, Curbelo clearly read the handwriting and elected to break ranks with his party’s denialist orthodoxy.

The Curbelo bill itself is full of political calculation, which isn’t necessarily a bad thing. It would clear the books of the long-standing federal highway excise taxes — 18.4 cents per gallon of gasoline, 24.4 cents for diesel. The carbon tax, with its built-in annual increases, would more than make up the difference, though at the cost of a percentage point or two of economy-wide carbon reductions due to the diluting effect of the swap. The Highway Trust Fund would be a big net winner, receiving 70 percent of the entire revenue take. Whether that’s bad or good depends on whether the increased revenue is allocated to highway expansions or “fix-it-first” infrastructure repairs.

G.O.P. carbon-tax trailblazer Carlos Curbelo. Pic credit: Miami Herald.

The bill stands no chance of passage this year, of course, or in almost any imaginable Republican-controlled Congress. Indeed, under the G.O.P.’s Hastert Rule, Rep. Curbelo would need 117 Republican co-sponsors simply to clear the “majority of the majority” threshold and get the bill to the House floor.

If Rep. Curbelo were a Democrat, we would be measuring his bill against Democratic carbon-tax proposals such as Rep. John Larson’s America Wins Act (HR 4209), whose carbon price starts at $49/ton and which devotes $1 trillion to infrastructure (plus transition assistance for coal country and a relatively small “dividend” for households), and which has a few dozen Democratic co-sponsors. And while the Larson bill’s 2%-plus-inflation price increase trajectory has the same slope as Curbelo’s, it operates on a much higher base and thus packs more punch.

But that comparison runs the risk of missing the point: that a “long national nightmare” of Republican silence and inaction on climate may be starting to end. Whether other G.O.P. lawmakers will stand with Curbelo remains to be seen. He is at least blazing a path, and for that he deserves our thanks.

CTC supporter and volunteer Bob Narus contributed research and ideas to this post.

Carbon, Weed, and the Crisis of American Politics

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America is anti-urban. This is not a feeling or a passing fancy but a fact. While the House adheres to the principle of one person-one vote, more or less, the Senate is a horror show of anti-democracy. Thanks to the principle of equal state representation, it gives the three percent of the population that live in the ten smallest states the same number of senators as the 54 percent that live in the ten largest. The Electoral College triples the clout of Wyoming, Vermont, and other under-populated states in presidential elections while Article V — the constitutional clause that says that two-thirds of each house plus three-fourths of the states must approve any amendment — allows thirteen states representing as little as 4.4 percent of the population to wield an absolute constitutional veto. In case you were wondering, this, in a nutshell, is why an eighteenth-century relic like the Second Amendment will never, ever go away.

But because the least populous states are the least urban for the most part, the result is a profound structural bias in favor of acres over people. And since American politics are also fragmented and de-ideologized, the effect is not only to short-change urban interests but to confuse and obscure them so that Americans no longer recognize what those interests really are.

Here are two examples of how US-style structural anti-urbanism plays out. One involves pot. The other involves carbon.

Although you wouldn’t know it, thanks to a near-century of Washington scare tactics, smokeable marijuana is one of the world’s most benign inebriants. As Lynn Zimmer, a sociologist at Queens College, and John P. Morgan, a professor of pharmacology at the City University of New York, showed twenty years ago in “Marijuana Myths, Marijuana Facts,” large-scale studies of users have “generally supported the idea that marijuana was a relatively safe drug — not totally free from potential harm, but unlikely to create serious harm for most individual users or society.” Contrary to anti-drug alarmists, pot does not harm reproduction or fetal development, it does not damage brain cells, and it does not cause “significant reduction in any pulmonary functions,” most likely because regular users consume at most three to five joints per day versus the ten to forty cigarettes consumed by a typical smoker. Marijuana also does not inexorably lead to an “amotivational syndrome,” which is to say stone-style listlessness, according to Zimmer and Morgan, and it is not a “gateway” to harder drugs either.

So legalization is an attractive alternative for all those seeking to make America a healthier, happier, and — dare we say it? — mellower place. But it is especially attractive from an urban point of view simply because depressed inner cities are where many of the drug war’s social costs are concentrated. Black users are nearly four times as likely to be arrested as whites according to the ACLU, while poor people in general are disproportionately penalized. In New York City’s twenty wealthiest neighborhoods (average family income: $75,000 per year), the arrest rate in 2014 for marijuana possession was just 39 per 100,000; in its twenty poorest (average family income: $34,000), the arrest rate was 498, nearly thirteen times greater.

Thus, support for marijuana legalization should be strongest among minorities and the poor and the politicians they elect. And it would be if America were more democratic. But given its present anti-urban structure — which, by the way, is worsening as the interior continues to lose ground to burgeoning coastal communities — strange anomalies appear.

One is in New Jersey, where Democratic Governor Phil Murphy was elected last fall on a pro-legalization platform. But since Murphy took office in January, replacing the disgraced Chris Christie, marijuana reform has run into a buzz saw of opposition. The resistance comes not only from skittish suburbanites, but, strikingly, from the state legislature’s black caucus. At a recent public hearing in hard-pressed Jersey City, opposition ran so high that a supporter described it as a case of “reefer madness.”

“It will devastate the African-American community,” a Newark religious leader proclaimed. “It will devastate any chance of our children having a future.” Added an ex-Newark public defender named David Evans: “Is legalization going to improve the spiritual health of the people of New Jersey? I don’t think so.”

NJ State Sen. Ronald L. Rice questions legal marijuana’s impact on Newark and other urban communities. AP Photo by Julio Cortez.

But it would improve spiritual health for the simple reason that nothing raises morale more than the knowledge that one will not spend years in prison for the crime of puffing on a harmless weed. Critics do have half a point in the sense that no social policy is cost-free and that inner cities are justified in assuming that they will once again be saddled with a disproportionate burden. As State Senator Ronald Rice, an ex-Marine and ex-Newark police detective who chairs the NJ legislative black caucus, told The New York Times: “[I]t’s being sold on the backs of black folk and brown people. It’s clear there is big, big money pushing special interests to sell this to our communities.”

All too true. But what critics evidently don’t realize — what an inequitable power structure prevents them from realizing — is that, all things considered, inner-city communities will still be better off if non-punitive policies are adopted and the individual is left alone to decide what substances to ingest and what not to. And that’s true even if marijuana reform is revenue-neutral, that is, if it simply legalizes sale and use without dedicating cannabis tax revenues to communities hollowed out by the drug war and mass incarceration. Even a half-good reform is better than nothing.

And now onto the second issue: carbon. The arguments in favor of carbon taxes are every bit as overwhelming as those in favor of marijuana legalization. They discourage carbon-dioxide emissions that are the prime cause of global warming, they encourage a switch from fossil fuels to sustainable energy sources, and, by de-incentivizing driving, they help thin out the chronic traffic congestion that paralyzes the country’s major metropolitan areas.

But what’s often overlooked is the effect not just on traffic or climate, but on America’s much-abused urban centers. To the degree carbon taxing discourages driving, it encourages a shift to mass transit, which, by its very nature, tends to feed into densely-populated cities. Moreover, mass transit doesn’t just funnel people into such nodes — it funnels economic activity and jobs. To the degree that taxing carbon encourages energy to be used more efficiently, it encourages a switch from cars and trucks to biking, walking, and rail, all of which are more compatible with high urban densities. By altering the incentives, taxing carbon emissions applies the brake to powerful centrifugal forces that have spun employment off into ever more distant exurbs, replacing them with centripetal forces returning them to the old urban cores and central business districtss.

Carbon taxes won’t do this all at once, needless to say, but they will at least start the process moving. This is good news for a lot of people, but especially for urban job seekers who can’t afford a car and can’t pursue job opportunities ever farther out in the suburbs because of racial barriers expressly designed to keep them away. Instead of their going to the jobs, the jobs will go to them.

Given all that, one would expect environmental progressives to clamor for ever more carbon taxes — the bigger the better. But anomalies arise yet again. When the state of Washington decided to submit a modest carbon tax to a referendum in 2016, “progressives” led by DC-based Food and Water Watch countered that the tax was regressive, that “people drive because they have to, not because they want to,” and that “[i]ncreasing gasoline prices only means that struggling families will have to cut back on other expenses to fill up their cars at the pump.” Opposition by such “social justice” groups was one reason that the tax, a US first, went down in defeat by a margin of nearly 3 to 2.

From searing words like these (from “Carbon Pricing: A Critical Perspective,” by the Indigenous Environmental Network and the Climate Justice Alliance), one wouldn’t know that carbon taxing can benefit frontline communities disproportionately.

Like critics of marijuana legalization, however, “progressives” had no more than half a point. Boosting gas prices will negatively affect the working poor, which is why any proper carbon tax should include mitigations in the form of reimbursement, which the Washington referendum provided in spades, or promises to invest revenues in job-creating infrastructure projects. But the idea that “people drive because they have to” is nonsense. Driving is not inelastic. As prices rise, motorists cut back on discretionary driving or search for alternate means of going from here to there. The job of progressives is to demand that government provide such means and that it use its economic power to mold development in a way that is more cost-effective for working people, more environmentally benign, and more economically productive. Progressives also need to stop rejecting widespread evidence that “internalizing” climate damage-costs into the prices of coal, oil and gas instills powerful incentives to move off of fossil fuels, even when government investment lags behind.

The present transportation system meanwhile works less well for more and more people. By 2016, the average American was spending a hundred hours more each year in a car than in 1980, the equivalent of two and a half work weeks. Rush-hour speeds are declining according to a study by Texas A&M University, meaning that commuters are spending more time going less far. By 2012, the average car on the road was more than a year older than in 2007 according to the Bureau of Labor Statistics, while the cost of repairs, upkeep, and replacements was up as well. The duration of an average car loan has risen thirteen percent since 2009 while delinquent loans since 2012 have nearly doubled. The typical motorist is stressed sitting in traffic and stressed when struggling each month to pay off his or her loan.

As bad as this is, conditions are even worse for those who can’t afford a car and must therefore spend hours a day traveling by bus to ever more distant work places and then make their way across dangerous highways when they get back home. People like this are stranded in a hostile, highway-bound wilderness, forced to fork over large amounts of cash for a taxi or Uber whenever they want to go to a supermarket, an emergency room, or church.

The system is no less dysfunctional than America’s endless drug wars. Yet an increasingly undemocratic and anti-urban structure not only prevents Americans from acting effectively to fix it, it prevents them from even thinking about how to address a growing list of problems in a constructive way. Politics have broken down, trench warfare has engulfed Capitol Hill, and the showdown between the intelligence community and the White House grows ever more ominous. Is this how the captain of the Titanic felt when he suddenly noticed a mountain of ice looming before him?

Daniel Lazare, author of “The Frozen Republic: How The Constitution Is Paralyzing Democracy” and “America’s Undeclared War: What’s Killing Our Cities and How We Can Stop It,” among other books, is an occasional contributor to the Carbon Tax Center blog.

The Carbon Tax Center Last Year . . . and in 2018

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Everyone’s 2017 was eventful . . . and disruptive . . . and difficult.

From January into April, we, like many of you, marched and protested while trying to see a way forward for carbon taxes under a denialist U.S. regime.

We didn’t write this headline, but we agreed with it. The Left’s opposition to the WA carbon tax was a grievous mistake.

We spoke at gatherings across New York City. We published an article in The Nation magazine decrying left-green dogmatism that doomed the campaign in Washington state to enact the USA’s first carbon tax. We allied ourselves with the Climate Leadership Council’s audacious Republican-branded carbon tax proposal. We published a 120-page guide to state carbon tax prospects compiled by Yoram Bauman, the economist-activist who spearheaded the Washington referendum.

By then we were 100 days into a new administration whose cruelty and heedlessness were sickening. At a climate march in New Jersey, we called the complicit U.S. Republican Party “a racket to restore patriarchy, extractionism and white supremacy.” This truth grew even sharper a month later when Congressional Republicans cheered Trump’s repudiation of the Paris Climate Agreement.

Outputs from CTC’s carbon-tax model: download and use!

We kept working. We retooled CTC’s carbon tax spreadsheet model, incorporating the latest data, snazzing up the user interface and graphics, and for the first time apportioning refinery emissions among their “downstream” sectors — driving, freight and air travel (jet fuel). With this change and the ongoing shrinkage in coal-fired power generation, driving is gaining on electricity for the dubious distinction of most climate-damaging U.S. sector.

Meanwhile, a campaign for congestion pricing in New York City — fees charged to vehicles driven into and within gridlocked city centers — was gathering steam amid meltdowns in the city’s mass transit system, worsening traffic gridlock, and a void of political leadership. When Gotham’s SUV- and helicopter-riding mayor crowned himself leader of state-and-local-government resistance to the White House, we upbraided him on live radio, setting off a media frenzy that continues today.

Our radio call-in touched off a roiling debate about the gap between public postures and personal acts.

But our criticism went beyond tabloid fodder; it pointed to the persistent gap between public postures and personal acts — a breach that carbon taxes could help repair.

Our pivot from national carbon tax campaigning accelerated in August, after Gov. Andrew Cuomo unexpectedly announced his support for congestion pricing. Shortly after, the analytics team advising the governor reached out to me: Would I help them deploy my monster congestion pricing model to score different congestion pricing plans?

Of course I said yes and plunged into massive updating and retooling of the model, which continues as I write this post. Details of the governor’s proposal are expected in a few days and the public debate and legislative donnybrook will almost certainly extend for several months. The fight is important, not just for the sustainability of New York and other global cities, as I argued last week on Streetsblog, but to finally establish in the USA the principle at the heart of carbon taxing: that the most surefire and equitable way to reduce pollution is to make polluters pay for it. [Addendum: The details can be found in my January Streetsblog post, The Fix NYC Congestion Pricing Plan Looks Solid — If Cuomo Aims High, which includes a link to the governor’s panel’s report.]

CTC’s program for 2018

At the national level, the main event by far for carbon taxing this year is to bring an end to Republican climate denialism. This could mean routing the GOP in the midterms, or some other path to repudiating the party’s nearly monolithic rejection of science-based climate policy and its all-out embrace of fossil fuels. It may also require, in the states, dismantling the gerrymandering that, combined with Democrats’ “clustering” in urban precincts, entrenches Republicans’ control of Congress far beyond their share of Americans’ votes.

I’m sorry to say that the notion of a bipartisan federal carbon tax is barely on life-support, as we wrote here last week, decrying the passivity of the Climate Solutions Caucus — the Noah’s Ark-like conclave that we formerly touted as a possible incubator for a revenue-neutral carbon tax. Nevertheless, CTC will continue our technical support and policy advice to members of Citizens Climate Lobby and to the Climate Leadership Council. But we harbor no illusions that current Republican officeholders will provide political leadership or even partnership for meaningful carbon pricing legislation.

Excerpt from “Results” section of our “BTA” spreadsheet model. A key goal for early 2018: A congestion pricing win for NYC that establishes the “polluter pays” principle in the USA.

There’s a corollary: it may be time to rethink revenue-neutral carbon taxes. As much as we love carbon fee-and-dividend, with its powerful logic of linking rising carbon taxes to rising “green checks,” the revulsion against Trump and the G.O.P. could make it harder to sell progressives on programs with a seemingly middle-of-the-road cast. We also can’t dismiss arguments by Frank Ackerman and others that the “fat tail” of climate worst-cases demands national mobilization on a scale that only government action can generate.

Along with political action and some soul-searching, CTC is primed this year to

  • Monitor and parse actual carbon emission reductions in states, sectors and countries with carbon pricing, including the 9 RGGI states;
  • Assess and fact-check claims of economies decarbonizing without carbon pricing;
  • Expand our networking with state and national carbon tax advocates in the U.S. and overseas;
  • Seek common ground on carbon taxing with environmental and climate justice advocates;
  • Explore alliances with progressives working to meld carbon pricing with “mobilization” strategies;
  • Seek out Republicans-conservatives who have genuine interest in non-token carbon taxes;
  • Gain a better understanding of the possibilities and limits in fossil fuel divestment and litigation campaigns;
  • Continue improving and disseminating our carbon tax spreadsheet model;
  • Restock CTC’s Web site;
  • Keep writing op-eds and magazine pieces promoting carbon taxes;
  • Use our blog to post commentary on unfolding political developments, policy proposals and energy trends.

As we head into the new year, we thank you for your past support and your partnership. Contributions to support our work in 2108 (please use this link) will, as always, play a valuable role in keeping CTC edgy, timely and forward-focused.