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Economist uses comedy to push for carbon tax

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By Ryan Davis
Herald Columnist
Comedy and economics rarely go together, but Yorum Bauman, “The Stand Up Economist,” uses the art of comedy to promote understanding of complex economic principles.
Yorum earned his doctorate in economics from the University of Washington, and has served as a lecturer there and abroad in China. His book, “A Cartoon Introduction to Economics,” has been translated into 12 languages and his latest is “A Cartoon Introduction to Climate Change.”
As an economist, he believes the best way to address climate change is through the implementation of a carbon tax, offset by reductions in the sale and business and occupation taxes.
I talked with Yorum after his presentation to the 2014 Washington Energy and Construction Best Practices Summit about the proposal being supported by the non-partisan advocacy group Carbon Washington and how it would affect small business.
Question: To start off, tell us why you decided that comedy was the best way to talk about economics?
Answer: It was a bit of serendipity actually. While working towards my PhD. I did a parody of an economics textbook to blow off steam, and that was my start in comedy. Soon after, I did a routine at a science conference, and it took off from there. Believe it or not, economics comedy is surprising lucrative, and I have found a niche in the market. However, on a more serious note, it gives me a way to connect with audiences and publicize the cause for using the carbon tax to address climate change.
Q: Describe the crux of the Carbon Washington Proposal and the carbon tax.
A: Basically, the proposal is to tax fossil fuels burned in the state of Washington, but lower taxes in other areas. Specifically, the proposal would lower the state sales tax by 1 percent, eliminate business and occupation taxes on manufacturing, and offer a variety of other tax credits. The Carbon Washington proposal is modeled after a similar policy model in British Columbia, which has substantially reduced fossil fuel use while being revenue neutral.
Q: Why do you feel this plan makes the most economic sense?
A: The carbon tax is both an efficient and effective way to address climate change. We are taxing the externalities, or costs that affect others that did not choose to take on that cost. It is similar to cigarette taxes, but we are trying to deter the burning of carbon in the state. However, rather than adding to the overall tax burden, the proposal provides an offset in the form of lower taxes in other areas.
Climate policy and regulations from the Environmental Protection Agency or state agencies are coming. The question is whether those regulations will be the most economically efficient in addressing what I believe is the most important issue of the century.
Q: How do you see the Carbon Washington plan affecting small business and aspiring entrepreneurs?
A: I think small businesses will do well under the Carbon Washington proposal. The most obvious benefit is that the small business tax credit would be tripled. Second, the sales tax reduction would go immediately to the bottom line, as businesses in Washington state pay more than 30 percent of the sales taxes. With the exception of companies that produce fossil fuels, the administration of this tax is minimal. There are no forms to complete or accountants to pay, the price of the carbon is baked into the price of goods.
It important to note that we are only taxing carbon burned in the state of Washington and the electricity imported into the state. We are not going to tax the carbon footprint of your smartphone. The proposal takes into account that energy-intensive enterprises like manufacturing will need additional tax offsets, thus the manufacturing business and occupation tax would be dropped to zero for that sector.
Q: If you were starting a business today, how would you account for the risks of climate change?
A: Climate change is long-term issue, not an overnight change. The most important issue for businesses is thinking about how they can reduce their carbon costs, because environmental regulations are coming that will cause businesses of all sizes to incur higher operating costs. If you have vehicles think about higher gasoline prices, or higher cost to operate your buildings.
Story tags » Small business



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