Tax carbon, then give the money back

The recent ground swell of climate and clean energy solutions in state and local news is remarkable. We’ve always needed more climate and emissions solutions. Now we have new Republican-proffered solutions in addition to longer-standing ones. We can harness multiple approaches, but one — pricing carbon without additional tax burden — needs to emerge as a front-runner.

Until recently, our efforts were centered on emissions problems from burning and transporting fossil fuel. Now, proposals for addressing the problems are coming in. Some may grab the attention of U.S. Rep. Rick Larsen, D-Wash., given his focus on national security and transportation.

We need to be clear about which emissions problem we’re targeting. We are challenged to: reduce the emissions content of transportation fuels; create clean, safe, local jobs; preserve our regional low-cost electric power legacy; safely transport coal and petroleum in rail cars; and reduce our consumption of dirty fossil fuels in vehicles and stationary plants.

Proposed solutions include: improve how cleanly a fuel must burn by 10 percent, tax dirty transportation fuels at the point of sale; retaining or modifying our existing utility power plant renewable energy portfolio standards; enact a state tax on carbon to generate additional government revenue; and enact a state carbon tax that is not meant to create additional government revenue and spending.

In addition, Gov. Inslee’s favored solution is to create a new market specifically for carbon pollution. Set limits in the market for how much carbon an entity can emit. Beyond the set emission limit, the fossil fuel-burning entity must purchase credits for excess pollution. This is along the lines of California’s “cap and trade” scheme.

The work of sorting out the climate and emissions objectives and solutions has grown.

I think it is important to understand the idea of collecting revenue, and promptly giving it back. The idea is to have accurate price signals in the marketplace — not added revenue. We need price signals that mirror the true cost of burning fossil fuel. Republicans see some logic in this; they want to let markets — not government — do the work. Republicans favor avoiding additional tax burden. Using accurate price signals, fossil fuel consumption would slow, while boosting clean energy technology and markets.

First collect the carbon tax revenue, and then … um, give it all back? Yes — this is exactly what is proposed in a “revenue-neutral carbon tax.” It’s what British Columbia has been doing for several years when it uses carbon tax revenue to offset existing taxes.

An alternate revenue-neutral tax proposal, by the nationally focused Citizens Climate Lobby, is to collect a gradually increasing carbon tax or fee, and return all revenue to households annually.

On the state level, our Carbon Washington group will file a ballot measure in March for a revenue-neutral carbon tax that reduces the state sales tax by a full point.

A revenue-neutral tax or fee option is our best shot at garnering bipartisan support to slow emissions problems and reduce fossil fuel dependency.

Republicans and Democrats in our state are proposing climate and emissions solutions. More solutions are coming. Let’s evaluate cost benefit of solutions. But, let’s be mindful of what we can actually agree upon. We have solutions to implement.

Lee James of Coupeville represents the area chapter of the Citizens Climate Lobby.

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