March 23, 2018

The Intercept: Climate change policy is proving difficult to enact even in liberal states with Democratic control

By Kate Aronoff for the Intercept.

DEMOCRATS IN WASHINGTON state this winter exploded onto the political scene. In November, an unabashed progressive, Manka Dhingra, won a special election that flipped control of the state Senate and unified control of government, uncorking pent-up legislation that had long been gathering energy.

This year alone, the state legislature has already:

  • Passed automatic and same-day voting registration
  • Implemented protections for transgender students in public schools
  • Banned gay conversion therapy
  • Beefed up the state’s campaign finance rules

In January, Gov. Jay Inslee announced he had hired staff to oversee agency enforcement of an executive order he signed last year, affirming the state’s commitment to provide services to Washingtonians regardless of immigration or legal status, and that it “will not use agency resources to assist with creation of a registry based on religion or apprehension of persons for civil immigration infractions.”

All this progressive energy seemed to bode well for a top priority issue for Inslee and the voters who put Democrats into power: combating climate change.

And so the party pushed hard on a historic climate policy that would be the country’s first statewide carbon tax, intended to both curb greenhouse gas emissions and raise revenue for critical state programs.

If passed, it would help make good on hundreds of U.S. governors’, mayors’, university presidents’ and businesses leaders’ pledges when President Donald Trump pulled out of the Paris Agreement: to meet that document’s ambitious goals for reducing toxic greenhouse gas emissions at the state, local, and corporate level, whether the White House was with them or not.

But just ahead of a major vote in the state legislature, the bill was pulled in the Senate. Inslee and state Sen. Reuven Carlyle — the bill’s sponsor — claimed that they were “one or two” votes short of the 25 needed to sail their measures through to the House (though without a floor vote, it’s impossible to know).

It was the second time in as many years a carbon tax had failed to pass muster in the Evergreen State. In 2016, a ballot initiative known as I-732 — another carbon tax — lost by nearly 20 points in November 2016, as climate activists themselves rallied against it. Days after the Washington vote last week, a similar policy to Carlyle’s measure faltered in Oregon.

Why do climate policies keep losing in some of the country’s most progressive legislatures?

States like Washington offer a preview for what climate politics might look like after Trump is out of office. According to the Yale Program on Climate Change Communication, residents there discuss climate change more than in almost any other state in the union and overwhelmingly support regulating carbon dioxide as a pollutant. There’s political space to parse out what kind of policy should be enacted to deal with climate change rather than whether such policies are worth discussing in the first place. As the climate debates in some blue states are also helping show, policy conversations tend to become much harder once there are actual policies on the table. That’s especially true when it comes to climate change, a policy field lacking in both living examples to draw from and intellectual infrastructure.

Washington’s carbon tax proposal was pushed for heavily by Inslee, a liberal Democrat rumored to be eyeing a 2020 run. Along with California Gov. Jerry Brown, he’s been among the most vocal proponents of the idea that the federal government isn’t needed to meet the U.S. commitment to the Paris Agreement, which aims to keep temperatures from rising more than 2 degrees Celsius. Speaking for the 14-state U.S. Climate Alliance of which Washington is a part, Inslee said, “There’s nothing Donald Trump can do in our states to stop us from advancing our policies.” State legislators proved another matter.

Senate Bill 6203 would have set an initial price on carbon at $12 per metric ton, gradually rising over time until eventually maxing out at $30. Because carbon pricing is treated as a “pass-through” tax — in which prices on companies trickle downstream to consumers — Republicans and Democrats both chafed at the potential gas price hike the bill could eventually trigger. On the upside, the measure would have allocated revenue toward popular, climate-focused services and projects — clean energy investments, for instance — that have been difficult to fund given the idiosyncrasies of Washington’s tax code. The state has no income tax, but does provide generous breaks come tax season for big Washington-based corporations like Amazon and Boeing.

“Taxes in general are hard, and certainly in Washington State they’re hard,” Rep. Pramila Jayapal, D-Wash., told me. She was a state senator during the campaign for I-732, which she opposed, alongside the state’s environmental justice and progressive groups. “When I was in the legislature we did pass a pretty significant gas tax increase. But other than that it’s been a hard state to pass tax reform of any kind.”

Not all carbon taxes are created equal, and much of the debate about them orbits around how to use the funds they generate. SB 6203, for instance, was crafted with a keen eye toward the state’s budget shortfalls. As Danny Cullenward explains, there are essentially three models for allocating revenue from carbon taxes: those intended make up for existing funding gaps for essential programs with a focus on climate change; the “revenue-neutral” variant proposed by conservative economists, like I-732, which distributes money out to state residents (usually via the tax code), rather than adding to state coffers; and a version intended to invest heavily in climate-friendly and even redistributive projects, like clean energy and a just transition for workers in carbon-intensive sectors–along the lines of SB 6203. An energy economist and lawyer, Cullenward was appointed by state Sen. Kevin de León last year to help oversee the implementation of California’s newly revamped cap-and-trade program.

forthcoming ballot initiative from the Alliance for Jobs and Clean Energy — a coalition of labor, racial justice, and green groups that fought I-732 back in 2016 — will fall in that third camp, levying a slightly higher “fee” on polluters, $15 per metric ton, and emphasizing investments in low-income communities, wildlife protection, and renewable energy. (Whereas a tax can be fed into the state’s general revenue, revenue from a fee must be directed toward addressing some related issue. That is, any funds raised by the Alliance’s measure could only be used for climate- and environment-related projects, not schools or highways.)

“I really do feel like the other two were not designed to win,” Jayapal, told me, referring to I-732 and SB 6203. She’s more hopeful about prospects for the Alliance’s proposal, based both on its content and how it will ultimately be decided. “It is our history in the state to not be able to pass things in the legislature and then be able to pass them on the ballot,” Jayapal said. Early on in her time in Olympia, she introduced a measure for a $12 an hour minimum wage to the state legislature. The measure failed, despite her having told her colleagues a measure brought through a ballot initiative would likely set the rate even higher. “Nobody would believe me and so ultimately we took it to the ballot, and it was $13.50.”

Aiko Schaefer is hoping something similar happens come November. A 20-year veteran of Washington state advocacy efforts, Schaefer is the director of Front and Centered, an environmental justice organization that works with the communities of color around Washington being worst-hit by fossil fuel extraction and pollution, as well as — increasingly — climate change itself. Front and Centered is a member organization of the Alliance for Jobs and Clean Energy and has been deeply involved in the process which created the new ballot initiative. “People of color care deeply about climate change, but had never really been asked to engage in the issue up until this point in Washington state,” she says when asked about how Front and Centered came together in 2014. “Our reliance on fossil fuels has created a mess,” Schaefer told me, “and that mess is in communities of color and low-income communities. Wealthy people are not going to live next to oil refineries and factories spewing pollution.”

Asked why carbon taxes keep failing in Washington, she notes that — in addition to the enormous opposition from the fossil fuel industry — advocates for policies like cap-and-trade and carbon taxes tend to overemphasize the how policies function, rather than the types of change they could bring about. “Often climate policies are talked about more in terms of their mechanics rather than what they accomplish. The Affordable Care Act is funded through a tax on the wealthy. But when the ACA was proposed, it was posed as a way to make sure people have access to affordable health care — not to tax the wealthy,” Schaefer says. She added that while the Alliance has been enthusiastic about Inslee’s leadership on climate issues and worked with him on various proposals, the group didn’t take a unified position on SB 6203 as they were busy compiling their ballot initiative.

“Our opponents in the oil industry always say that a carbon tax is going to cost you more money,” she says, “When you talk about a carbon tax, you’re in the box of talking about money. But the truth of the matter is that we are already paying for the pollution that they’re creating — for flooding, for forest fires, to clean up pollution. We are already paying for carbon pollution, and every day they are not.”

The Alliance initiative’s fee would allocate revenue toward “clean air, clean energy, clean water, healthy forests, and healthy communities” and supporting workers as they transition out of jobs in carbon-intensive industries. Both public and private entities will be able to apply to use funds raised by the tax toward projects that meet certain criteria as outlined in the initiative, with priority given to projects benefiting low-income communities and communities of color.

Front and Centered and the rest of the Alliance are hopeful that the years of statewide coalition-building work and collaboration that went into their initiative will bear fruit when it comes to a vote in November. While the I-732 push included a massive door-to-door turnout effort, the group behind it, Carbon Washington, largely went it alone in both the creation of their policy and the campaign to pass it. That measure was largely conceived of by conservative economist Yoram Bauman, who was more interested in winning over Republicans and industry than Washington’s progressive community, building generous corporate tax breaks into his proposal to ensure it wouldn’t bolster state coffers. His bargain didn’t pay off, and the volunteer effort was outmatched by opposition from both the left and the right, where it provoked resistance from both the state’s GOP and powerful industry interests. “732 for us is we felt that we felt we were squandering an opportunity to leverage those dollars toward the solutions that it will take to move away from fossil fuels,” Schaefer says of her group’s opposition to the measure. Having rallied 170-plus labor, faith, green, and business groups around the Alliance’s push, Schaefer is optimistic that their more grassroots mobilization can outgun industry and right-wing opposition.

Still, there are conflicting theories of what the winning coalition for carbon pricing should look like. Asked why she thinks SB 6203 failed, Kristin Eberhard of the Sightline Institute, a Seattle-based think tank focused on environmental issues, noted the relatively fresh mint on the Washington legislature’s Democratic majority. She also attributed its loss largely to a lack of buy-in from the state’s corporate community. By contrast, she says, California — which renewed its cap-and-trade program last year — “was able to build a strong business alliance in support of climate action. It’s really critical to have support come not just the usual suspects of green groups.” Fledgling, parallel business community efforts in Washington, she argues, “haven’t built up the necessary political muscle yet.”

Viewed in a certain light, carbon price proposals seem almost doomed to fail given the range of competing interests they should theoretically satisfy: left-leaning groups who want protections against the regressive effects of the tax and investment in the working-class communities and communities of color that stand to be first and worst-hit by climate change; state legislators who want to open up new revenue streams to programs sorely in need of them; businesses interests — particularly from carbon-intensive sectors — that want any move toward a low-carbon future to happen as gradually as possible, if at all. It should also, of course, bring down emissions.

Can the many supposed masters of climate policy can be served at once?

Industry interests hope that question is resolved in their favor. While fossil fuel corporations are still pouring plenty of resources into funding disinformation campaigns about global warming, they’re also starting to try their hand at writing climate policy — not simply stopping it.

As I reported on last year for In These Times, the Western States Petroleum Association — the region’s oil and gas lobby that opposed both carbon tax measures in Washington — played a heavy hand in drafting the cap-and-trade extension bill passed in California last year, including its sizable loopholes for some of the state’s big polluters. (Investor-owned utilities poured nearly $4.7 million into Brown’s 2010 election campaign, and fossil fuel industry interests donated $4.4 million to the state’s Democratic Party between 2011 and 2014.)

Multinational oil companies are actively pushing for a price on carbon, and six of them wrote a letter in advance of the Paris climate talks in 2015 requesting world governments enact a “clear, stable, long-term, ambitious policy frameworks. We believe that a price on carbon should be a key element of these frameworks.” When he was still CEO of ExxonMobil, recently ousted Secretary of State Rex Tillerson even suggested such a policy and advocated for “returning the tax revenue back to consumers through reduction in other taxes — payroll taxes or a simple dividend.” Shell has written that “the “transition to low-carbon solutions is best underpinned by meaningful government-led carbon ‘pricing’ mechanisms.” The list goes on.

Some carbon tax advocates see the industry’s affinity for market-based climate policies as cause for hope. The Climate Leadership Council — founded to support a “Conservative Case for Climate Leadership”, drafted by a who’s who of Reagan and Bush-era economic advisers — counts BP, ExxonMobil, Shell, and BP among its corporate founding members. As the CLC founder and plan co-author Ted Halstead stated in a recent TED Talk, “I am convinced that the road to climate progress in the United States runs through the Republican Party and the business community.” As it is in his plan, a carbon tax in the conservative, revenue-neutral mold is seen as a means of reducing both corporate and income taxes and laying the groundwork for a “significant regulatory rollback” on carbon-intensive firms.

In an open letter to WSPA, Bauman phrased the business case for a revenue-neutral carbon tax more clearly: “[T]here’s a serious risk [climate] policies will fundamentally change your business. Fortunately, there’s an easy way out for you: Support smart climate policies, oppose dumb ones.”

The problem is that an “easy way out” for oil companies can’t coincide with one for the planet. Even conservative pathways to capping rising temperatures at 2 degrees Celsius suggest industrialized nations should start reigning in carbon emissions by 10 percent each year before zeroing them out entirely by mid-century; even that scenario assumes we’ll be able to deploy so-called negative emissions technology at a global scale, despite the fact that those technologies remain untested at scale. Without negative emissions, the deadline for decarbonization comes much sooner: 2026 — eight years from now.

The scale of change required to cap temperature rise at 2 degrees is so drastic that scientists are now openly questioning whether it’s even possible. According to an analysis from Oil Change International, even burning through existing fossil fuel reserves — those housed in actively operating mining and drilling operations — would take us well above 2 degrees of warming. If burned, existing oil and gas reserves alone would see us overshoot 1.5 degrees. According to a new study in Nature from researchers at Duke University, the difference between capping emissions at 1.5 degrees and 2 degrees could mean as many as 150 million lives, echoing a longstanding slogan from climate-vulnerable Global South nations at international climate negotiations: “1.5 to survive.” The implication here is clear: Meeting the targets set out by the Paris Agreement means that there can be no new fossil fuel development, which also means a dramatic build-out of zero-carbon fuel sources.

Meanwhile, at the behest of the same oil and gas companies pushing for a carbon tax at the global level, the Trump administration is moving to open America’s public lands and coastlines both to new drilling, all the while proliferating fossil fuel development abroad to open up new markets for U.S.-based fossil fuel companies in the name of “American Energy Dominance.”

Especially after the Paris Agreement, major carbon-intensive firms — global companies, by and large — see the writing on the wall: Climate policy is coming, and they can either be at the table or be on it. They’re also seeing a path toward having it both ways — aggressively pushing for fossil fuel development while backing a slate of climate policies that, while they look good in the short term, could prove largely symbolic. On the global stage especially, and increasingly at the national level, the companies most responsible for driving climate change are positioning themselves as authorities on how to end it. At least for now, their weapons of choice are market-based climate policies.

“Companies want to get in and set the price for carbon so that it’s not prohibitive to their profits,” says Jesse Bragg of Corporate Accountability, a group that has closely tracked the business community’s involvement in climate policymaking at the international level. “Politicians, universities, and major NGOs are all preaching the same sermon on markets. They’re all saying that this is the solution to climate change. Even some of the best elected officials on climate issues support carbon markets and support the industry being at the table during the policymaking process,” he says. A carbon-pricing proposal from Sens. Brian Schatz, D-Hawaii, and Sheldon Whitehouse, D-R.I., for instance — both known as climate champions — mirrors the CLC proposal, although includes investment in clean energy and no corporate tax cuts.

“The track record we’ve observed is these policies’ utter failure to cut emissions,” Bragg says. “The carbon-trading schemes are just that: schemes, to maintain the status quo. They’re schemes to allow the fossil fuel industry and utilities to continue business as usual, but appear to be part of some effort to solve the crisis.” Given the number of factors that contribute to rising CO2 levels — economic contractions, other regulations — analyzing exactly what impact existing market-based policies have had on emissions is notoriously difficult. The closest parallel to the Alliance’s policy, for instance, is a carbon price implemented around a decade ago in British Columbia. While emissions dropped after its 2008 passage, there’s reason to believe that had less to do with the tax than with the onset of the recession, which triggered a dramatic emissions reduction in economies around the world, including Canada’s.

That’s not to say there aren’t carbon-pricing measures that could lay the groundwork for a more holistic transition off of fossil fuels, in tandem with more stringent regulation. New York Renews — a broad-based East Coast coalition of labor, green, and community groups, along the lines of the Alliance — is pushing a similarly minded policy in the legislature there, which would use a polluter fee to funnel an estimated $7 billion toward job creation, infrastructure development, targeted investment in low-income communities and communities of color, and more. While Schaefer sees the Alliance’s measure as an “important step forward,” she doesn’t believe their initiative is a silver bullet. “This initiative is not a panacea to addressing pollution, shifting to clean energy alternatives or protecting our natural resources and communities from climate change. For us, we believe that it’s going to take a variety of approaches for us to get there,” she told me, including aggressive action at the federal level.

That could be a long way off. Republican attacks on everything from health care to the tax code have essentially shut down whatever already limited space there was for a national debate about climate policy. The fact that the GOP controls every branch of government forecloses on the possibility of climate legislation in the short-term, and energies among progressives in Congress have understandably been focused elsewhere. Proposals like Sen. Jeff Merkley’s, D-Ore., “100 by ’50 Act” have tried to keep the climate conversation alive with calls to transition entirely to renewable energy by 2050, yet haven’t managed to capture much public attention in a news cycle defined by the rolling series of calamities emerging from Trump’s White House.

“At this moment,” Jayapal told me when asked about the future of climate policy at the federal level, “it feels like we need to have a vision that we all hold, so we can continue to try and unify ourselves. We need to put forward that proposition agenda of not just opposition, but proposition.” She and other progressive legislators and grassroots advocates spent last weekend in Baltimore working to arrive at exactly that, during the Congressional Progressive Caucus’s strategy summit. Yet unlike on issues like health care, Republican attacks — in this case on the environment — haven’t led to grassroots-lead rallying cries around more ambitious climate policy proposals à la Medicare for All.

That’s partially because there is no easy parallel. Giving everyone health care is a fairly straightforward way to solve the coverage and affordability crisis in the American health care system. The climate crisis is more unwieldy and far less discussed among the progressive think tanks, nonprofits, and movements that help funnel ideas up to progressive lawmakers. While carbon taxes are sometimes posed as such, there’s no one-size-fits all plan for decarbonization. Curbing climate change will require a dizzying number of expensive, transformational changes to the global economy and America’s own, from electrifying vast swathes of the country’s grid to research and development into low-carbon technology to a rapid scale-down of the fossil fuel industry. And while states are often seen as a kind of laboratory for testing out policies that might work at the national level, the federal government isn’t under the same kinds of budgetary pressure as states, which are far more dependent on their tax base for funding essential services and can’t deficit spend in the same way.

What’s more, the kind of regulatory authority and administrative capacity states enjoy is somewhat limited, and far greater in some places (California, for instance) than others. In such a context, carbon taxes and cap-and-trade are two implements in a relatively limited toolbox for state-level action. On the national stage — where the Environmental Protection Agency is required to regulate carbon dioxide, and budgets aren’t strictly depended on tax revenue — the range of potential policies is much wider, even if the politics look more bleak.

With a party of outright climate deniers controlling every branch of the federal government, simply making the moral point that climate change poses a danger to human life — and that there are very specific industries causing it — has been a worthy cause in itself. The fossil fuel industry, meanwhile, is already engaging in a more sophisticated climate conversation and intervening to shape policy responses to it from states on up through the United Nations. With the possibility of Democrats retaking Congress this November and time running out to roll back emissions, the question is whether progressives are prepared to do the same.

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