I-1631 invests in what matters

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I-1631 invests in what matters

Clean air, thriving communities, and good jobs far outweigh pollution fee’s costs

By - October 5, 2018

As we’ve previously written, Initiative 1631 would inject hundreds of millions of dollars per year directly into communities in Washington by imposing a carbon pollution fee on businesses that emit large amounts of carbon dioxide or sell carbon-laden fuels. Revenues from the fee would help our state transition to a dynamic, low-carbon economy with cleaner air and water. And a substantial portion of the new revenue would be rightly invested directly into communities that have been most harmed by decades of air pollution.

Yet to persuade voters to reject this commonsense initiative on the November ballot, opponents (mostly massive, multinational oil companies) frequently reference an unrealistically high estimate  of the pollution fee’s average cost to households. While the measure would appropriately increase the costs of carbon-intensive fuels, the actual average impact on households is up to $100 per year lower than opponents are claiming.

In reality, I-1631 would raise high-carbon fuel and energy costs by an average of $13 per month per Washington household in 2020. That’s a small price to pay for cleaner air, healthier communities, and more efficient energy and transportation infrastructure – all of which would create new good-paying jobs in the clean energy, or “green jobs” sector. This estimate is derived from the same model used by the state Office of Financial Management to estimate the amount of revenue that would be generated each year under I-1631.¹

It’s also important to note that carbon pollution fee costs would vary significantly across households. People with SUVs; long, single-driver commutes; and large, poorly insulated homes would likely pay more than $13 dollars per month. People with more efficient cars, shorter commutes (or who carpool, bike, or use public transportation), and well-insulated homes would pay less.

Further, the measure would devote significant resources ($144 million in the 2021-22 budget cycle alone) to reduce energy costs for low-income households. These resources would be used to assist Washingtonians with low incomes with weatherizing their homes, purchasing energy efficient appliances and vehicles, and installing solar panels. It would also provide them with cash rebates to offset additional higher costs.  All these actions would reduce carbon pollution, stimulate local economies, and generate good-paying jobs in the clean energy sector.

The bottom line is that the benefits of I-1631 – cleaner air, improved public health, clean energy and transportation infrastructure investments in communities, and new good-paying green jobs, just to name a few – far outweigh its costs. That’s why the Budget & Policy Center enthusiastically joins Tribal Nations, businesses, climate scientists, public health experts, and many organizations representing communities of color to endorse I-1631. It is an equitable and inclusive way to build a cleaner and more prosperous future for all Washingtonians, especially those who have been denied their just share of the state’s growing prosperity.

Voters shouldn’t let the overly broad and unrealistically high cost estimate circulated by large oil companies and climate-science deniers dissuade them from approving I-1631 on the November ballot.

1.) Carbon pollution fee revenues were obtained from Carbon Tax Assessment Model (CTAM) that is maintained by the Washington State Energy Office. Per I-1631, the fee was assumed to take effect in calendar year 2020; the rate was set at $15.00 per ton; jet fuel, marine fuel, transition coal, and emissions from Colstrip 1&2 were exempted. Under these assumptions the model determined $858 million in carbon pollution fee revenues would be generated in 2020. $472 million of that amount would be paid by individuals; $387 million would be paid by businesses. The number of households in Washington state in 2020 was estimated to be 2,969,980. This was obtained by growing the 2017 estimate (2,840,377) from the U.S. Census Bureau’s American Community Survey by 1.5 percent per year, which is the average annual rate of growth from 2012 to 2017, through 2020. Dividing the amount of carbon pollution fee’s estimated to be paid by individuals ($472,000,000) in 2020 by the estimated number of households in Washington state for that year (2,969,980) yields an average household cost of $159 in 2020.

About Andy Nicholas, Senior Fellow

Andy specializes in state budget and tax policy. Since joining the Budget & Policy Center in 2009, he has served on a Legislative Task Force on Tax Preference Reform and has conducted numerous analyses of Washington state’s tax code.

Read more about Andy