The ballot proposal in Washington State (Initiative 732) that would establish the first carbon tax in the nation continues to garner attention ahead of the Nov. 8 election, according to the Resources for the Future (RFF) think-tank.
The ballot measure would tax carbon emissions at $25 per metric ton and be phased in over a period of two years. Each year after reaching the $25 level, the tax would increase by 3.5% plus the rate of inflation.
But its prospects remain uncertain, “as the proposal faces opposition from both the right and the left,” RFF said. “Pushback from major carbon emitters in the manufacturing and energy sectors was expected—but contention from environmental groups, who favor investment in alternative initiatives, came as a surprise to many,” RFF said in a Nov. 7 statement.
Regardless of the outcome in Washington State, RFF experts are continuing to explore the potential of a carbon tax policy to achieve emissions reductions that the United States committed to under the 2015 Paris Agreement.
RFF analysts have said that key questions include:
• How will a carbon price affect energy bills?
• What impact will a carbon price have on local job and the overall employment level?
• How much will costs increase for individual companies, given their dependence on energy?
Other key factors include relative simplicity and ease of administration; transparency; and the use of potential revenue to reduce other taxes or achieve social goal, such as deficit reduction or the compensation for vulnerable sectors.
RFF was the first think tank devoted exclusively to natural resource and environmental issues and helped create the field of environmental and natural resource economics, the organization said on its website.