Many liberals have labeled the carbon tax as the “green” policy that does not harm the economy and works to reduce carbon emissions. And, if liberals get their way, Washington State will become the first in the nation to impose a carbon tax.
In other words, our state will become the liberals’ guinea pig.
Of course, liberals in Washington would challenge that characterization. They often point to the “success” of carbon tax schemes implemented in other parts of the world and argue that the same could occur in our state.
Certainly, it’s been argued that the carbon tax — where imposed — has worked. But, is that really true? Or, are there other factors at play?
Supporters of Initiative 732, the so-called “revenue-neutral” carbon tax, claim that British Columbia has proved the success of a carbon tax. B.C.’s GDP increased from $203.9 billion to $219.9 billion since the carbon tax was introduced in 2008 (a 7.87% increase). That, according to the liberals, is proof the carbon tax does not negatively impact the economy and that it’ll work in Washington State too.
That logic is severely flawed, mostly because the carbon tax isn’t really the gift to B.C. that liberals claim.
The carbon tax has not led to success in B.C. when the bigger picture, i.e. the full economic context, is considered.
Compared with B.C., Canada’s GDP increased from $1.6 trillion to $1.8 trillion or by 10.56 per cent during the same time period. The rest of Canada increased just over 10.95 per cent.
Based on the numbers, as a professor at the University of Northern British Columbia points out, British Columbia’s slower economic growth since implementing a carbon tax is weighing down Canada’s growth in GDP.
In 2005, B.C. “represented 12.35 per cent of the Canadian economy.” By 2012, after the carbon tax was implemented in 2008, “that number had dropped to 12.08 per cent.” The decrease may seem small, but it indicates that B.C.’s economy is not growing as fast as the rest of Canada’s economy.
But, it’s not just B.C. that presents an interesting case study for the impacts of a carbon tax.
Australia’s experiment with a carbon tax lasted all of three years. The country implemented a carbon tax scheme in 2011. By 2014, the Australian Parliament repealed the tax.
Australia’s carbon tax proved an absolute failure. In fact, the promise to repeal the much-loathed tax is one of the factors that helped usher in victory for the Conservative Party in 2014.
One cheerleader of Washington State’s I-732 stated that, because the tax is imposed on each ton of CO2-equivalent gases that are emitted, it “would show up at the gas pump and also on electric bills for businesses and homes.” Thus, businesses and people “gradually would shift to cleaner-energy sources that don’t pollute” in order to avoid the tax.
Supporters of Australia’s now-failed carbon tax made similar claims prior to its implementation in 2011. The promise was that, when faced with the costs of the tax, companies would “rush toward renewable sources” rather than continue to rely on coal (which covers 75 percent of Australia’s energy needs).
But, that did not happen. Instead, utilities merely passed their costs to households. Australians saw their energy bills soar by 20 percent in the first year. Worse, industries that face “hyper-competitive environment such as airlines suffered massive losses. (Virgin Australia alone reported about $25 million in losses in just six months.)” And, the carbon tax also “made Australian exports globally uncompetitive, deepening the country’s recession.”
I-732 may argue that their plan is different because, unlike other carbon tax scheme, it is “revenue neutral.” That argument is delegitimized by the simple fact that it is not true. In fact, I-732 is projected to reduce state tax revenues by $915 million over four years. That figure has already grown from an earlier estimate that pegged the four-year budget hit at $675 million.
There is another relevant question supporters of a carbon tax have failed to properly address. Washington State is second lowest in carbon emissions (right behind Vermont) in a national ranking.
So, why should the second lowest carbon emission state act as a guinea pig for an extreme “green” policy? Why should Washington State, already sitting at the number two “green” spot in the nation, jeopardize its economy on an experiment?
Any rational person would say it shouldn’t.