2018-09-13

Back to the morality wars

Yes, Climate Action Is a Moral Issue is an impassioned screed (The fossil fuel companies lining up to oppose I-1631 represent a cabal of economic power that stands in the way of our collective progress. They aren't neutral actors. They are narcissistic [errm, are you sure you meant that? - Ed.], amoral entities actively harming all of our futures... forces of profound greed, evil and violence to people and the environment) by that nice Sarah Myhre (a national thought leader). The context is proposition 1631 in Washington which, funnily enough, came up recently. Read the text here. Or, maybe don't. Because (did you guess. Go on, you did, didn't you?) there is far far too much text to read.

SM is obviously responding to my famous argument that global warming is best treated as an economic, not moral, problem. I won't repeat here what I said there. Instead, I'll look a bit at 1631, and the opposition to it.

Note that SM does show some uneasiness about the content of the proposition: Washington State voters might reasonably debate the structure of I-1631. Is it the best possible piece of legislation? Does it work as well as or better than other regulatory devices? She concedes that Those questions deserve attention and debate. Before, predictably enough, deciding to totally ignore those questions in favour of more interesting topics: The more important, more interesting, more effective place to focus our moral attention is on where the support or opposition for such legislation is coming from.

1631


To start with trivia, bits of the text appear to have been written by children. So we have: Beginning January 1, 2020, the pollution fee on large emitters is equal to fifteen dollars per metric ton of carbon content. Beginning January 1, 2021, the pollution fee on large emitters increases by two dollars per metric ton of carbon content each January 1st. That bit is fine, except you might want to take into account inflation. So they try to do that: The annual increase shall adjust for inflation each year. But this doesn't make any sense. The annual increase cannot both be $2, and adjust for inflation. It's like they've let their wishful thinking spill out onto the page.

Some parts of the text are clearly fairy stories: The people find and determine that the pollution fee imposed in this chapter is not a tax in light of the purposes, benefits, and use of the fee. WTF? It's a tax. Of course it's a tax. Calling it a fee doesn't make it not-a-tax. Using it to buy unicorns doesn't make it not-a-tax.

The fee is on Fossil fuels sold or used within this state. But there's a problem: if company A sells the fuel to company B, who sells it to C, who burns it, who pays? You can't charge them all, and the text recognises this: The fee must be levied only once on a particular unit of fossil fuels. But as far as I can see the text makes no attempt to say which of A, B or C gets to pay. Are they, perhaps, intended to sort it out amicably amongst themselves?

But the most important problem is the sheer length of the text. The reason the text is long is because they've gone into great detail to say how the proceeds of the fee-aka-tax are to be spent. I think that's a mistake. The least you can do with legislation of this kind is to make it short, and that can only be done by not pre-writing a vast slew of buy-offs into your text.

Of course, "you can't win" with stuff like this. Make it a plain tax, with proceeds into the general revenue perhaps reducing some other tax in compensation, and you make people like me happy. But you make sad all the people who wanted their pet interests bought off. Make it a vast dog's breakfast of special interests and those special interests will be happy, but I won't. Or, if you're the no-to-1631 campaign, you get to say that it is Filled With Unfair Exemptions That Make No Sense.

The opposition


Although the No campaign tries its best to persuade us that the proposition is so riddled with holes that "honest law-abiding nice middle class folk like you and me" will end up paying all the bills, it is rather striking that No seems to be funded almost entirely by fossil fuel companies. And the idea that these altruistic companies have the best interests of ordinary folk at heart is not really credible. Note that Public Enemy #1 Exxon doesn't seem to be there. Indeed the Top Villain is Phillips 66, who I've never heard of before. They appear to be more of a refining company than a production one; ditto #2, Andeavor. #3 is BP, though.

Why exactly are the FF companies opposed? Well, it's a carbon tax, which they've got rather used to opposing. It is, as I noted above, riddled with special-interest-buy-offs which can be considered objectionable to Tea Party types and me, but FF companies in particular wouldn't be expected to care most about that. Perhaps they get to spearhead it because it clearly relates to FFs.

6 comments:

Anonymous said...

The WA state previous effort, prop. 732, failed by an 18-point margin. It gained little Republican voter support, even though it was bipartisan, and lost a lot of Democrats, including the WA state Democratic party. That ultimately doomed it. A problem is that it was not scored as revenue neutral, giving away more in tax cuts than it raised, which lead to various pro-education groups coming out against it. It may have been patterned like BC's tax but that was passed in Canada during less hyper-partisan times.

https://ballotpedia.org/Washington_Carbon_Emission_Tax_and_Sales_Tax_Reduction,_Initiative_732_(2016)

It was certainly closer to a carbon fee and dividend structure, where poor households come out ahead by cutting regressive taxes. This should really be a steady point of emphasis by those who prefer such an approach. Emphasize the benefit. As for "tax" vs "fee", there's value in not calling it a tax. Best guess is "tax" is far more scary sounding in the States than in UK. It's why opposition to the ACA was giddy when the Supreme Court ruled the individual mandate penalty a "tax" rather than the "penalty" as used in Romney's MA plan, even though nothing changed. The big/bad mandate tax is gone now although the rest of the law is mostly intact. One could easily call fee and dividend a "residential tax cut and carbon fee" plan. Charging polluters and giving revenues to the people is about as populist as it gets but that message is watered down. Cap and trade is a somewhat easier sell when nothing resembling a tax is involved in the language. See AB32 and effort to overturn it , Prop. 23, which failed badly in 2010 when the state was still reeling from a recession. The scare tactics that it would hobble an economic recovery didn't work. The law is still well-supported, the state much less carbon intensive and doing well economically.

It is interesting that 1631 is generating far more fossil fuel opposition and that the vast majority of opposition money is from that industry. Why did they not oppose 732 so much? It even had a somewhat higher carbon price. Might speculate that with Democratic party opposition and big enviros on the sideline, they weren't worried about it passing, so invested little. Problem for them now is Democrats seem to be mostly unifying around it and WA is a blue state. While the carbon price side might be weaker, the revenue side is potentially much stronger, as much of it is directed towards clean energy initiatives, threatening the fossil fuel industry more than a carbon price alone. This could mean accelerating transition to electrification of transportation through rebates, subsidies, infrastructure. Not good for oil. Cutting sales taxes doesn't do that. Supporters of a carbon tax would do well not to be too stubborn about revenue uses. Putting a price on carbon is a good thing. The revenue choices have tradeoffs. Look at the whole package.

No idea if it will pass. Polls show general support for a tax where money is used either as flat rebate or clean energy and WA is bluer than the nation. Getting the ruling party on board is a big step but the opposition dollars are much larger this time around and it may come down to messaging.

https://phys.org/news/2014-07-carbon-tax-revenue-fuels-renewable.html

Prop. 1631 meshes better with this study than 732.

http://iopscience.iop.org/article/10.1088/1748-9326/aa822a/meta

Unknown said...

The fee is on Fossil fuels sold or used within this state. But there's a problem: if company A sells the fuel to company B, who sells it to C, who burns it, who pays? You can't charge them all, and the text recognises this: The fee must be levied only once on a particular unit of fossil fuels. But as far as I can see the text makes no attempt to say which of A, B or C gets to pay. Are they, perhaps, intended to sort it out amicably amongst themselves?

Couldn't they do it the way they charge VAT?

David B Benson said...

As a minor note, there is no VAT in the USA. Some states have a sales tax paid by final consumers.

William Connolley said...

> As for "tax" vs "fee", there's value in not calling it a tax

Politically, yes. People fear the word. But I was objecting to what looked like an attempt to write that into law, which is surely doomed to failure and therefore silly.

> VAT

Doing it via some VAT-like analogue would indeed work. Though as DB points out, the USA doesn't have VAT, so the concept might not come naturally. And there is some complexity to it.

Note: when I wrote "bits of the text appear to have been written by children" I was sticking my neck out, and seriously expecting someone to flame me by pointing out the obvious errors in my reasoning, though I couldn't see what I'd got wrong. Can it really be true that the thing really is that badly written? How can that happen?

Russell Seitz said...

Myhre nice, apoplectic watermelons not so much-
Bellamy seems out to make Bast, Singer & Soon look honest.

https://vvattsupwiththat.blogspot.com/2018/09/reds.html

David B Benson said...

DBB, not DB, please.

As a Washington state native and long time resident, I fear that logical American English is not well taught here.