The phrase “Green New Deal” has been thrown around a lot as Democrats prepare to take back the House of Representatives for the first time since 2010. Liberal champion, Alexandria Ocasio-Cortez, brought the issue to the forefront of the Democratic Party when she spoke to activists protesting for more decisive action on climate change. At the same time, Ocasio-Cortez has been recruiting support for her resolution to create a select committee aimed toward passing a Green New Deal. Such legislation would radically change the U.S. economy: It calls for switching to 100% renewable energy, decarbonizing agriculture and other industries, and heavily investing in green jobs. Yet advocates of a Green New Deal were also delivered a stark reality check on election night, when a ballot measure to create a carbon tax was rejected by 56% of Washington state voters. In a state that elected Democratic leadership by large margins and is more likely, on average, to believe in anthropogenic climate change than the rest of the country, this was the second failed attempt to pass some version of a carbon tax. This defeat is a sign of trouble as Democrats try to organize around comprehensive climate change policy. However, California, which has the most stringent climate change laws in the country, can shed light on how to do this. In light of the second failure to pass comprehensive reform in Washington, Democrats should focus on California’s incremental changes as a way to set the stage for larger policies down the road.
Washington Initiative 1631, or the Carbon Emissions Fee Measure, proposed a $15 dollar tax on every ton of carbon emitted. The taxed money would subsequently be used to fund renewable energy projects and jobs. The oil industry attacked the bill with an incessant stream of negative ads. BP, Chevron, Phillips 66, and other oil companies spent $31 million on the “No on 1631” campaign, making it the most expensive ballot initiative campaign in Washington history. The Big Oil ad campaign argued the initiative would cause gas prices to go up, while big companies themselves would be exempted from rising taxes. It was an effective message. Groups like the Seattle Times opposed the bill, echoing the claim that it would charge the people more than the companies. Yet the companies exempt from the carbon fee are fewer than it would appear from attack ads. A coal plant that will close in 2025, along with a few companies that export most of their products, will be exempt in order to remain competitive. Yet 80% of the state’s fossil fuel emitters, the largest polluting group in the state, will be subject to the fee, which serves as reasoning why the industry has fought to convince the public that the initiative is unfair and will do little to remedy climate change.
For environmental advocates, the defeat of this initiative was especially painful: The action was seen as the solution to a failed 2016 carbon tax initiative. To attract support from the right, the 2016 initiative gave tax cuts to businesses, which outweighed the revenue brought in by the tax. It split the environmental movement, with the Sierra Club, the Union of Concerned Scientists, and 350Seattle.org opposing the bill because they believed it disproportionately hurt poor families. Any rise in energy prices threatens low-income families since they spend a larger percent of their income on energy bills. The “No on 1631” campaign underscored this issue by convincing the public that they were going to pay more in carbon taxes than businesses will. 1631 was able to unite the opposing sides of the environmental movement- as it considered the requests of many different groups- and promised to invest most of the money back into green jobs while bolstering low income communities. Despite this, 1631 was still unable to garner enough popular support.
Instead of chasing a sweeping carbon tax bill, which attracts the firepower of the fossil fuel industry, Democrats should pursue the incremental policies which have successfully reduced greenhouse gas emissions in California. Fully implemented in 2013, the Global Warming Act of 2006 authorized the state to create a cap and trade system which set an overall limit on carbon emissions and allowed businesses to trade their allocated pollution permits. Every year, the cap decreases – Co2 emissions are allowed to reach 358.3 million metric tons in 2018 and 346.3 million metric tons in 2019. The pollution cap permits a 5% rise in price every year, which adjusts for inflation. The money raised by the program is then channeled into California Climate Investments, a fund used to address global warming. By 2017, $6.5 billion dollars had been raised and over a billion dollars had been spent to put zero-emission vehicles on the road. Electric school buses now take children to school in many parts of the state. The fund also pays for land management programs along the coast, which use oyster beds and reclaimed wetlands to buffer communities from rising sea levels.
Economically, cap and trade has been easier to gain political traction than a carbon tax. Businesses can create multi-year plans for emissions reductions through cap and trade. In contrast, a carbon tax requires a yearly payment for carbon emissions, therefore allowing less flexibility. In times of economic recession, a cap and trade system more quickly reacts to lower the cost of pollution credits through market forces. In a carbon tax system, government intervention would be required to change the price of carbon emissions. Furthermore, the cap and trade system has not hindered economic development: The state has reduced carbon emissions by 13% since 2004, while the economy has grown 26%.
The cap-and-trade program is not without its critics. Business groups and the Chamber of Commerce have decried it as another tax on the business community that stunts growth. Environmental justice advocates have fought against a provision of the program which allows power plants to continue polluting low-income communities. To remain compliant with the carbon cap, businesses have the option to offset their emissions in one place by reducing emissions in another. Since most power plants are located in low-income, minority neighborhoods, the “offsetting” option actually encourages the disproportionate pollution of disadvantaged areas.
California’s cap and trade model has been able to weather criticism from environmental justice advocates in part because 35% of its revenue must benefit low-income communities. In 2018, 48% of the 1.2 billion dollars that went towards putting zero-emissions vehicles on the road benefitted low-income communities. While environmental justice remains a concern with cap-and-trade, the problems are not as prominent when compared to a carbon tax. Because carbon is taxed on the consumer, rather than on businesses, it can disproportionately hurt low-income families. In contrast, the cap and trade system charges businesses directly. Despite these criticisms, the cap and trade system in California has effectively reduced greenhouse gas emissions below 1990 levels, and did so two years ahead of schedule. The state’s emissions reductions are equivalent to taking 12 million cars off the road.
California has effectively reduced CO2 emissions because it relies on an array of environmental policies. Democrats looking to shrink the country’s carbon footprint should advocate for a bevy of programs, not just one cap and trade bill. California boasts one of the strictest renewable energy standards in the country, requiring 100% of the state’s energy to be clean by 2045. It has been shown that encouraging renewable energy sector growth is more popular among voters than discouraging carbon based energy sources. For example, despite Washington’s failure to pass its carbon tax, voters in Nevada agreed to source 50% of their energy from renewable sources by 2030. While Arizona failed to pass a similar renewable energy standard, Nevada joined the 29 other states with renewable energy standards, requiring a certain percentage of the state’s energy portfolio to be from renewable sources. Although these laws vary in scope – Hawaii must rely completely on renewable energy by 2045 while South Carolina only requires 2% by 2021 – they provide a foundation for renewable energy requirements. Growth in the renewable energy sector also leads to more jobs, which is obviously popular among voters.
As Democrats address the possibility of a “Green New Deal,” they should follow California’s model: distribute carbon reduction goals across a multitude of programs, create popular clean energy jobs, and use the incremental process of a cap and trade program to ease economic concerns surrounding carbon pricing. Because the cap and trade model in California addresses environmental justice, has not hindered economic growth, and is coupled with other initiatives like a renewable energy standard, it has largely been a success. California has been able to fund a variety of other environmental initiatives from the revenue of the cap and trade program, such as incentives for electric vehicles. In addition, it has raised support among the business community for its environmental regulations, including the requirement that new homes be equipped for solar panels. The momentum from a wide scope of emissions reduction laws allows new programs and regulations to pass easily through the state legislature. Democrats can replicate this pathway on a national level by advocating for a multitude of programs, thereby building support for a more comprehensive cap and trade policy. This incremental model can give Democrats the momentum to leap forward with larger policies to create a clean energy future.
Photo: “People’s Climate March 3”
