Washington Initiative 732 (I-732) was a ballot initiative in 2016 to levy a carbon tax in the State of Washington, and simultaneously reduce the state sales tax. It was rejected 59.3% to 40.7%. The measure appeared on the November 2016 ballot. The backers of I-732 submitted roughly 350,000 signatures in December 2015 to certify the initiative.
The initiative was spearheaded by environmental economistYoram Bauman, a strong advocate of carbon pricing. It was modeled after the British Columbia carbon tax, which was considered “popular across the political spectrum”. The carbon tax in British Columbia caused the province’s fuel consumption to decrease by 16% and its greenhouse gas emissions to decrease 3.5 times faster than the emissions of Canada as a whole, while maintaining steady economic growth.
The ballot measure summary as written by the Secretary of State of Washington:
“This measure would impose a carbon emission tax on the sale or use of certain fossil fuels and fossil-fuel-generated electricity, at $15 per metric ton of carbon dioxide in 2017, and increasing gradually to $100 per metric ton (2016 dollars adjusted for inflation), with more gradual phase-in for some users. It would reduce the sales tax rate by one percentage point over two years, increase a low-income sales tax exemption, and reduce certain manufacturing taxes.“
Initiative 732 contained four provisions:
- Creates a new tax on the carbon content of fossil fuels initially set at $15 per ton, rising to $25 per ton after 6 months, and increasing annually to a cap of $100 per ton.
- Reduces the Washington State Sales Tax 1% from 6.5% to 5.5%
- Reduces the Business and Occupation Tax on Manufacturing Businesses in Washington State to .001%
- Funds the Working Families Tax rebate program, a 25% match on the state’s version of the earned income tax credit for 460,000 Washington households.
The primary sponsor of Initiative 732 was CarbonWA, a group founded by environmental economistYoram Bauman to promote carbon pricing. The Audubon Society was also a major proponent of Initiative 732, “Audubon Washington believes Initiative 732 provides swift and effective action to reduce carbon pollution”. Other organizations that supported Initiative 732 included the Sightline Institute, and the Citizens’ Climate Lobby. Other supporters include Washington State legislator Joe Fitzgibbon (D), Washington State Senator Steve Litzow (R), Washington State Senator Joe Fain (R), Washington State Senator Cyrus Habib (D), and the editorial board of The Olympian. Climate scientist James Hansen, who has been involved with the Citizens’ Climate Lobby for many years, strongly supported the proposal.
The backers of initiative 732 claimed that I-732 “taxes carbon to fight climate change, boost clean energy, & save the environment for future generations”.