Carbon tax supporters would prefer you don't calculate the cost

Oct 10, 2018

Given a choice between real-world data and modeled results, what should we believe? Those pushing the carbon tax initiative, I-1631, say we should ignore the data in favor of a model. The real-world data say otherwise.

According to the Washington State Budget and Policy Center, under Initiative 1631, theoretical households would pay only $159 per year in 2020.

The Budget and Policy Center supports the carbon tax, and in a recent blog tried to downplay the costs for families in Washington. They wrote that, “I-1631 would raise high-carbon fuel and energy costs by an average of $13 per month per Washington household in 2020.” The claim that our estimate, which ranges from about $250 to $325 per household per year, is “unrealistically high.”

First, it is unclear if they are using "calendar year 2020" to intentionally reduce the cost. The tax would begin in July of 2020, so would only have half the cost as during the first full year of implementation, 2021. I can’t tell if they are using a trick to reduce the cost or whether they don’t realize the tax doesn’t take full effect until 2021.

Second, their methodology to come up with the cost is abstract at best. They note, “Carbon pollution fee revenues were obtained from Carbon Tax Assessment Model (CTAM),” from which they determined that $472 million would be paid by individuals. They then divided by the number of individuals, and then multiplied by the number of people per household. That’s how they determined the cost would be $159, on average.

The models make numerous assumptions and multiplying those results – each with their own margin of error – by the number of people and households is only theoretically related to actual costs.

We, on the other hand, used actual data.

For example, the U.S. Department of Transportation reports that the average vehicle in Washington state uses 622 gallons of fuel each year. That amounts to 12 gallons of gas a week. Put another way, this is filling your gas tank about every week and a half.

In the first year of the carbon tax it would add about 14 cents per gallon of gas, for a cost per vehicle of $87.08 using 622 gallons per car. For the average household with two cars, that would be $174.16. That is more than Budget and Policy’s estimate of $159, and that doesn’t include home heating or electricity.

For natural gas home heating, we used actual data from Avista in Spokane and Puget Sound Energy in the Seattle area. For electricity, we used data from the Energy Information Administration. In other words, we use actual data for the typical Washington household.

Vlad Gutman, over at the left-wing group Climate Solutions, however, doesn’t like the results. He calls them “flat out wrong.” He says, “This isn’t a simple mistake. … This is intentionally misleading.” I accept the backhanded compliment that he acknowledges I am competent, albeit dishonest. For many on the environmental left, all opponents are either liars or incompetent.

What it remarkable, however, is that he puts his entire faith in a model, which is a imperfect facsimile of reality, and not actual data about how much people use. If the real-world data disagree with the model, the data are, he proclaims, “flat out wrong!”

To be clear, I don’t believe Vlad is being dishonest. Nor do I believe he is incompetent. Rather, he is so emotionally committed to his viewpoint, he never even assesses whether the model is realistic or not. He does not do the math to see if it passes the smell test. Nowhere in his blog does he even attempt to provide any real-world data for his assertion. One cannot be dishonest or incompetent if they don’t even make the effort to ascertain the truth.

But, rather than believe me or the Budget and Policy Center’s hand waving abstractions and Climate Solutions’ data-free intuition, measure for yourself.

  • Figure out how many gallons you use each week and multiply that by 14 cents per gallon.
  • Look at your home heating bill and multiply the number of therms of natural gas by eight cents.
  • Electricity is more variable, depending on your utility, but it is a small portion of the overall tax impact. The statewide average is about $20 per year. It is higher in Spokane and the Seattle suburbs.

Do your own calculation. My guess is that most of you will find $159 a year is far too low.

This does not include costs paid by businesses that are passed on to consumers. Nor does it address the fact that after five years, the tax will increase by 67 percent, plus inflation. So these are the low end of what this will cost.

It is worth noting that the revenue-neutral carbon tax two years ago offered a tax calculator to see how your tax bill would change. The Yes on 1631 campaign, however, has studiously avoided putting a calculator on their page. They have many pages discussing all the ways the money would be spent. They don’t have one telling you what you would pay. There is a reason. They don’t want you to know.

There is an additional irony. Advocates of the carbon tax want people to feel the impact of the tax. As gas taxes increase, they want people to switch to more fuel-efficient cars or take other actions that reduce their CO2 emissions. Claiming people won’t feel the cost undermines their own justification for the tax.