Two Groups Urging Colorado Carbon Fee Initiatives

Two different strategies to try to raise the price of carbon emissions in Colorado to fight climate change.With considerable fanfare, more than 200 leading climate scientists meeting in Bali last week urged immediate action to reduce global greenhouse gas emissions by 50 percent by the year 2050.

In a “consensus document” on climate change, the scientists said that unless global warming, which is being caused by human-generated greenhouse gases, mostly from the combustion of fossil fuels, is curbed soon:

“Many millions of people will be at risk from extreme events such as heat waves, drought, floods and storms, with coasts and cities threatened by rising sea levels, and many ecosystems, plants and animal species in serious danger of extinction.

Because of warming and emissions already “in the pipeline” – we can’t simply stop generating electricity from coal overnight, for instance – this means that the world’s nations have a 10- to 15-year window in which to act.

Two Colorado groups have taken this to heart. They are working cooperatively, though with different strategies, to place initiatives on the ballot to drive up the price of carbon use in the state while reducing personal taxes to make their proposals “revenue neutral.”

One group, Colorado Clean Energy Tax Shift (COCETS) based in Fort Collins, is trying to get a petition on the ballot for the 2008 election The language is currently being evaluated by state officials. In order to qualify for the ballot, though, the organizers must still collect about 74,000 petition signatures.

The idea behind the initiative is to:

“Reduce Colorado emissions of carbon dioxide from burning coal, oil and natural gas by charging consumers a fee for their emissions and returning all the revenue to Colorado taxpayers.”

The COCETS proposal would institute a fee on carbon emissions from all carbon sources. As a practical matter for consumers, it means that they’d pay more for gasoline and electricity. The fee would be in place for one year, then it would be increased each year to raise the price high enough to discourage fossil fuel use.

The amount of this fee is being deliberately left vague in the proposal. In order to reach the goal set by the Bali statement – a 50 percent reduction by 2050, the fee would have to be set quite high. The exact figures are hard to come by, but a spreadsheet designed to calculate some of the options shows that a $37 per ton carbon tax – the equivalent of about ten cents per gallon of gas – would only reduce carbon emissions from a “business as usual” scenario by about seven percent.

The COCETS proposal deliberately leaves the amount of the carbon fee vague. Proposal author Sue Radford said:

“We very deliberately left the price out. We did that because it is something we have to get data for. We want to set up a process and identify trained economists who can some up with appropriate numbers.”

Money collected from this carbon fee would be counterbalanced by a decrease in taxes paid by individuals and businesses. This would mean that there would be no additional revenue to state government from the fee. In principle, there would also be no extra cost to individuals and businesses, either, since whatever they paid in carbon fees would be returned as money that didn’t go to sales taxes, income taxes or other taxes. If a people wanted a tax cut, they could ride their bikes instead of driving their cars.

But because of the very cost of the carbon reduction proposal, and the likelihood that voters will simply see this proposal as a tax increase, the chances of success of ballot box seem remote.

So a second group is trying to use the same general principles to put together a more politically palatable initiative that may appear on the 2009 ballot. The Colorado Carbon Reduction Initiative has been meeting for several months to craft a proposal that would raise the cost of carbon. But the group is currently polling voters to determine what kind of proposal is likely to get support.

CCRI organizer Tom McKinnon says:

“We’ve got this polling language and we’re taking a slightly more careful, slower approach to see what will poll well with voters.”

CCRI is exploring essentially two scenarios. The first is a large and increasing “carbon tax” designed much like the COCETS proposal. The second is a smaller fee, the proceeds from which would be devoted to the development of alternative energy and energy-efficiency initiatives.

McKinnon says:

“We’re going to do the poll. There are two scenarios. I don’t believe the large one will poll well. The idea can’t survive on a strictly environmental platform. There is a triad of interests, including environment, energy security and the economy.”

McKinnon says the CCRI initiative will probably cost between $5 million and $7 million.

The two groups have a curious relationship. Radford has been working with McKinnon on the CCRI proposal while preparing her own effort. She says of CCRI, however:

“The COCETS proposal has been in the works for a long time. Tom took his group in a direction I was not comfortable with.

McKinnon says of the potential competition from the COCETS initiative:

“The more the merrier. We’re all working for the same ultimate goal, and I wish her the best of luck.”

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Dan Whipple

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