Sightline is very pleased to be hosting a new analytical paper and model, “Washington State Carbon Tax: Fiscal and Environmental Impacts” by Keibun Mori, a recent graduate of the University of Washington’s Evans School of Public Affairs. He created the Carbon Tax Analysis Model (C-TAM), for the Washington State Department of Commerce.
It’s an impressive piece of work on several levels. Mori’s analysis, which centers on a British Columbia-style carbon tax, is almost certainly the most comprehensive published treatment of a state-level carbon tax in Washington, and maybe anywhere. Even better, his spreadsheet-based C-TAM model manages to be open-source and comprehensible, but still allow for a remarkable degree of complexity and user input. Mori includes a terrifically thorough treatment of fuel prices and demand elasticity (which is a subject of much debate and confusion in climate geek circles). The result is a solid look at the economic effects and environmental benefits of a state carbon tax in Washington.
The work is doubtlessly on solid ground quantitatively, but it’s less clear that all of the political diagnoses are as well-grounded. For example, revenue-neutral taxes tend to win the hearts of economists and policy wonks (and Yours Truly), but in BC and many other places rebated revenues have proven less popular than direct expenditures on specific programs. And there’s little reason to believe that carbon taxes should be mutually exclusive with cap-and-trade programs. Indeed, they go well together in theory, just as they soon will in practice in BC.
These are quibbles worth having, but they’re really just quibbles. Mori’s work is, overall, a first-rate piece of analysis that makes an excellent contribution to our understanding of carbon taxes. Go read it here.
Update 8/20/12: Mori’s piece is published in the journal Energy Policy.