Carbon tax: State’s prediction of lost economic growth was an error

Officials say human error led to a false prediction of a potential tax's long-term impacts.

 

By John Stang, Crosscut

September 22, 2014 (Seattle, WA) – Oops. It appears that a possible Washington carbon emissions tax won't have a major impact on the state's economic growth through 2035. That's a reversal from what the state said less than two weeks ago, when it predicted significantly less long-term growth if a tax were enacted.

Instead, the revised predictions show that potential carbon emissions taxes would have slight effects on the state's economic growth through 2035, said Chris Davis, Gov. Jay Inslee's senior policy advisor for energy and carbon markets. That is in line with what the state has said all along about negligible economic effects over the next decade.

In essence, economic data from an apples box was mixed with information from an oranges box during the creation of computer simulations that went to a Sept. 9 briefing of an advisory task force on how carbon emissions should be trimmed. Davis said that data designed for one type of computer simulation was mixed in with data designed for another type of computer simulation to produce the Sept. 9 economic growth predictions. The Sept. 9 figures showed Washington's gross domestic production — essentially the level of government spending, investments and consumer money churning around the state in a given year — growing much less in the long run if a carbon tax were imposed.

In the Sept. 9 report, an economic scenario with no carbon emissions tax predicted a GDP growth increase from $400 billion today to about $900 billion in 2035. But with a carbon tax, Washington's ultimate GDP growth would be reduced anywhere from $284 billion to $350 billion by 2035, the figures then indicated. With a small tax, the simulation predicted GDP growth to roughly $616 billion in 2035. Modeling the effects of a higher carbon emissions tax saw the GDP increasing from $400 billion today to only $550 billion in 2035.

Read the entire story here.

John Stang is a longtime Inland Northwest newspaper reporter who earned a Masters of Communications in Digital Media degree at the University of Washington. He can be reached by writing editor@crosscut.com.

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