Can Hawaii afford climate change lawsuit settlement?

Hawaii recently entered into a settlement in a first-of-its-kind lawsuit that requires the state to implement climate change initiatives by court order, setting forth a potential template for lawsuits in other states.

Thirteen young people, at least one as young as nine, filed the lawsuit against the Hawaii Department of Transportation in June 2022. They said the state DOT needed to do more to protect the state and their future from climate change.

The state spent $3 million settling the lawsuit, money the attorney general’s office said was “well-spent” to avoid a trial that would have started June 24.

The settlement provides a road map of tasks the DOT must do per the court order. These include creating a greenhouse gas reduction plan for the Hawaii Department of Transportation that could cost the state more. Only one price tag is included in the plan—$40 million for public electric charging stations and charging infrastructure for all state and county vehicles by 2030.

The agreement includes a dispute-resolution component that could keep differences out of court. But, the First Circuit of Hawaii will oversee the settlement until 2045 if Hawaii has not met its zero-emission goals.

The Hawaii Department of Transportation must receive “sufficient appropriations” from the Hawaii Legislature, but the settlement does not include a specific amount for the other requirements.

Gov. Josh Green admitted it would not be inexpensive or easy. He said the court order would help him when he had to go to the Legislature and say, “Look, we have to do this.”

“We have these policies in mind but we don’t have the resources that come from the Legislature,” Green said. “We don’t often have the absolute insistence of the courts to do certain things so having a settlement like this creates some guarantees.”

For two years, the governor has pushed for a $25 tourist fee that has not passed the Legislature.

“We have 10 million individuals that come to Hawaii every year,” Green said. “Can you imagine only for a moment if we successfully were humbly asking people to pay $25 when they came to the state? That would be $250 million every single year to pay for the bikeways, extra to bring very advanced analytics to what our carbon impact is from any of the technologies we use, money to get bond to navigate major protections against erosion of the coastline.”

Thomas Yamachika, president of the Tax Foundation of Hawaii, told The Center Square, “There’s going to be some pain,” when finding money to implement the settlement’s initiatives. The Legislature passed tax breaks this year to increase the standard income tax deduction in odd years and lower tax rates for all brackets in even years. It’s possible those tax cuts could be “walked back,” Yamachika said.

Truth in Accounting, which does an annual financial analysis of the 50 states, told The Center Square that Hawaii is already $11 billion in debt.

“The state doesn’t have money sitting around that can be used for settlements like this,” said Sheila A. Weinberg, founder and CEO of Truth in Accounting. “To pay for this settlement, taxes will have to be raised or services and benefits will have to be cut. The other option is to even underfund the pension and retiree health care benefits even more.”

Hawaii is the first to settle a climate change lawsuit, but it may not be the last. The case may set a precedent in other states where young people have filed lawsuits over climate concerns, according to an op-ed written by Cara Horowitz, executive director of the Emmett Institute on Climate Change and the institute’s communications director, Evan George.

“Many defendants facing climate lawsuits — notably including Hawaii officials in the earlier stages of this case — often protest that climate change policy should be made by legislatures, not judges,” Horowitz and George said in the op-ed published in the Los Angeles Times. “This landmark settlement demonstrates that the courts can hold decision-makers accountable if they fail to live up to their promises.”

Kim Jarrett

Associate Editor

Related Topics:#HawaiiClimateChange #KimJarrett #TheCenterSquare

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Published on November 21, 2024

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From the Fraser Institute

By Ben Eisen and Jake Fuss

Recently, Prime Minister Justin Trudeau announced several short-term initiatives related to tax policy. Most notably, the package includes a two-month GST holiday on certain items and a one-time $250 cheque that will be sent to all Canadians with incomes under $150,000.

Unfortunately, the Trudeau government’s package is a grab bag of bad ideas that will not do anything to get Canada out of the long-term growth rut in which our economy is mired. There are too many to list all in one place, but here are four of the biggest problems with Prime Minister Trudeau’s tax plan.

It reduces the wrong taxes. When it comes to economic growth, not all taxes are created equal. Some cause far more economic harm per dollar of government revenue raised than others. The government’s package creates a holiday on the GST for some items (only for two months) which is a mistake given that the GST is one of the least economically harmful components of the tax mix. Canada’s recent growth record is abysmal, and boosting growth should be a primary goal of any changes to tax policy. A GST cut of any duration fails this test relative to other tax cuts.
Temporary tax holidays shift consumption in time, they don’t boost growth. The government’s GST reduction is actually a short-term tax holiday on certain items that will last two months. There are decades worth of economic research showing that when governments create short-term tax breaks, they may change the timing of consumption, but they won’t contribute to actual economic growth. Shifting consumption from the future to the present won’t help get Canada out of the economic doldrums. This is particularly true of the Trudeau tax holiday since purchases that Canadians may have made after the two-month holiday period will simply be shifted forward to take advantage of the absence of the GST. As noted above, there are better taxes to cut than the GST, but no matter what taxes we are talking about permanent reductions are vastly superior to temporary tax cuts like short-term holidays.
One-time tax rebates don’t improve economic incentives. Perhaps the worst element of the Trudeau government’s announcement was a plan to send $250 cheques to all Canadians earning under $150,000. One-time tax rebates are a terrible way to provide tax relief. When you cut income tax rates, you improve incentives for people to work and invest because they get to keep a larger share of their earnings. This helps the economy grow. One-time rebates that you get regardless of the economic choices you make has no similar effect. This means that the rebate with its $4.7 billion price tag won’t help Canada’s poor growth performance.
It borrows from the future to give to the present. The federal government is currently running a large deficit. This raises the question of who will have to pay the $4.7 billion bill for the one-time payments announced today. The answer is that the government will have to borrow the money and therefore future taxpayers will have to either pay it off or service the extra debt indefinitely. The money the Trudeau government will send out won’t come out of thin air, it’ll have to be borrowed with the burden falling on future taxpayers.

The Trudeau government got one thing conceptually right, which is that there are advantages to reducing the tax burden on Canadians. Unfortunately, the policy package it has put forward to provide tax relief gets everything wrong. It reduces the wrong taxes, shifts taxes temporally rather than cutting them, does nothing to improve economic incentives, and burdens future taxpayers. With the holiday season around the corner, this attempt at a gift to Canadian taxpayers is the economic equivalent of a lump of coal in the stocking.

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Ben Eisen and Jake Fuss

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Carbon tax bureaucracy costs taxpayers $800 million

Published on November 19, 2024

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From the Canadian Taxpayers Federation

By Ryan Thorpe

The cost of administering the federal carbon tax and rebate scheme has risen to $283 million since it was imposed in 2019, according to government records obtained by the Canadian Taxpayers Federation.

By 2030, the cost of administering the carbon tax is expected to total $796 million, according to the records.

“Not only does the carbon tax make our gas, heating and groceries more expensive, but taxpayers are also hit with a big bill to fund Prime Minister Justin Trudeau’s battalion of carbon tax bureaucrats,” said Franco Terrazzano, CTF Federal Director. “Trudeau should make life more affordable and slash the cost of the bureaucracy by scrapping the carbon tax.”

The government records were released in response to an order paper question from Conservative MP John Barlow (Foothills).

The carbon tax and rebate scheme cost taxpayers $84 million in 2023, according to the records.

There were 461 federal bureaucrats tasked with administering the carbon tax and rebate scheme last year, according to the records.

The CTF previously reported administering the carbon tax cost taxpayers $199 million between 2019 and 2022.

Projected costs for administering the carbon tax and rebate scheme between 2024 and 2030 are $513 million, according to the records.

That would bring total administration costs for the carbon tax and rebate scheme up to $796 million by 2030.

But the true hit to taxpayers is even higher, as the records do not include costs associated with the Fuel Charge Tax Credit for Farmers or the Canada Carbon Rebate for Small Businesses.

“It’s magic math to believe the feds can raise taxes, skim hundreds-of-millions off the top to hire hundreds of new bureaucrats and then somehow make everyone better off with rebates,” Terrazzano said.

The carbon tax will cost the average household up to $399 this year more than the rebates, according to the Parliamentary Budget Officer, the government’s independent, non-partisan budget watchdog.

The PBO also notes that, “Canada’s own emissions are not large enough to materially impact climate change.”

The government also charges its GST on top of the carbon tax. The PBO report shows this carbon tax-on-tax will cost taxpayers $400 million this year. That money isn’t rebated back to Canadians.

The carbon tax currently costs 17 cents per litre of gasoline, 21 cents per litre of diesel and 15 cents per cubic metre of natural gas.

By 2030, the carbon tax will cost 37 cents per litre of gasoline, 45 cents per litre of diesel and 32 cents per cubic metre of natural gas.