Read my lips: No new (carbon) tax

The state of Washington was supposed to provide national leadership in climate policy by enacting a carbon tax. It tried in 2016 though initiative 732 but it secured about 41 percent vote only.

The key reason for this failure was its policy design: I-732 was a “revenue neutral” tax proposal designed to return tax revenues back to citizens and businesses. Most mainstream environmental, labor and social justice groups opposed it because they sought new tax revenues to support climate action and social justice projects.

In contrast, I-1631 was a “revenue positive” proposal that would have generated about a billion dollars of new tax revenue annually. A governor-appointed expert panel would then allocate these tax proceeds to various climate projects. Mainstream liberal groups actively campaigned for I-1631 because it provided resources for the projects such as mass transit that they passionately supported.

{mosads}In spite of this broad liberal support, Initiative 1631 (carbon fee) is heading towards a resounding defeat in the state of Washington. As of Nov. 8, the “Yes 1631” has secured only 43.67 percent of the vote. This is a slightly better than vote share of the 2016 Carbon Tax Initiative I-732 that secured 40.78 percent. Liberal consolidation behind 1631 increased the vote share by about 3 percent points only in relation to I-732 — roughly from 41 percent to 44 percent. 

Why did I-1631 fail? The reason for the failure is straightforward: Washingtonians (perhaps most Americans) do not like new taxes, especially when they perceive benefits from the tax increase going to groups outside of their community. They might support local bonds or levies for say schools, but not for mitigating climate change. I-1631 opponents were able to successfully portray it as a tax increase with no visible benefits for Washington families.

Other tax measures in the 2018 midterms were also voted down by Washingtonians. Advisory Vote 19, which advises legislature to either maintain or repeal the expansion of oil spill response tax to oil and petroleum received by pipelines, secured only 47 percent votes, meaning the tax increase will be repealed. Initiative 1634, which prohibits local governments from enacting taxes on groceries, was opposed by 45 percent. 

Let’s consider the county-wide vote share in support of the carbon fee (I-1631) in relation AV 19 (oil spill tax), and I-1634 (local governments’ ability to impose new taxes). When compared, the counties that voted for I-1631 tend to overlap with those that voted for AV19 and to a lesser extent with I-1634.

While Washingtonians voted down tax increases, they supported liberal candidates and other liberal causes. Democratic Sen. Maria Cantwell coasted to a solid reelection with 59 percent of the vote. 

When compared, there is almost a uniform erosion of support for I-1631 in relation to Cantwell across counties. The overall vote gap is about 15 percent: roughly, in every county, one out of four Cantwell voters did not support I-1631.

Washingtonians voted for other liberal causes such as gun control and training for police officers. Both Initiative I-1639, which implements changes to gun ownership and purchase requirements, and Initiative I-940, which requires specific training for law enforcement and changes the standards for use of deadly force, have passed with 60 percent and 59 percent respectively. 

Again, as with Cantwell comparison, we see a systematic underperformance of I-1631 in relation to other non-tax liberal causes.

Carbon taxation is often touted as an important pillar of climate policy. It has a compelling economic logic because it works through the market mechanism and forces consumers to bear some of the social cost of carbon that they have been passing on to taxpayers and future generations. 

But carbon taxation does not seem to have a compelling political logic. Citizens might believe that climate change is a serious threat and needs to be addressed, but they are not willing to pay higher taxes to mitigate it, even in liberal Washington, especially if the benefits flow outside the state.

The “Yes 1631” campaign did tout many benefits such as new jobs that tax revenues would generate. The measure also exempted several industries in which higher energy taxes might lead to job losses. But in the end, one of the four Cantwell voters did not buy into this message.

Environmental groups must then look for other instruments for climate policy such as cap and trade schemes that do not bear the tax (or fee) label. In terms of policy venue, these groups had to work to pass policy through a ballot initiative, because the legislature was not willing to enact meaningful carbon policy. I-1631 defeat perhaps will require them to revisit the legislative route again for this purpose.

Nives Dolsak is a professor and the associate director of the School of Marine and Environmental Affairs at University of Washington, Seattle

Aseem Prakash is the director of the Center for Environmental Politics, and the Walker Family professor for the College of Arts and Sciences at University of Washington, Seattle.

Steven M. Karceski is a fellow at the Center for Environmental Politics.