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Are voters ready to tax pollution?

Are voters ready to tax pollution?
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If states are “laboratories of democracy,” ballot initiatives in Washington and California next month will test whether voters are willing to tax pollution, and how the revenue should be spent. These experiments will provide crucial insights for shaping climate initiatives elsewhere.

In Washington state, Ballot Initiative 1631, also known as the Carbon Emissions Fee Measure or the Protect Washington Act, would impose a fee on the state’s largest industrial polluters. The fee would start at $15 per ton of carbon dioxide in 2020, and rise by $2 per year plus inflation thereafter.

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That’s nowhere near the more than $100 per ton that may be needed worldwide to achieve the Paris Agreement temperature targets. But it would demonstrate for the first time that American voters are willing to tax pollution, at least modestly in a relatively liberal state.

Economists have long argued that putting a price on pollution is the most efficient way to control it. Earlier this week, William Nordhaus won the Nobel Prize in Economics for research connecting that approach to climate change.

But politicians and voters have been reluctant to accept economists’ advice. Nationally, the Republican-led House passed a resolution in July denouncing the mere idea of a carbon tax. In California next month, voters will decide whether to repeal hikes in gasoline and diesel taxes that their legislature passed last year. Earlier this year, Washington’s legislature failed to pass carbon tax legislation backed by Democratic Gov. Jay Inslee. No state has passed a carbon fee at the polls, including the one rejected by Washington voters in 2016.

The rematch in Washington this November provides an intriguing test case of voter preferences on carbon taxes. The new ballot initiative sets a lower price on carbon and exempts different sets of polluters than the initiative proposed in 2016. But the biggest difference lies in how the two plans would use the revenue.

Under the new initiative, Washington would use most of it to ease the transition to clean energy by funding public transit, energy efficiency, and wind and solar power. The rest would go toward protecting forests and clean water, and helping communities affected by climate change or the loss of coal jobs. The 2016 proposal would have instead cut sales taxes and taxes on manufacturers and provided rebates to low-income families.

Conservative economists, retired Republicans, and the bipartisan Citizens Climate Lobby have advocated nationwide carbon tax plans that would rebate revenue to taxpayers. They argue that “revenue neutrality” is essential to avoid growing the size of government and win durable bipartisan support.

CarbonWA followed that logic in crafting their 2016 initiative. But their proposal failed to attract enough fiscal conservatives while splitting environmentalists, many of whom resented the lack of funding for clean energy and vulnerable communities.

In the end, voters rejected it by an 18 point margin. As David Roberts has noted, the supposed “bipartisan appeal” of revenue-neutral approaches has repeatedly failed to materialize in Congress or at the ballot box.

Soon after the 2016 election, a poll found that nearly half of Washington’s “no” voters supported climate action but “want to wait for a better measure.” Nationally, a peer-reviewed study found that more Americans would prefer for carbon tax revenue to be used to fund clean energy or help displaced workers, rather than be rebated. That’s consistent with surveys that find overwhelming bipartisan support for solar and wind power. California leaders argue against rolling back a fuel tax hike that is improving roads and air quality. If Washington’s 2018 ballot initiative outperforms the 2016 one, it would suggest that voters really do prefer clean energy over rebates as surveys suggest.

While this year’s Washington initiative has attracted broader support among environmentalists, it has drawn more strident opposition from industry. Opponents led by the Western States Petroleum Association have raised more than $20 million. Most notably, $6 million of their funding comes from BP PLC, despite its claims to be “committed to a low carbon future.” BP helped found the Climate Leadership Council, which advocates a nationwide carbon tax and dividend. Another CLC founder, Royal Dutch Shell, is staying neutral this time.

The oil industry claims its opposition stems from “unfair” exemptions for aluminum smelters, paper mills, and a coal plant. They have not objected to the plan’s exemptions for marine and aviation fuels. Columbia University economist Noah Kaufman calls the critics' claims "overly simplistic and misleading," noting that the coal plant is slated to retire and that the other exemptions keep trade-oriented industries from moving their jobs and emissions to other states.

 

Whether environmentalists in 2016 or BP today, backers of theoretical carbon fees are impeding actual, reasonable proposals. At some point, cowboys will need to stop rejecting horses because they’d rather ride unicorns. No horse or climate plan is free of blemishes, but we’ll need to ride one of them on a shared path forward.

As a resident of the nation’s most polluting state, I’m in no position to tell Washingtonians how to design their carbon fee, or whether to enact one at all. It’s up to Californians to decide whether to keep fuel tax hikes that repair their roads while cutting pollution. But as an atmospheric scientist, I’m heartened to see states experimenting with what it will take to win public support for enacting and keeping practical climate solutions.

Daniel Cohan is an associate professor in the Department of Civil and Environmental Engineering at Rice University.