A Carbon Tax Is Pretty Much Inevitable, Even if Voters Said No

The first statewide carbon tax in the United States almost certainly isn't going to happen. Washington votes by mail, so it ain’t over yet, but the No side of Initiative 1631 has just over 56 percent, with more than two thirds of the votes counted. It doesn’t look good.

LEARN MORE

The WIRED Guide to Climate Change

That’s a disappointing end for a bill that some environmentalists and journalists had held out as a bellwether. Success would’ve told politicians and policymakers that, yes, Americans were finally ready to pay a little more money to save the planet. Initiative 1631 was technically a fee, not a tax; It would’ve charged many emitters $15 per metric ton of carbon, increasing every year until emissions declined—and the money would pay for green infrastructure like clean power generation, environmental remediation, and projects in communities most affected by pollution. (Polluters might well have passed on that price to consumers.) On the yes side: The Nature Conservancy, Bill Gates, REI, and a coalition of political groups. On the no side: $31 million of oil company money.

It would’ve been the first major carbon tax in the US, but not in the world. Finland was first, in the 1990s. They’re common throughout Asia and Europe. In Canada, British Columbia has had one since 2008, and its outcomes have reportedly been good—more jobs, reduced emissions. The US is the outlier here, though the idea has floated up at the federal level in the US, too—most recently from Carlos Curbelo, a Republican representative from Florida. (Washington state rejected a straight carbon tax in 2016; the money it raised was supposed to go back to taxpayers as rebates.)

A carbon tax is the sort of thing that economists have mostly agreed is obvious—greenhouse gases are an “externality,” a damaging side effect that causes harm to the environment but isn’t included in the price of a carbon-based economy. It’s possibly, theoretically, to figure out how much more damage an additional unit of pollution causes; those are so-called marginal damages. “In textbook economics, you set the price equal to the marginal damages, and that gives you a cost-efficient reduction in the damages caused by the externality,” says Marc Hafstead, director of the Carbon Pricing Initiative at Resources for the Future. It’s a little more complicated than that, Hafstead allows, because emissions are global and it’s hard to pin down exactly what the marginal damages are, but the basic idea is, if you tax emissions, people will emit less to avoid paying the tax wherever they can.

Washington voters seem to agree that the place where it’s most efficient to reduce emissions is “nowhere.” Most Americans believe global warming is real, people are a cause, and someone should do something. But on that last thing, they may not agree who or what. Opponents of the Washington bill argued what opponents of taxes usually argue: not enough oversight over how the money would be spent, wouldn’t achieve the goal it set out to, wasn’t fair. “It acts as a regressive tax, hurting those who can least afford to pay more, and it’s going to be ineffective at reducing Washington’s greenhouse gases,” said the No on 1631 campaign spokesperson Dana Bieber on election day. (A carbon tax doesn’t have to be regressive; that’s the sort of thing economists and policymakers fight about, but 1631’s supporters worked with communities that might have taken a harder hit to satisfy their concerns, and arguably the public health benefits would outweigh any expense.)

On its face, 1631’s apparent defeat was the capstone on a pretty bad day for environmental legislation. Arizona voted against a harder shift to renewable energy. (California tech billionaire Tom Steyer spent almost $18 million trying to put that one over the top; the local power company spent more.) Nevada said yes to renewables but declined to break up the state energy monopoly. Colorado voted to expand oil and gas drilling. Curbelo, the climate-minded Florida rep, lost his re-election bid. The planet is still burning.

From a political perspective, all of that suggests dealing with climate change will require strong national leadership. About which, uh oh, since President Trump doesn’t believe human beings cause climate change and lots of big Republican funders are tied to carbon-emitting industries.

Still, you could choose to look at your glass of petrochemicals as being half full. “Ballot measures are often susceptible to misinformation and lots of out-of-state money pouring in, and there are limitations on what a ballot measure can cover,” says Dylan McDowell, deputy director of the National Caucus of Environmental Legislators, a group that helps state legislators enact climate laws. “State legislation is more able to deal with something as complex as carbon pricing.”

Thanks to Democratic takeovers of governorships and state houses in 2018, that’s now more likely. New York, Colorado, New Hampshire, Maine, and Minnesota now have pro-environment majorities. Massachusetts is moving toward carbon pricing; Oregon legislators will probably vote on a cap-and-trade law next year. The governors-elect of Illinois, Colorado, and New Mexico all campaigned on renewables. And California still has its cap-and-trade system for carbon, and a new governor fired up to head into combat with the president. So the state level may still be a place for climate legislation.

Those state legislators sometimes become national policymakers. NCEL’s McDowell points out that his group worked closely with Iowa congresswoman-elect Abby Finkenauer when she was in the legislature. “One of the amazing takeaways is that the urgency we feel about taxing climate change has actually increased since we began the campaign,” Mike Stevens, state director in Washington for the Nature Conservancy, said on election day. Washington’s carbon tax might not be the first in the nation, but someone’s will be.

SCIENCE