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What Do the Midterms Mean for Carbon Taxes?

Washington State’s Initiative 1631 to establish a “carbon emissions fee” went down in flames Tuesday with opponents outvoting supporters by 56 to 44 percent. The initiative would have:

  • Enacted a carbon emissions fee of $15 per metric ton of carbon beginning on January 1, 2020
  • Increased the fee by $2 annually until the state’s greenhouse gas reduction goals are met
  • Used the revenue from the fee to fund various programs and projects related to the environment

Atlantic reporter Robinson Meyer summed up the hopes of many progressives in a November 5th column titled “The Ballot Question That Could Transform U.S. Climate Politics.” Meyer explained:

Despite its local focus, Initiative 1631 stands to reshape climate politics in places far from Seattle or Spokane. If it passes, Washington would become the first state in the country—and, in fact, the first large government anywhere in the world—to impose a price on carbon by ballot question. Victory might help convince national politicians—both Democrats and Republicans—who systematically underrate enthusiasm for climate policy, that Americans actually are willing to pay to fight climate change.

Indeed, as “Romneycare” provided a model for Obamacare, so I-1631 could provide a model for national legislation, Meyer speculated:

This century’s defining progressive legislative victory—the Affordable Care Act—would have been impossible if Massachusetts had not implemented a similar, state-level program first under Governor Mitt Romney. If Initiative 1631 passes, it will provide national politicians with another model policy, another civic experiment, to consult if they wish to pass a national climate law.

Meyer acknowledged I-1631 was not a sure thing. Oil companies had contributed $31 million to the “No on 1631” campaign. A previous ballot initiative in Washington State to establish a “revenue-neutral” carbon tax failed in November 2016, and legislation similar to I-1631 died in the legislature in March 2018.

Nonetheless, I-1631 seemed to have real prospects. The “Yes on 1631” campaign raised $15 million, attracting $1 million donations each from Bill Gates and Michael Bloomberg. The sponsors called the carbon penalties “fees” rather than “taxes” to blunt potential taxpayer opposition. Supporters pitched the initiative as a “Green New Deal”—a big new funding source for infrastructure and “green jobs” programs. In addition, Washington State gets only 6 percent of its electricity from coal, so a carbon tax would have less impact on ratepayers there than in the vast majority of other states.   

In a November 7 post mortem on I-1631’s defeat, Meyer wondered: “If climate policy can’t win in the Evergreen State, can it win anywhere?” The prospects are dim, especially on a national scale. A carbon tax is first and foremost a weapon for bankrupting the U.S. fossil-energy sector. Both supporters and opponents know this. It’s why climate policy is controversial. Although some voters in hydro-rich or carbon-poor states may imagine there’s no downside to the “keep it in the ground” agenda, millions of Americans nationwide know better. They understand that a robust energy sector is vital to America’s prosperity, competitiveness, and industrial strength.

In related election news, Rep. Carlos Curbelo (R-FL), co-chair of the House Climate Solutions Caucus, lost his seat to a hardcore green, Debbie Mucarsel-Powell. Curbelo briefly enjoyed the spotlight a few months ago after introducing the misleadingly titled Market Choice Act, a carbon tax bill touted by supporters as a “conservative climate policy.” Free-market opponents warned that a carbon tax is bad policy and dumb politics, especially for conservatives. Curbelo’s defeat is consistent with that assessment.

In a nutshell, Tweedledum conservativism does not work. Curbelo’s support for a carbon tax won him few friends in progressive circles. Mucarsel-Powell’s supporters derided Curbelo as a “climate peacock,” a faux climate warrior who voted for the GOP tax cut bill that opened the Arctic National Wildlife Refuge to petroleum production. They have a point. Why should progressives cast their ballots for an imitation Democrat when they can elect the real thing?

At the same time, Curbelo likely alienated the GOP’s conservative base. The struggle for hearts and minds in this country is to no small degree a contest between a progressive movement that is pro-tax and anti-energy and a conservative movement that is pro-energy and anti-tax. That clear product differentiation is an immense advantage for conservative candidates. Curbelo squandered that asset when he championed a new tax on, of all things, energy.