Earlier this year, dozens of well-known economists backed a proposal to use a carbon tax as part of the federal policy response to global warming. Carbon taxes are generally popular with policy wonks, since they offer a way to use market forces to limit pollution and develop more environmentally friendly technologies, and they resonate with voters, too, with about half of Americans saying they support the idea.
At the ballot box, however, carbon taxes have racked up a dismal record. In the most recent example, last year voters in relatively liberal Washington state rejected a proposal to tax carbon dioxide emissions, despite backing from a broad coalition that included unions, health groups and wealthy supporters such as Bill Gates and Michael Bloomberg. The failed initiative would have levied a tax of $15 per metric ton of emissions, raising an estimated $1 billion per year by 2023, with the funds used for renewable energy projects and to aid workers who were negatively affected by the move.
New research highlighted by the Tax Policy Center’s Howard Gleckman sheds some light on why carbon taxes have fared so poorly in the U.S. According to a paper recently published by the National Bureau of Economic Research, opposition to carbon taxes in Washington state was related to several factors:
- Political ideology: Researchers found that ideology was the single biggest factor in determining attitudes toward carbon taxes, determining 90% of the variation in voting. Support or opposition to carbon taxes aligned with liberal and conservative attitudes on a whole host of issues.
- Organized opposition: Well-funded interest groups helped shape public perception of the issue, with opponents successfully reframing the levy as a “tax” rather than a “fee.”
- Promised benefits don’t matter much: Although the perception of personal tax burdens seemed to matter for some voters, with those facing a higher taxes expressing less support, the design of the proposal – i.e., whether the tax revenues from the carbon tax would be used to lower income taxes or for green energy research – didn’t seem to affect voter attitudes, perhaps because voters were skeptical about receiving any benefit from the program.
Although the analysis focused on just one state, the researchers concluded that carbon tax ballot initiatives would likely fail in any state that offered them. “Carbon taxes have run into similar problems in France and Canada and selling them here will not be easy,” Gleckman writes. “If supporters of what seems to be an effective solution to an existential problem are going to turn their ideas into policy, they are going to have to tell a much better story.”