Abstract
In November 2016, Washington State voters were presented with a ballot initiative (Initiative 732) advancing the first carbon tax on production and use of fossil fuels in the United States. Initiative 732 promised to reduce fossil fuel consumption by taxing carbon emissions, while remaining revenue-neutral by lowering taxes on businesses, consumers, and working families. In promising revenue-neutrality, Initiative 732 sought support beyond environmentalists and similarly sympathetic voters. It failed to pass, achieving 41.2 percent of votes cast. To investigate this initiative’s failure at the ballot, we analyzed zip code-level voting patterns and demographic data. Relying on a two-step LASSO (Least Absolute Shrinkage and Selection Operator) + OLS (Ordinary Least Squares) procedure, our results suggest that the framing of revenue-neutrality did not sufficiently satisfy moderate right-leaning voters regarding perceived costs of the carbon tax. We also found evidence suggesting not only that some voting segments may have opposed revenue-neutrality, but that those facing higher climate change risk did not appear to see the initiative’s value net of expected costs.
Highlights
In 2016, Washington State voters rejected a carbon tax initiative, and it is not clear why
In assessing this apparent misalignment, we considered the literature that helps us differentiate between public interest, private interest, and ideology theories of regulation as they might apply to direct democracy
Initiative 732, presented to Washington voters in the 2016 election cycle, was intended “to encourage sustainable economic growth with a phased-in one percentage point reduction of the state sales tax, a reduction of the business and occupation tax on manufacturing, and the implementation and enhancement of the existing working families’ sales tax exemption for qualifying low-income persons, all funded by a phased-in carbon pollution tax on fossil fuels sold or used in this state and on the consumption or generation in this state of electricity generated by the consumption of fossil fuels” [5]
Summary
In 2016, Washington State voters rejected a carbon tax initiative, and it is not clear why. Partisan trends in the state might have led the casual observer to expect passage of Initiative 732—a revenue-neutral state carbon tax promising to combat climate change—but Washington voters rejected the initiative by 58.9 percent, according to the Washington Secretary of State [3]. In assessing this apparent misalignment, we considered the literature that helps us differentiate between public interest, private interest, and ideology theories of regulation (including Pigouvian taxes as regulatory instruments) as they might apply to direct democracy. We interpret significant OLS results, discuss their implications, and conclude with a view of follow-up research, and perhaps future carbon tax referenda
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