Rampell: Washington rejected Green Wave; will it come ashore?

Alas, Washington’s ballot measure failed spectacularly last week, receiving less than 44 percent of the vote. This was, in fact, the third time in two years that a carbon tax was rejected in the state; earlier this year, the Legislature failed to pass a similar proposal and, in 2016, another ballot measure bombed.

There’s been some debate about what went wrong. The state is not exactly a bastion of conservatism, after all.

Maybe voters, bombarded with anti-tax propaganda for years, have soured on tax increases of any kind. In fact, in the decade before 2018, voters nationwide approved half of tax-increasing state ballot measures, according to Brookings Institution fellow Vanessa Williamson; last week, they approved only a handful.

This measure in particular also attracted an onslaught of negative advertising. A campaign organized by the Western States Petroleum Association raised $31 million.

Lessons to be learned

There’s a fair amount of consensus about what makes a carbon tax well-designed from an economic efficiency perspective: It should be broad-based, collected upstream rather than at the retail level (though at least some of the tax will get passed through to consumers through higher prices), etc.

The harder question has to do with what makes sense from a political economy perspective — including, what you do with the new money you collect.

Washington’s plan would have used the estimated $1 billion it raised annually by 2023 on new spending projects, generally related to environmental initiatives. Decisions on that spending would have been made by a governor-appointed board and utilities.

Which means proponents were basically telling voters that everyone would pay more money now and maybe get something in the future. A simpler, more compelling design might have been to simply rebate the money directly to households on a lump-sum, per-capita basis.

This would have had the virtue of being progressive. Low-income households tend to spend less than average in absolute dollar terms on carbon-intensive purchases, yet they would get the same rebate check amount as everyone else.

Washington was also in a bind because, well, one state going it alone on a pollution fee is not likely to put a dent in climate change. “There’s no real rationale for why global warming should be addressed primarily at a local level,” Williamson said. “The scale and scope are wrong there.”

Asking a state’s residents to take on climate-change policy might seem like an easier lift than pursuing a federal policy (and, true, California does have its solo cap-and-trade system). But if voters perceive a carbon tax as mostly symbolic, they might be less willing to absorb the associated pain.

Still, with inaction at the federal level, maybe a single state paving the way is our best hope for catalyzing broader action. Someone needs to lead. With lessons learned from this most recent failure, and more Democratic seats picked up in the Legislature, Inslee may yet be proved right in casting Washington as that leader.