Washington State Carbon TaxConservative and progressive policy wonks agree: a carbon tax is the most promising of all tools to fight climate change. Such a tax would spur investments in green energy and encourage motorists to buy more electric cars. It would minimize the role of regulatory bureaucrats and maximize that of markets. What is not to love about a carbon tax?

The sticking point is what to do with the billions of dollars of revenues such a tax would generate. Conservatives favor using the money for a revenue-neutral tax swap. Lower taxes on capital would encourage investment, lower payroll taxes would encourage welfare recipients to take jobs, lower sales taxes would promote commerce. Progressives favor using the revenue for a combination of green investment and aid to low-income families. But if your overriding goal is to combat climate change, it seems there ought to be some revenue distribution formula that would build a winning coalition.

But maybe not. Washington State voters have now rejected both approaches by wide margins. A 2016 initiative, I-732 would have used carbon tax revenues to cut sales taxes and give tax relief to low-income families.  It lost by a 59 to 41 margin. The 2018 version, I-1631, took the opposite tack, proposing fund investments in clean energy and healthy forests, with a little for low-income families and healthy communities. It was defeated 56 to 44.

Where to go from here? Can further tinkering with revenue distribution push a carbon tax over the top? For example, the Market Choice Act, submitted this year by two Republican House members, proposed using carbon tax revenues to replace the federal gasoline tax and fund infrastructure. Fear of higher gasoline prices by voters in the wide-open spaces of Eastern Washington helped defeat I-1631. Or will we have to wait for more hurricanes and wildfires to wake voters up to the risks of climate change?  

One thing is sure: As David Roberts wrote in an analysis of the I-732 debacle, we have seen the future of climate politics played out in Washington State, and it is not pretty.