Can Pigou at the Polls Stop US Melting the Poles?
68 Pages Posted: 17 Jun 2019 Last revised: 4 Aug 2019
Date Written: July 31, 2019
Surveys show majority U.S. support for a carbon tax. Yet none has been adopted. Why? We study two failed carbon tax initiatives in Washington State in 2016 and 2018. Using a difference-in-differences approach, we show that Washington's real-world campaigns reduced support by 20 percentage points. Resistance to higher energy prices explains opposition to these policies in the average precinct, while ideology explains 90% of the variation in votes across precincts. Conservatives preferred the 2016 revenue-neutral policy, while liberals preferred the 2018 green-spending policy. Yet we forecast both initiatives would fail in other states, demonstrating that surveys are overly optimistic.
Keywords: pigouvian taxes, carbon taxes, voting behavior, public opinion surveys, state environmental policy
JEL Classification: D72, H23, H71, H72, Q52, Q54, Q58
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