What Washington state, France and Canada have in common: Why carbon tax fails

When principles meet economics, principles lose. That is the lesson coming from three prominent setbacks to policies intended to target climate change. These sobering results remind us how little people are willing to pay for professed principles … and ominously how much government is required in order to make them do so.  

According to a recent Wall Street Journal/NBC Poll, “two-thirds of Americans believe action is needed to address global climate change and a record high 45 percent believe that the problem is serious enough to merit action immediately.” The poll “also found that 52 percent of American adults believe that failing to address climate change would be more economically costly than additional regulations designed to prevent global warming.”

Many in Washington, D.C. would not be surprised at these findings. However, a majority in Washington state would be.  

Just a month ago, Washington state voters handily rejected — by 56 to 44 percent — a ballot initiative to impose a statewide carbon tax. Known as I-1631, it would have levied a first-in-the-nation tax of $15 per metric ton on carbon emissions. Increasing over time, by 2023 it would have raised an estimated $1 billion for renewable energy programs and those afflicted by the tax.  

Washington’s initiative was well-funded. It had the strong support of a liberal coalition in a liberal state that is an epicenter of environmental activism — the Evergreen State of all places.  Its loss marked the second statewide defeat for a carbon tax.

A continent away, a more violent rejection is transpiring. For weeks, France’s yellow vest movement has taken to the streets to protest a transportation fuel tax hike of approximately 25 cents per gallon. The tax’s goal was twofold: Reduce dependence on fossil fuels and fund alternative and renewable fuel investments.  President Macron’s government has already had to suspend its planned implementation due to growing unrest.  

In between America’s left coast and Paris’ left bank uprisings resides Canada’s. There Prime Minister Trudeau’s government faces growing resistance to its planned carbon tax. The plan was to have the provinces institute their own carbon tax, but the reality is many provinces are refusing to do so.   

Notably, the three took different paths to their means — taxes — for their shared goal of climate action. Washington state chose direct referendum. France chose top-down. Canada aims to delegate theirs to local governments. Their only similarity is the resistance faced by each approach.

This shared rejection of different means in different places begs several questions.  

First, if not here, where? These places are ideologically and affluently disposed to accept taxes for climate change proposition. As the WSJ/NBC News poll shows: The general population decidedly accepts that action is needed. And these places are more attuned than America’s general population.  They are, for the most part, particularly associated with environmentalism.

Second, if not this, then how much? These are relatively affluent places by global standards. Assuming for a tax to be effective in changing behavior — as these were intended — then they must have an economic impact.  Unquestionably, these taxes did … only the wrong kind. Yet, taxes set so low as to be acceptable — and there is no guarantee lower taxes would not have also elicited resistance — then there is also the risk behavior would not change either.  

If these taxes in these places — places comparatively more environmentally attuned and economically able — produce such resistance, what will happen in less environmentally attuned and less affluent places?

Better environmental standards are correlated with economic development. The reverse equally holds. How then can such places hope to change behavior following the same course?

The deceptive argument is that such places will need subsidies — a carrot, not a stick — but that is circuitous. If Washington state, France, and Canada refused to pay for their own environmental policy, why would they willingly pay for others’?  

The three rejections also ask fundamental questions:

Philosophically, what are principles if they are not practiced? They become a zen meditation upon the sound of one hand clapping. Or in this case, the conundrum should be: If a tree falls in the forest and everyone hears it, does it still not make a sound?

Politically, it reminds us once again what sort of government is needed to enforce such actions.  Clearly, not democracies. The general population knows its economic interests quite well and insists on them. Instead, it has been authoritarian governments that have insisted on forcing their populations to accept policies counter to their economic interests.  

As a result, such authoritarian governments and their anti-economic and anti-democratic policies have fallen like dominoes over the last two generations.  Economics won then too. And as Washington, France and Canada have learned, it still does.  Principles never stood a chance.

J.T. Young served under President George W. Bush as the director of communications in the Office of Management and Budget and as deputy assistant secretary in legislative affairs for tax and budget at the Treasury Department. He served as a congressional staffer from 1987-2000.