NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH
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Can Pigou at the Polls Stop Us Melting the Poles?

Soren T. Anderson, Ioana Marinescu, Boris Shor

NBER Working Paper No. 26146
Issued in August 2019
NBER Program(s):The Environment and Energy Program, The Public Economics Program, The Political Economy Program

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.

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Document Object Identifier (DOI): 10.3386/w26146

 
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