Working Paper: NBER ID: w26146
Authors: Soren T. Anderson; Ioana Marinescu; Boris Shor
Abstract: 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: carbon tax; voter preferences; ideology; tax incidence; Washington state
JEL Codes: D72; H23; H71; H72; Q52; Q54; Q58
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Higher personal energy consumption (D19) | Lower support for carbon tax (H29) |
| Campaign exposure (M38) | Overstated survey support for carbon tax (H23) |
| Ideology (P16) | Support for carbon tax (H23) |
| Campaign exposure (M38) | Decreased support for carbon tax (H29) |