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Tyler Cowen

The Carbon Tax Is Dead, Long Live the Carbon Tax

Maybe its failure on the ballot in Washington state will inspire economists to come up with better arguments.

More tax, less smoke.

More tax, less smoke.

Photographer: George Frey/Getty Images North America

Often the most important results of any election come in the initiatives and referendums. And one striking result from Tuesday’s election is that voters in Washington state, a Democratic stronghold, soundly rejected a proposed carbon tax by a margin of 56 to 44 percent. This raises the prospect that the carbon tax may be dead as a policy for the time being, including at the state level. As my Bloomberg Opinion colleague Liam Denning writes: “We can debate the magnitude of the vaunted blue wave, but there was definitely no green wave.”

Like many economists, I have long supported the idea of a carbon tax, and still do. Government has to tax something. So why not tax those activities which generate social costs, in this case through disruptive climate change? It is a very intuitive argument that has persuaded many economists on both sides of the political spectrum.