Americans in at least seven states voted on energy-related ballot initiatives during the 2018 midterm elections. These measures targeted everything from raising targets for the share of electricity drawn from renewable energy to charging a tax on carbon emissions.
Campaigns to defeat these initiatives related to energy and climate policy, financed heavily by big oil and gas companies and utilities, substantially outspent proponents. They prevailed in nearly every case. At the same time, however, voters elected many politicians who had vowed to take action to reduce the country’s carbon footprint. Those leaders could potentially bring on the same kinds of policies through other means.
Like most environmental economists, I believe that strong policies can help rein in climate change. And, I believe that market-based policies like a carbon tax are the best way to do that. But following the 2018 midterms, it might be the case that advocates of these policies will need to stick to backing politicians who will implement them directly rather than trying to effect change with ballot initiatives.
No national leadership
Since climate change is a global issue, it may seem odd that American states, counties and cities are forging their own policies to address it. In other countries, national authorities typically take the lead on this priority.
But the federal government has failed to address climate change even though the Environmental Protection Agency has effectively been obligated to regulate greenhouse gases for the past decade due to the Supreme Court’s “endangerment” finding that those emissions are pollutants that must be regulated under the Clean Air Act.
After Congress failed in its attempt to pass comprehensive climate legislation during former President Barack Obama’s administration, he bypassed lawmakers and relied on an executive order to establish his Clean Power Plan, which would have regulated carbon dioxide.
But President Donald Trump, who recently said of climate change that he doesn’t “know that it’s manmade” and that he believes it will “change back again,” has basically ended all federal climate action by dismantling the Clean Power Plan and deciding to pull out of the Paris climate deal.
Many states are filling this climate leadership vacuum. California, for example, is committed to becoming completely carbon-neutral by 2045.
But not all states are moving quickly enough in this direction, climate activists fear. Voter-driven initiatives are one solution to this problem. These measures are proliferating based on a simple premise: Perhaps giving citizens a say at the ballot box will force state policymakers and legislators to adopt regulations that can meaningfully and swiftly reduce the greenhouse gas emissions that cause climate change.
As an economist, I see pollution as a classic case of market failure. That is, unless the authorities regulate carbon pollution, the market will produce too much of it. Because that excess pollution will contribute to climate change, it will ultimately end up damaging the economy.
Furthermore, there is also a strong economic argument to be made in favor of policies like Washington’s carbon tax. Some economists call these types of policies “market-based policies,” in contrast to “command-and-control” policies like renewable portfolio standards — state mandates that make utilities get at least a defined proportion of their electricity from renewable energy like solar and wind power.
For a given pollution reduction goal, a market-based policy, economists generally agree, can achieve it at a lower cost than a command-and-control policy can — as long as that the market-based policy is sufficiently strict.
There are two main ways that Massachusetts, New York, and other states are already trying reduce their carbon footprints to correct for this problem. The first is a market-based policy: cap and trade, otherwise known as emissions trading systems. This approach caps the total emissions allowed at a set level and then allocate emissions permits to factories, utilities, and other polluters either for free or through auctions.
The other is through stronger renewable portfolio standards. Once states reach a benchmark, they can set more ambitious goals. When the authorities fail to do that or take other steps to deal with climate change and protect the environment from the risks tied to fossil fuels, one workaround is to have the electorate weigh in.
That doesn’t always work either.
A similar measure did prevail in Nevada. But before it can go into effect, voters will have to approve it a second time in 2020.
Perhaps most notably, voters in Washington declined to make their state the nation’s first to tax carbon dioxide emissions.
This ballot initiative, which would have introduced a carbon “fee,” failed to garner support from a majority of Washington voters. Those voters had rejected another carbon tax measure in 2016 as well.
Not all energy-related taxes flopped. Portland, Oregon’s voters chose to create a new 1% tax on the gross receipts of all large retailers. The revenue it raises will establish a clean energy fund, to be used to meet the city’s emissions reduction goals.
Other efforts to regulate fossil fuels at the ballot box also had mixed results. Florida voters amended their state constitution to ban offshore oil drilling, reinforcing a prohibition already on the state’s books. And Californians bucked an effort to repeal a gas tax hike.
But Coloradans declined a chance to force their state to locate new oil and gas projects at least 2,500 feet from occupied buildings like homes, schools, and hospitals.
What can be more effective than winning specific changes at the ballot box? Electing leaders inclined to make those changes once they’re in office. And several newly elected governors have promised to support policies that will reduce carbon emissions.
Colorado Governor-elect Jared Polis, for example, backs shifting his state to 100% reliance on renewable energy for electricity by 2040. So do many of his peers, including J.B. Pritzker in Illinois, Tony Evers in Wisconsin, Gretchen Whitmer in Michigan, and Stephen Sisolak in Nevada.
Janet Mills in Maine aims to cut her state’s carbon emissions by 80% by 2030. Michelle Lujan Grisham in New Mexico consistently voted for environmental legislation while serving in the House of Representatives.
Change at the federal level may remain elusive for now. But many of the new members of Congress who won their first elections in 2018, including New Yorker Alexandria Ocasio-Cortez, Sean Casten of Illinois, and Virginian Elaine Luria, support phasing out oil, gas, and coal consumption. And the Democratic Party plans to restore a special committee focused on climate change once it formally takes control of the House.
These new lawmakers will be poised to do more about climate change than their predecessors once there is a president who makes it a priority.
Garth Heutel is an associate professor of economics at Georgia State University. This post originally appeared at The Conversation.