Who Joined the Pigou Club? A Postmortem Analysis of Washington State’s Carbon Tax Initiative I-732∗

I document voting behavior in Washington State’s revenue-neutral carbon tax referendum of November 2016. The initiative (I-732) would have taxed carbon emissions from fossil fuels while simultaneously lowering the retail sales tax and certain manufacturing taxes and matching the federal Earned Income Tax Credit. Voters rejected I-732 with 41% voting for and 59% against. Precinct-level vote shares imply twothirds support among Democratic voters and near-zero support among Republican voters, and the partisan vote alone explains 87% of the variation across precincts. Yet party is not everything, as incidence, identity, information, and ideology are all correlated with support for I-732. Support is weaker in precincts with larger shares of car commuters, bigger homes, and workers in carbon-intensive industries and stronger in precincts with larger shares of young people, racial and ethnic minorities, collegeeducated adults, and voters that are ideologically aligned with the left’s broader policy agenda. Out-of-sample forecasts imply that no other state would have passed I-732. Polling data suggest that framing the policy in terms of “fighting climate change” likely gained many Democrats but lost many Republicans. Less clear is the role played by elites: while many elected officials in the Democratic party supported I-732, the state Democratic party and leading environmental groups were all opposed. Overall, these results highlight a strategic fork in the road for politically feasible climate regulation: attract moderates through a revenue-neutral carbon tax, or veer left by directing tax revenue to projects that Democrats like. JEL classification numbers: D72, H23, H71, H72, Q52, Q54, Q58