Last week's midterm elections were a mixed bag for environmental policy. Lots of initiatives went down in defeat, though some passed, and some pro-environmental candidates won.
Most notably for us environmental economists, the state of Washington failed to pass a carbon tax initiative, which would have made them the only place in the US where there is such a tax. This defeat comes two years after another carbon tax initiative also failed at the ballot box in Washington.
So carbon taxes are now 0 for 2. Does this mean we should give up on the idea entirely? (Sorry, Pigou) That's basically what's being argued by several policy wonks, including James Temple at the MIT Technology Review, who writes (or at least his headline-writer writes): "People will never vote for a carbon tax, so let's stop asking." Costa Samaras tweets that we'll have to settle for a slew of command-and-control policies rather than carbon pricing.
This seems premature to me. 0 for 2 isn't a great start, but hardly a reason to abandon what economists have known for decades to be the most cost-effective type of environmental policy. Rather than give up on Pigouvian pricing and start arguing for alternative policies based on their ability to be approved (by the way, plenty of command-and-control policies also failed in last week's election), I think we should work even harder trying to convince people of the merits of carbon pricing and other market-based environmental policies.
In case you're wondering, 20 teams have come back from being down 0-2 in an NBA playoff series (the 19 teams listed here plus Cleveland last year in the conference finals). If Lebron can do it, then so can environmental economists!
