The first-ever U.S. fee on carbon is defeated, and Big Oil might be to blame

Washington voters have likely defeated what would have been the United States’ first-ever fee on carbon pollution.

Although votes are still being counted, on Tuesday night The Seattle Times reported that after officials tallied nearly 2 million votes from all the state’s precincts, 56 percent of voters opposed Initiative 1631 — the Carbon Emissions Fee Measure — which makes it exceedingly unlikely the law will pass. 

If it did pass, the fee would have raised an estimated $2.3 billion in its first five years by leveling a fee on the state’s largest carbon emitters.

The defeated proposition faced unprecedented financial opposition from Big Oil, which organized a formidable campaign sponsored by the Western States Petroleum Association, an influential petroleum trade group.

The measure would have put “a price on pollution and invests revenue in solutions,” Becky Kelley, president of the Washington Environmental Council who helped draft the initiative, said in an interview.

“It often gets called a tax, but it is a different tool and we chose that tool on purpose,” said Kelley.

Specifically, 1631 would have charged oil and gas companies for the carbon content of fossils fuels sold or used in Washington. 

In turn, the fees would create a sizeable fund to construct clean-energy infrastructure and public transit, while also mitigating the consequences of extreme weather events like droughts and wildfires exacerbated by global warming.

Yet, the the “No on 1631” campaign, sponsored by the Big Oil, was able to blanket the state in oppositional advertisements. The group received $31 million in contributions, largely from oil companies. British Petroleum and Phillips 66 led the way, contributing around $13 million and $7 million, respectively. 

“The existential threat to their business model is [that] we are going to invest in building out cleaner alternatives so we don’t have to buy their dirty product,” Kelley said before the votes were counted. 

“I think that’s what they’re most afraid of.”  

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Meanwhile, the campaign in support of 1631 also received significant infusions of $15 million, though just half that of the petroleum-led campaign. 

“The stakes are very high for everybody,” Aseem Prakash, a political science professor and director of the Center for Environmental Politics at the University of Washington, said in an interview.  

But voters, especially in rural areas, generally dislike the idea of fees and taxes. 

Indeed, the fee is on large oil companies, but there’s understandable concern that costs will be passed down to the consumer paying for electricity or filling up their tanks. That could mean an estimated 13 more cents per gallon of gasoline at the pump, according to a study funded by the Western States Petroleum Association.

“The word tax scares people,” said Prakash.

But, although some make the reasonable argument that a fee is a form of tax, this carbon fee would have worked differently than a typical sales or income tax. The tax wouldn’t go into the general state coffers.

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