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Californians and the Carbon Tax

Mark Baldassare July 31, 2014

California is leading efforts to address climate change, and public support for state action on this policy has been strong and steadfast. In the July PPIC Survey, six in 10 likely voters say that global warming’s effects have already begun and favor the state’s requirements that greenhouse gas emissions be reduced to 1990 levels by 2020.

The landmark law laying out these efforts—AB 32—relies on a “cap-and-trade” program for companies to reduce their greenhouse gas emissions. The state government currently enforces emissions “caps” by issuing permits that can be “traded” among companies at quarterly auctions. The state is getting ready for the AB 32 legislation to impact transportation fuels in 2015, with costs—which are unknown—likely passed on to Californians at the gas pump. Under these circumstances, some policymakers are having second thoughts about the cap-and trade program and are reconsidering a carbon tax on companies for their greenhouse gas emissions.

In our polling over the past five years, Californians have been more likely to express support for a carbon tax than a cap-and-trade system. In the July PPIC Survey, 54 percent of likely voters favor a carbon tax on companies’ greenhouse gas emissions—identical to the support that we found in July 2009. By comparison, 43 percent of likely voters favor the current cap-and-trade system when read a description in the July PPIC Survey—similar to the 44 percent who supported this proposal in July 2009. This support for a carbon tax doesn’t appear to be a simple reflection of a desire to tax business. A carbon tax on companies is a more popular proposal than raising overall state taxes paid by California corporations, which had a mixed response (48% favor, 47% oppose) in the March PPIC Survey.

What are the attitudes underlying majority support for a carbon tax on companies? Most likely voters are concerned about global warming and want the government to take action. Those who express the most concern and support tend to favor a carbon tax over the cap-and-trade system. For example:

  • Of those who believe the effects of global warming have already begun, 75 percent favor a carbon tax and 56 percent favor the cap-and-trade system.
  • Of those who believe that global warming is a very serious threat to the state’s economy and quality of life, 78 percent favor a carbon tax and 55 percent favor the cap-and-trade system.
  • Of those who favor the state law to reduce greenhouse gas emissions to 1990 levels by 2020, 76 percent favor a carbon tax and 57 percent favor the cap-and-trade system.

There is also a political dimension, reflecting the partisan differences in levels of concern about climate change and support for state action. Democrats are more likely to favor a carbon tax (72%) than a cap-and-trade system (54%), with similar trends for independents (56% carbon tax, 42% cap-and-trade). Republicans show similarly low support for either approach (32% carbon tax, 27% cap- and-trade).

The July PPIC survey also found that potential consumer costs play a striking role in views of climate change policies. Among likely voters, 70 percent, favor requiring oil companies to produce transportation fuels with lower emissions; however, favor for this policy declines to 41 percent if it means an increase in gas prices. What is noteworthy is that most higher-income Californians support lowering emissions—even if gas prices rise. In light of California’s uneven economic recovery, this finding suggests that the state lawmakers should be focusing on ways to limit the financial impacts of new global warming regulations on the state’s less affluent residents, not abandoning current efforts to reduce greenhouse gas emissions that enjoy solid support.

If policymakers are going to debate the pros and cons of these two policy options, it would be worth taking the time to better explain them to the state’s residents—especially since gas prices could increase with either option. Most likely voters have heard only a little or nothing at all about these competing proposals for reducing greenhouse gas emissions. One in four likely voters say they have heard a lot about the cap-and-trade system (24%) and awareness is similarly low for the carbon tax (28%) in the July PPIC Survey. Californians care about climate change and would likely welcome the chance to learn more about the decisions that are being made today to address the challenges of the future.

News and analysis of California policy issues from PPIC

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