All eyes are on Washington, D.C today in the aftermath of the American midterm election as Democrats have clinched control of the House of Representatives. While most coverage has focused on the candidates, voters last night also weighed in on a flurry of ballot initiatives-- from oil and gas development in Colorado to marijuana in Michigan.
While a ballot measure in Montana can feel remote and insignificant to you, these ballot measures can be of massive importance as they shape state legislature, give an insight into shifting national sentiments, and outline corporate capacities and investment practices. This midterm season, over $1bn were spent on ballot measure campaigns-- the average total raised by a successful presidential bid.
Here's our break down of the most important ballot measures and why they’re important to you:
Washington, Initiative 161: NO
Washington state’s carbon tax measure failed with 56.3% of voters squashing the environmental proposal. Initiative 161 sought to impose a fee on businesses within Washington based on the carbon content of the fossil fuels they consume. The proposal was to tax $15 per tonne of carbon dioxide emissions starting in 2020, the fee rising by $2 every year until the state met its greenhouse gas reduction target.
While the initiative was rejected it is notable as the first carbon tax brought to the polls in the US and also as a potential indicator that similar measures will be featured on more ballots in the future
Colorado, Proposition 112: NO
By far one of the nation’s priciest ballot measure campaigns, Prop 112, seeking to limit oil and gas development in the state, raised almost $39mln in campaign finance contribution-- $37.8mln of which came from large corporate opponents.
The rejection of the measure, with about 57% of the vote, is considered a big win for oil and gas in the region as Prop 112 would have made about 54% of surface land inaccessible to producers. Supporters of the proposition to require new wells be at least 2,500 ft away from areas such as occupied buildings and water sources lament it was crucial for public health and the environment.
Nevada, Question 3: NO
Nevada’s Question 3 would have forced state legislature to establish “an open, competitive retail electric energy market.” The measure, approved back in 2016 but in need of ratification in order for the state’s constitution to be amended, was surprisingly opposed by environmental activists. Nevada’s energy market is currently monopolized by Warren Buffett’s NV Energy and the passing of Question 3 would mark a massive win for aspiring competitors such as casino titan Sheldon Adelson.
While environmental campaigners would normally prefer competition in order to incentivize innovation and a move toward renewables, they actually backed Buffett in this vote. Activists argue NV Energy has actually made significant stride to move toward renewable energy and an open market would be “sending Nevada’s energy market into uncertainty and disarray.”
Question 3 was defeated with about 67% of the vote, an outcome billionaire Buffett spent more than $63mln ensuring and his opponents raised $37mln hoping to prevent. The vote signals that renewable energy companies directly or indirectly involved in Nevada may shift their attention elsewhere.
Florida, Amendment 5: YES
Amendment 5 is the most politically relevant ballot initiative on this list. When passed, this ballot measure restored the right to vote to criminals, excluding murderers and certain sex offenders. Today, there are around 1.5mln eligible individuals in Florida unable to vote because of their criminal records. The amendment’s passing is sure to have tangible consequences in a notorious swing state, one that helped solidify Trump’s presidency and yet only gave him a 100,000 vote margin of victory.
Arizona, Proposition 127: NO
Arizonans strongly rejected Prop 127 yesterday with almost 70% of voters opposing the measure. The proposition would have forced electric companies to acquire a certain percentage of electricity from renewable resources every year-- with the percentage increasing annually.
The sizable majority held by the opposition shows that while the campaign itself gained media attention, voters in Arizona are not quite ready to commit to going green. Oil and gas companies in the state are likely to try and capitalise on this perceived public sentiment to take advantage of the resourceful state.
Montana, Initiative 86: NO
The dismissal of Montana’s Initiative 86 ensures the state will continue opening new hardrock mines, especially for gold, silver and copper. Had the initiative passed, Montana would have had to deny permits for any new hardrock mines unless the plans provided “clear and convincing evidence” that the mine will not perpetually contaminate nearby water sources. Mineral mining in the state, then, remains unscathed and very viable as a sector.
An eye on the overall map is clearly always vital; yet, these ballot initiatives show how much is determined by the fine print on ballots. Investments in these sectors and regions are likely to mirror the results that emerged yesterday.
