Washington State Readies Carbon Tax Push
(Axios) Washington Gov. Jay Inslee, a Democrat, will unveil a carbon tax proposal in his address to the state Tuesday, local media reported Thursday.
Why it matters outside of that Washington: The debate, while unique to the Evergreen State, is also emblematic of the struggles any effort to push a federal carbon would face. Washington state voters opposed a ballot measure that would have created a carbon tax in 2016. That effort failed partly due to disagreements among environmental groups and others about what to do with the revenue raised from a tax: return it to taxpayers or use it to fund specific policy priorities. That’s a question sure to drive any national carbon tax debate.
He indicated he’s not going to push a policy that returns revenue to directly taxpayers: “The people feel if they’re going to make an investment in a revenue source, they want to see some action.” READ MORE
Excerpts from Seattle Times: Inslee’s proposal would levy a $20-a-ton price on carbon emissions, said Reed Schuler, an Inslee policy adviser. That price would rise over time.
The billions of dollars raised would support clean-energy projects, work to improve floodwater management and reduce risks of wildfires, and assistance to offset the tax’s impact on low-income communities.
The state would start collecting the revenue in the 2020 budget year, with $726 million generated that year. The tax would raise a total of $3.3 billion over four years.
The governor first mentioned a carbon tax in the proposed supplemental budget he rolled out last month. In that plan, he said $950 million would go toward replenishing budget reserves he proposed spending on K-12 education, to satisfy the Washington Supreme Court order called the McCleary decision.
With the tax, residential natural-gas prices could increase about 10 percent in 2020, and gasoline prices could rise between 6 and 9 percent, said Lauren McCloy, a policy adviser for Inslee.
This cap-and-trade approach was initially favored by Inslee in a 2014 proposal that he tried unsuccessfully to get through Legislature.
Since then, he has shifted his strategy to favor a tax, which is the approach taken by British Columbia back in 2008. That tax has now reached $30 Canadian dollars per ton of carbon emissions.
Sen. Christine Rolfes, D-Bainbridge Island, recently said she is open to the idea of a carbon tax. But Rolfes said she would be concerned about any proposal that “translated into a significant gas tax,” since lawmakers hiked the gas tax in 2015.
The tax is intended to create a price signal that steers consumers — including businesses — away from fossil fuels. It would rise by 3.5 percent each year above the rate of the inflation.
Aircraft and agricultural fuels are among the products shielded from the tax. Some trade-exposed, energy-intensive industries also would be exempted.
Utilities also would have an option to invest in projects to reduce carbon emissions that could qualify for tax credits. That has helped the bill gain support from Puget Sound Energy, the state’s largest private utility.
More than a dozen Democratic House members have signed on to another proposal, HB 2338, that would reduce the carbon content of transportation fuel.