Take 2: Washington State Readies Carbon Tax Bill - Smart Energy Decisions

Energy Efficiency, Regulation  -  February 26, 2018

Take 2: Washington State Readies Carbon Tax Bill

Washington State may be the first to impose a direct tax on carbon emissions. The state’s Senate Ways and Means Committee last week passed a measure that would tax carbon emissions from fossil fuels at the rate of $12 per metric ton on the sale or use of fossil fuels like gasoline and natural gas.

According to a report from the Associated Press, the state Senate has until March 8 to approve the proposal. If enacted, the tax would begin in 2019 and in 2021 would increase by $1.80 per ton each year until 2030 when the rate is expected to hit $30 a ton. The tax is projected to raise $766 million in the first two years and increase to about $988 million in the ensuing two years.

In 2016, Washington state voters rejected a tax on carbon emissions, largely on disagreements about how the money would be spent. The new bill, Senate Bill 6203, is somewhat of a compromise as Washington Gov. Jay Inslee had originally proposed an opening rate of $20 per ton.

The tax exempts more than 60 businesses, such as aviation fuel and fossil fuels used in agriculture. Half of the money raised would be earmarked to support energy projects that reduce greenhouse gas emissions and 20% would be used to address climate resilience through water-related, forest health, wildfire prevention. Monies also would be applied to other natural resources projects as well as provide energy assistance for low-income families, workers in the fossil-fuel industry, and for economic development in rural communities.

According to the Associated Press, if the proposed legislation fails to pass the state Senate, a coalition of environmental, tribal groups and others have said they would bring a carbon initiative to the ballot in November.

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