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Gas Tax Proposed for California Would Change Existing Climate Law

, KQED Science | February 20, 2014 | 12 Comments
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Under California climate law, gas prices are likely to rise in 2015. (Craig Miller/KQED)

Under California climate law, gas prices are likely to rise next year. (Craig Miller/KQED)

State Senator Darrell Steinberg is proposing a carbon tax on gasoline that would put a price on the pollution that causes climate change. The plan would also preempt a key piece of California’s existing climate law, due to kick in next year.

The state’s cap-and-trade program, created by the Global Warming Solutions Act of 2006, puts a limit on how much companies in California can pollute by pumping out greenhouse gases. Right now, it only applies to factories, refineries and other industrial polluters.

Next year for the first time, transportation fuels will come under the program: oil companies will have to account for the emissions from Californians’ cars and trucks. The cost of buying additional pollution permits is one that companies are almost certain to pass along to consumers.

‘For climate policy to work, it has to sting. I am concerned about who we sting.’

Steinberg’s plan would make it more direct, as a tax that we pay at the pump. His reasoning is that while drivers will pay more for gas either way, with a tax the increase is more predictable and transparent.

“Under my proposal, the price of carbon fuel is projected to rise gradually and predictably,” Steinberg explained in a speech at the Sacramento Press Club on Thursday.

The Sacramento Democrat says his plan would also ensure that low-income Californians aren’t inordinately burdened by higher taxes, by building in an earned income tax credit.

“Putting a price on carbon fuels is essential to salvaging our environment. For climate policy to work, it has to sting,” he said. “I am concerned about who we sting.”

“What people in California also need is pollution cuts,” said Tim O’Connor, director of the Environmental Defense Fund’s California Climate Initiative. He said that while he supports some of the ideas behind Steinberg’s proposal, he’s concerned it could undermine California’s efforts to charge for the right to pollute, and to reduce greenhouse emissions overall.

Cap-and-trade does both, by introducing a cap on emissions and then methodically lowering it, and by allowing companies to buy and trade pollution permits. The program launched in 2012.

Opting for a tax instead of the market-based program might have been a good idea, said Severin Borenstein, an energy economist at University of California, Berkeley, but at this point, California is too invested in cap-and-trade. “The program is already running,” he said. “The fuels coming in in 2015 is already something that has been very much accounted for and vetted, and it would take a huge change in the program to now take fuels back out of the cap.”

The Western States Petroleum Association, an industry group, welcomed Steinberg’s proposal in a statement. “By acknowledging that the state’s cap-and-trade regulations for fuels are about to have a significant impact on the cost of fuel for consumers, Sen. Steinberg has proposed a transparent carbon tax as an alternative.”

Steinberg’s bill would need a two-thirds majority to pass.

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Category: Climate, Energy, News

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About the Author ()

Molly Samuel joined KQED as an intern in 2007, and since then has worked here as a reporter, producer, director and blogger. Before becoming KQED Science’s Multimedia Producer, she was a producer for Climate Watch. Molly has also reported for NPR, KALW and High Country News, and has produced audio stories for The Encyclopedia of Life and the Oakland Museum of California. She was a fellow with the Middlebury Fellowships in Environmental Journalism and a journalist-in-residence at the National Evolutionary Synthesis Center. Molly has a degree in Ancient Greek from Oberlin College and is a co-founder of the record label True Panther Sounds.
  • CharliePeters

    Audit the fed

  • OwenRay

    I’m glad we found another way for Californians to pay even more for gas. As if getting gouged by fuel companies wasn’t bad enough.

    • paddyomalley

      Californians pay more for gas because they have to have a special blend of “California Gas”–I guess you think Chevron is Starbucks–and you don’t pump enough oil, less than you did in the 1970′s, to sustain your illegal population and you certainly don’t refine any more than you did in the early seventies, either. Of course you also voted a $0.15 per gallon tax on yourselves in 1992 or 1993. Face it, you’re stupid and then you cry about YOUR stupidity. But go ahead and blame the oil companies: It is fitting for a group of people who tax and tax so they can spend and spend.

  • Anthony Pickel

    The Democrats Proposing Higher Gas Taxes are out of touch with Reality ………. taxes are High Enough in California…………… Cap and Trade is a Fraud against working people………….. Democrats in California have figured out a way to Tax everything in the State much more than other States…………these Guys are Criminals ……………..

  • Steve Braden

    It may be past time for a “Ukraine” like event against this Calif. progressive trash

  • Ed Mang

    Are you freaking kidding me. These democrates are so screwed up, and especially Steinberg, what a punk.

  • NorCal Native

    Steinberg is the type of thug that ignites revolutions.

  • GoldBeachBiker

    The weather is just fine in your neighbor state to the north.

  • hcat

    This carbon tax is so much more sensible than a cap and trade program. And apparently Steinberg has had the decency to include an EITC in it, which is absolutely necessary. I switched my registration to the Democrats because the Republicans wouldn’t support this.

  • http://www.planetizen.com/user/403 IrvinDawid

    Who would have thought that I would find myself in agreement with the oil industry over the Environmental Defense Fund?????

    From the article:
    “The Western States Petroleum Association, an industry group, welcomed Steinberg’s proposal in a statement. “By acknowledging that the state’s cap-and-trade regulations for fuels are about to have a significant impact on the cost of fuel for consumers, Sen. Steinberg has proposed a transparent carbon tax as an alternative.”

    AGREED!

    What is disappointing is seeing that EDF is more wedded to carbon trading than it is to carbon reduction:

    “What people in California also need is pollution cuts,” said Tim O’Connor, director of theEnvironmental Defense Fund’s California Climate Initiative. He said that while he supports some of the ideas behind Steinberg’s proposal, he’s concerned it could undermine California’s efforts to charge for the right to pollute, and to reduce greenhouse emissions overall.”

    Thanks, Molly, for getting quotes from both organizations. It just goes to show that each situation is unique, and sometimes “the polluters” understand the situation better than the environmentalists!!

  • Frank MacLeod

    This just more of Sacramento’s war on the middle class, and more blatantly their war on rural Californians.

    Wehave to travel greater distances for goods and services….and often to our jobs. We don’t have the luxury of having taxpayer funded mass transit. Many of us live in areas that out of range of electric cars, and inaccessible to many hybrids that were designed only for urban roadways. We pay the bulk of fuel taxes in the state while NOT contributing to the urban smog. They charge us a “CalFire Fee”, ostensibly for rural fire prevention services, that they just stick in the general fund and spend as they please.

    On a similar note, and in today’s economy, how many of the low-income
    families they claim to care about can even afford to buy a new, supposedly energy efficient, vehicle in order to avoid paying higher fuel taxes?

    Bottom line is, that the Democratic party in California cares ONLY about those who live in the large urban centers which are the bases for their support. They care nothing about those who live in rural areas…which is why we don’t care for them either. If they had their way, we would all live in huge metropolises under the thumb of and increasingly dependent on government.

  • paddyomalley

    What climate change? You are going to alter the ocean currents to change weather? Good Luck.