An anticipated legislative proposal by Washington Gov. Jay Inslee could result in consumers paying more at the gas pump to help reduce greenhouse gas emissions.
Inslee is expected to request legislation to put a cost on carbon, which could take the form of a carbon-emissions tax or a cap-and-trade system.
An initial look at how that could affect gas prices was discussed at a meeting of the state Senate Energy, Environment and Telecommunications Committee in Pasco last week. About half the state’s emissions come from transportation.
The look at possible gas prices did not reflect a proposal from the governor or the governor’s Carbon Emissions Reduction Task Force, but was an initial computer modeling run to get views on what additional analysis would be useful, according to the governor’s office.
To meet state goals on emission reductions based solely on price, a $12 per metric ton tax would need to be imposed on emissions in 2016, which would need to increase by $8 per ton annually, according to one scenario modeled by the state.
If passed on to consumers, that could increase gasoline prices by 44 cents per gallon by 2020 and $1.46 per gallon by 2035.
Using a lower tax of $12 per metric ton to start and then a 60 cents per ton increase annually for the next four years and $2 per year after that would not meet carbon reduction goals. The goal set by state law is the reduction of emissions by 2035 to 25 percent below those of 1990.
The lower tax would result in a smaller increase for consumers at the pump — possibly 13 cents a gallon in 2020 and 38 cents a gallon by 2035.
The Legislature would decide how to spend the money collected. But one possibility would be to spend 30 percent for lower-income populations through a working families tax credit, 15 percent through business tax cuts for those harmed by the carbon tax, 10 percent on renewable energy programs and 5 percent on program administration, said Matt Steuerwalt, the governor’s executive director of policy.
The remaining 40 percent could be spent on transportation construction, which would create jobs, he said.
Officials also have been asked if the money generated could be used for K-12 education, he said.
Sen. Jim Honeyford, R-Sunnyside, said more information is needed on how the tax would affect particular populations, such as the retired.
“I want to get this down personal to people who will be footing the bill,” he said.
The proposed tax would have a large impact on certain areas of the state, particularly rural areas, said Sen. Tim Sheldon, D-Potlatch.
Although the Legislature could use some of the money collected by a carbon tax to “make whole” industries harmed by the tax, industries could leave the state rather than depend on the Legislature agreeing to allocate tax collections that way each session, said Sen. Doug Erickson, the Republican chairman of the Senate energy committee.
The governor is interested in preventing further impacts from greenhouse gases, positioning the state to be a leader in energy innovation and providing leadership in reduction of carbon emissions, Steuerwalt said.
“We are not starting first,” he said. About a quarter of the world’s emissions have a price on carbon and another quarter has authorized that for the future, he said.
The governor’s Carbon Emissions Reduction Task Force has been asked to consider measures to offset costs to consumers and businesses and to design strategies to help energy-intensive industries transition from carbon-based energy sources.
A draft report from the task force is due Oct. 28 and a final report is due Nov. 17.