Is There a Carbon Tax in the Atmosphere?

Expect low-carbon fuel standards and a carbon tax to be on the agenda when the State Legislature convenes in January. These and other greenhouse gas-related proposals got a boost from Gov. Inslee on two fronts recently:

•    The Climate Legislative and Executive Workgroup (CLEW) created by legislation proposed by Gov. Inslee released its draft report that included a recommended menu of actions and policies the state could take to reduce greenhouse gases. Among the options CLEW presents are a carbon tax a cap-and-trade program and low-carbon fuel standards. (Draft CLEW report here.)

•    Gov. Inslee signed a new agreement with leaders of California Oregon and British Columbia that promises to enact certain greenhouse-gas policies such as cap-and-trade a carbon tax and low-carbon fuel standards. (Press release here.)

Neither of these actions actually creates new policies; they are more suggestions of what the state could do regarding greenhouse gases. In any event these are strong indications of upcoming legislative battles.

AGC is closely following these events. Major policy changes such as a carbon tax would obviously have major ramifications on the economy as a whole and therefore the construction industry.

Some of the policies under discussion affect the industry more directly. For example the low-carbon fuel standard policy could significantly increase vehicle and equipment maintenance costs and/or necessitate investments in new vehicles and equipment. The low-carbon fuel standard the carbon tax and other policies could drive up gas prices considerably which would in turn drain transportation-construction funding generated by the gas tax.

CLEW must make its final report to the Legislature by Dec. 31 2013. Its charge is to present a slate of options the state could take to help achieve its legislatively mandated greenhouse-gas reduction goals (by 2050 reduce overall emissions to 50% below 1990 levels) based on policies that have been tried in other areas. CLEW’s draft report presents these options:

•    Carbon tax
•    Cap-and-trade program
•    Low-carbon fuel standard
•    Zero-emission vehicle mandate
•    5% renewable-fuel standard
•    Public-benefit fund (a policy mechanism intended to provide long-term stable funding to support a variety of energy-related programs)
•    Property-assessed clean energy (a loan mechanism to property owners for the deployment of energy-efficient technologies and renewable energy at residential commercial and industrial facilities)
•    Appliance standards
•    Feed-in-tariff (a policy mechanism designed to accelerate investment in and deployment of renewable energy technologies by offering long-term contracts with a set price to renewable-energy producers)

For more information contact AGC Communications Director and Lobbyist Jerry VanderWood 206.284.0061.