Lawmaker Scraps Plan To Replace Carbon Market With Tax On Fuels
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[April 15, 2014]
By Rory Carroll
SACRAMENTO (Reuters) — A top Democratic
lawmaker in California on Monday backed off an unpopular plan to tax
gasoline and diesel fuels and instead proposed a less controversial plan
to spend up to $5 billion a year from the state's fledgling carbon
program on affordable housing and mass transit.
California Senate leader Darrell Steinberg proposed building
affordable housing near transit hubs, repairing state roads and
highways, and helping fund mass transit projects including
Democratic Governor Jerry Brown's beleaguered high-speed rail
His plan also calls for returning a portion of the money collected
by the state from the sale of carbon permits to California's
drivers, who are expected to see gasoline prices jump by about 12
cents a gallon next year when the state's greenhouse gas reduction
program expands to cover distributors of transport fuels.
"Cap-and-trade needs a long-term strategy that maximizes the
efficiency of its revenues as we seek to curb greenhouse gases,"
California caps the amount of emissions allowed each year by
refineries and manufacturers and requires those businesses to obtain
emissions permits at state-run quarterly auctions or on the open
market. The vast majority of the permits in the market were give to
businesses free of charge at the start of the now 16-month-old
program, although the share of free permits handed out will shrink
in the coming years.
Under California state law, any revenue from the cap-and-trade
program must be spent on efforts to further drive down the state's
output of heat-trapping greenhouse gases.
Steinberg's tax on transportation fuels was with resistance from the
environmental community and key lawmakers, who see the state's young
carbon market as a success.
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One key opponent of the carbon tax, Democratic Senator Fran Pavley,
was more receptive of the spending proposal. Pavley is the author of
the state's landmark law that forms the basis for the state's carbon
market and other carbon cutting policies.
"I look forward to working with Senator Steinberg, our colleagues
and other stakeholders as this bill moves forward," she said.
(Editing by Lisa Shumaker)
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