Californians gassing up their cars would pay a carbon tax — starting at 15 cents per gallon next year and rising to 43 cents per gallon in 2030 — under a proposal Senate leader Darrell Steinberg introduced Thursday.
He touted the plan as a better alternative to the rising gas prices drivers would otherwise see under California's existing law to reduce greenhouse gas emissions. Under that 2006 law, known as Assembly Bill 32, oil companies will have to buy carbon credits for all the fuel they sell starting next year. Experts expect that will lead to a rise in gas prices that could fluctuate unpredictably.
Steinberg said his plan would provide more stability.
"We must reduce the amount of carbon we put into the air, and that will come with a price.
Nothing is free. A carbon tax is not free and cap and trade is not free," Steinberg said while unveiling the proposal to the Sacramento Press Club.
"Under either, applied to fuel, consumers will undoubtedly pay more at the pump. It may not be popular to say, but that's necessary. Higher prices discourage demand. if carbon pricing doesn't sting, at least a little bit, we won't change our habits."
Steinberg's plan calls for spending the taxes generated — estimated at more than $3 billion in the first year — to improve public transportation and give income tax credits to California families making up to $75,000 a year. That would give about $600 back to the average qualifying household, Steinberg said.
"How many more Californians could we lift from the reach of poverty while healing our climate at the same time?" Steinberg said.
He compared his proposed tax break to the federal Earned Income Tax Credit, which he said has helped millions of poor people.