TVW Update

Carbon task force issues report on cap-and-trade and carbon tax approaches

A task force convened by Gov. Jay Inslee to help craft a carbon pricing policy released a report on Monday that examines both a cap-and-trade system and a carbon tax, although the group stopped short of making a policy recommendation.

The cap-and-trade approach sets a cap on the total amount of carbon that can be emitted during a specific time period. A fixed number of emissions “allowances” would be issued, and those allowances could be traded or auctioned off.

A carbon tax sets a price on each unit of carbon that’s emitted, with the price typically set in advance.

The task force said in its report that both strategies can “help the state build a coherent carbon emissions reduction strategy that aligns private incentives” to reach the state’s goal of reducing greenhouse gases below 1990 levels by the end of the decade.

However, the group cautioned that there are “substantial design challenges” in developing a policy.

Inslee talked about the report later in the day at a South Seattle community meeting about air quality.

“This morning, my task force gave me a report on a way to move forward to cap the amount of carbon and put a price for polluters to pollute our air and to me it makes sense that polluters who pollute our air ought not to be able to do that for free in unlimited quantities,” Inslee said.

“I’m excited to tell you we are going to be pursuing this in the next year in the state of Washington,” he said.

The task force wrote in the report that carbon prices should be established in a way that will “limit volatility and provide long-term certainty,” and take into consideration the impact it will have on businesses. The report also notes that the policy should “address equity and affordability concerns” for low-income and minority communities.

The transportation sector is the largest source of carbon emissions in the state, according to the report.

“With an explicit cost placed on carbon, the price of transportation fuel will increase,” it said.

The group recommends a comprehensive policy that addresses transportation-related issues, such as incentivizing the use of low or zero emission vehicles, expanding public transit and building alternative fuel infrastructure.

The task force concluded by saying that “certain important questions remain unanswered and further analysis will be important” to crafting a carbon pricing approach.

Read the full report here.

The 21-member group included representatives from business, labor, public health, tribal and government entities. The task force met half a dozen times throughout the year to draft the report.

The report will serve as an “important foundation” in developing a policy, Inslee wrote in a reponse letter to the report. “I understand your finding that each of the policy approaches under consideration offers strengths and weaknesses for Washington, and that market based approaches can make a unique contribution to reaching our statutory carbon emissions limits,” Inslee wrote.

Watch Monday’s carbon task force meeting below:

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