Steinberg proposal would throw monkey wrench into cap and trade

by Brian Leubitz

Cap and trade is far from perfect. And if you ask many economists, you’d find a carbon tax as a solid alternative. However, a muddy mix of the two? Well, that raises more questions than it answers.

And, so we have Sen. Steinberg’s proposal:

Next year for the first time, transportation fuels will come under the program: oil companies will have to account for the emissions from Californians’ cars and trucks. The cost of buying additional pollution permits is one that companies are almost certain to pass along to consumers.

Steinberg’s plan would make it more direct, as a tax that we pay at the pump. His reasoning is that while drivers will pay more for gas either way, with a tax the increase is more predictable and transparent.

“What people in California also need is pollution cuts,” said Tim O’Connor, director of the Environmental Defense Fund’s California Climate Initiative. He said that while he supports some of the ideas behind Steinberg’s proposal, he’s concerned it could undermine California’s efforts to charge for the right to pollute, and to reduce greenhouse emissions overall. (KQED / Molly Samuel)

The bill seems far from complete, and will likely get a lot of revisions. But, today is the deadline for bills to be filed, and so here we have something. Now, generally when the Western States Petroleum Association is happy, as they have said they are eager to listen to these changes, it should draw attention.

Whether these changes would go anywhere involves a lot of questions for a system that was just about to start in earnest next year. This will surely change, but environmentalists will want to keep a keen eye on this bill.