Dive Brief:

• Washington Gov. Jay Inslee (D) has released details of a proposed carbon tax on emissions generated by transportation fuels and power plants. The tax would be set initially at $20/ton beginning next July, rising annually by an inflation-adjusted 3.5%.
• According to Inslee, the new tax would generate $1.5 billion in new revenue over the first two years, and more than $3 billion over the next four years.
• The revenues would be reinvested in clean energy, transportation programs, water and natural resources resilience and other areas.

Dive Insight:

Washington state has been mulling a carbon tax for years, but Inslee during his State of the State address this week told lawmakers, “It is time to step up."

"We must recognize an existential threat to the health of our state, a threat to the health of our children, and a threat to the health of our businesses that demands action," Inslee said. "That threat is climate change."

Inslee's proposal calls for investing more than three-quarters of the carbon tax in emission-reducing and job-creating programs, including funding for home weatherization, encouraging adoption of electric transportation, and building more clean energy resources.

Under the Governor's proposal, a carbon tax on emissions would lunch at $20/ton beginning July 1, 2019, and could bring in almost $5 billion in the first six years. This is not the first time Inslee has tried to pass a carbon tax.

In 2016, Inslee released budget proposals which included a $25/metric ton carbon tax that would have begun this year to help pay for the state's education system. Voters in the state rejected a carbon tax in the 2016 election, after Republicans in the state pushed back on a proposal in 2015. But there appears to be growing support for a carbon tax in the state's utility industry.

Avista Corp. President Dennis Vermillion said in a statement, released along with details of Inslee's plan, that Washington can do more to clean up its environment and policies.

"Legislation that appropriately balances the interests of our customers, the economy, and the environment can effectively get us there," Vermillion said. " Under the Governor’s proposed climate change legislation, electric and natural gas utilities will have the ability to invest the carbon tax. Avista welcomes the opportunity to work with the Governor and the Legislature."

Puget Sound Energy President and CEO Kimberly Harris issued similar comments, Last fall, the utility set a goal to reduce its carbon footprint 50% by 2040. Inslee’s work "is an important step forward," Harris said. "We look forward to working with the governor, legislators and other interests to make the 2018 session the turning point for Washington state’s energy future.”