The low-down on Darrell Steinberg’s carbon tax

California Senate leader Darrell Steinberg unveiled his controversial plans for a carbon tax Thursday in a speech at the Sacramento Press Club.

The idea, which has already been criticized by the Environmental Defense Fund, would essentially exempt transportation fuels from California’s cap-and-trade program and replace it with a carbon tax that motorists would pay at the gas pump. Money raised from the gas tax would go to local public transit projects and tax credits for low and middle-income Californians.

Since gas prices are going to go up no matter what, Steinberg says it is more transparent to tax consumers at the pump rather than via the cap-and-trade program, which is more vulnerable to market manipulation. Steinberg’s plan funnels the proceeds back to consumers in the form of a direct tax rebate.

“Continue Cap and Trade for polluting industrial plants, known as stationary sources,” reads the text of Steinberg’s speech. “But replace Cap and Trade’s current 2015 expansion into the fuel economy with a broader, more stable, and more flexible Carbon Tax of a similar amount on these same fuels.”

San Ramon-based Chevron has been leading an aggressive campaign to delay implementation of California’s Low Carbon Fuel Standard, a cornerstone of the state’s efforts to reduce greenhouse gas emissions. The oil industry would love to see fuels removed from the state’s cap-and-trade program.

And the Western States Petroleum Association, or WSPA, was remarkably upbeat about the proposal, praising Steinberg for “his transparent effort to address the the true cost of California’s climate change policies.  By acknowledging that the state’s cap-and-trade regulations for fuels are about to have a significant impact on the cost of fuel for consumers, Sen. Steinberg has proposed a transparent carbon tax as an alternative.”

It’s mystifying as to why Steinberg, who is termed out in November, is unveiling this idea *now.* There doesn’t appear to be a broad-based coalition of support behind it. And households whose income falls below the federal poverty level pay a larger proportion of their income on gas, so it seems that a gas tax would hurt the state’s poorest residents the most. Brookings has a really interesting study on commuting and the poor.

Some Sacramento insiders who are critical of Steinberg’s idea say it is eerily similar to one that WSPA quietly shopped around the capitol last fall.

“This did not come from WSPA,” said Steinberg staffer Kip Lipper Thursday.  “We’ve had no conversations with WSPA whatsoever. This came from Darrell. The objective is still to put a price on carbon.”

If anyone has WSPA’s PowerPoint on this, I’d love to see it! You can send it to me at

Darrell Steinberg sharing his views about how a carbon tax can addresses both climate change and poverty at the Sacramento Press Club. Photo courtesy of Steinberg’s twitter feed.





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  • sacnewsnet

    I’m self-employed and use my car heavily for my work. Why does Steinberg and the rest of the Taxocrats want to hurt me with a new tax on gas?

  • Dan Kegel

    Got a better link for the speech? That one isn’t working at the moment.

  • Tesla_X

    Typical Liberal.

    Raising taxes on everyone when the economy, employment and growth are all struggling.

    And with the drought in California, major sources of food will soon disappear, driving food prices way up.

    Do these fools think another tax based on Al Gore’s carbon scam will help anyone except the rich?

    Everyone knows the whole carbon thing is just another big money scam!

    Here’s the proof, because 95% of the climate and global warming models are just plain wrong.

    But they still keep repeating the same old lies, and continue to try to tell us a carbon tax will save us.

    Taxes worsen recessions and depressions, but they don’t care, as our leaders still want their green carbon utopia.

    Think of it as America’s Great Leap Foreword…..

    Mao would be proud of our Watermelon Overlords…and is laughing in his grave.

  • Charlie Peters

    California “Wallet Flushing” car tax for the children: DuPont – Tide welfare, but it is for the children!