5 States Considering a Fuel or Emissions Tax

Samantha Oller, Senior Editor/Fuels, CSP

Pumping gas

CHICAGO -- As the Trump administration decides whether the United States will remain part of the Paris Agreement on climate change, legislators in several states are taking action to tackle greenhouse gases—in particular, through a carbon tax.

Legislators in one West Coast and four Northeast states have introduced bills that would implement carbon taxes, according to The Washington Post. Carbon taxes aim to drive down greenhouse-gas emissions by placing a tax or fee on either fossil-fuel products or emissions, often meaning an increase in gasoline taxes.

If the state proposals are approved, they would join California, where the state Low Carbon Fuel Standard and a cap-and-trade program have already been in operation for the past few years. 

Here are five states weighing a tax on carbon ...

1. Massachusetts

Massachusetts state house

In Massachusetts, two different carbon-pricing bills are before the state House and Senate. Both bills propose a fee starting at $10 per ton of carbon dioxide and rising by $5 a year until it hits a cap of $40 per ton. The two bills have a total of 80 sponsors, or around 40% of the legislature, according to the Washington Post. This is 32 more sponsors than a similar, failed 2015 proposal.

“Last year was an educational opportunity,” Rebecca Morris, communications director at the Massachusetts Campaign for a Clean Energy Future, told the newspaper. “People were still learning about the concept; they were learning about the bill.”

The bill proposed by state Sen. Mike Barrett is revenue-neutral, returning all of the carbon tax’s revenue to residents and businesses. The House bill, proposed by state Rep. Jennifer Benson, would invest 20% of the carbon fee’s revenue in green infrastructure and clean energy.

2. Rhode Island

Rhode Island coastline

In Rhode Island, a house committee recently heard testimony on a bill proposed by Democratic Rep. Aaron Regunberg that would place a $15-per-ton fee on carbon, according to Providence Journal. The tax would be levied on petroleum products at their first point of sale.

The bill contains “trigger language” that would make it only go into effect if the legislation in Massachusetts passes.

As Regunburg told the Washington Post, the language is meant to prevent the state from being at a competitive disadvantage if it were the only one to implement a carbon tax.

“Understanding the strength of those concerns, we included trigger language, and we’ve been working with folks in Massachusetts and Connecticut and other states to try to be pushing this forward together,” he said.

3. Connecticut

Connecticut road sign

The Connecticut General Assembly is considering a carbon-tax bill, Raised Bill No. 7247, that would tax carbon dioxide at a rate of $15 per ton beginning in January 2019, and ratchet up by $5 per ton every year after.

According to reports, it would raise gasoline prices by around 13 cents per gallon (CPG) in its first year of implementation. However, the bill also includes trigger language mandating that it will only take effect if the legislation in nearby Massachusetts and Rhode Island pass with a fee of at least $10 per ton.

4. Vermont

Vermont state flag

Four members of the Vermont House have proposed bills that would implement a carbon tax while at the same time being revenue-neutral, meaning residents would see the money returned to them in some way. This includes through lowering or eliminating other state taxes, or sending residents dividend checks on a regular basis, the state news site VTDigger reports.


5. Washington


In Washington, where a ballot initiative to implement a carbon tax failed during the November 2016 elections, legislators have proposed at least four new bills. One of these—HB 1646—would implement a tax of $15 per ton, which would equate to about a 15 CPG increase on the price of gasoline, the Seattle Times reported. The tax, introduced by state Rep. Joe Fitzgibbon and supported by an alliance of environmental, labor and social-justice groups, would increase at the rate of inflation if emission targets are met; otherwise, it would rise 7% plus inflation per year.

For more on state-level efforts to implement a carbon tax, see the July issue of CSP.