The California state government on Friday finalized the nation’s first statewide gas tax to be implemented since 2009, making California the nation´s first to fully fund a statewide carbon tax, in a move that will help ease pressure on the state to meet its commitments under the Paris Agreement on climate change.
The measure will take effect July 1, 2018, with the gas tax, which is currently set at 2 cents per gallon, set to rise to 3.75 cents per year.
It will cost $1.30 per gallon next year, up from the current 2.75 cent rate.
“Today, California becomes the first state in the nation to fully implement the most ambitious climate plan ever,” Gov.
Gavin Newsom said in a statement.
The carbon tax has been touted as the best approach to addressing climate change and the cheapest way to meet the state´s 2020 greenhouse gas reduction targets under the accord, which was reached in Paris last year.
But the tax, estimated to cost $4 billion a year by 2030, has faced opposition from California´s largest utility, the Southern California Edison Co. (SCE), which has argued that it will increase prices for consumers and put a burden on businesses.
The state is set to become the largest consumer of natural gas in the country by 2030.
“It is vital that the California gas tax be used wisely,” SCE President and CEO Tom Kalm said in the statement.
“This tax will make the state more competitive in the global marketplace and will help reduce our dependence on foreign energy supplies, which will benefit all Californians.”
The move comes as the state faces another severe drought, which has cut electricity use by 40 percent since January, and which has forced the cancellation of some schools and other infrastructure.