California lawmaker scraps plan to replace carbon market with tax on fuels

California Senate President Pro Tempore Steinberg speaks to reporters after Governor Brown delivered his State of the State address at the Capitol in SacramentoBy Rory Carroll SACRAMENTO (Reuters) – A top Democratic lawmaker in California on Monday backed off an unpopular plan to tax gasoline and diesel fuels and instead proposed a less controversial plan to spend up to $5 billion a year from the state’s fledgling carbon program on affordable housing and mass transit. California Senate leader Darrell Steinberg proposed building affordable housing near transit hubs, repairing state roads and highways, and helping fund mass transit projects including Democratic Governor Jerry Brown’s beleaguered high-speed rail project. His plan also calls for returning a portion of the money collected by the state from the sale of carbon permits to California’s drivers, who are expected to see gasoline prices jump by about 12 cents a gallon next year when the state’s greenhouse gas reduction program expands to cover distributors of transport fuels. “Cap-and-trade needs a long-term strategy that maximizes the efficiency of its revenues as we seek to curb greenhouse gases,” Steinberg said.

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