Alaska Carbon Tax Proposed. Will It Come To Pass?

Governor Bill Walker is making climate change a central focus of his administration. But is an Alaska carbon tax a bridge too far?

As Alaska mulls changes to its climate change action plan, an Alaska carbon tax has been floated as an idea for helping to combat CO2 emissions; as well as to help finance other initiatives on climate action.

A recent draft of the plan states:

“…since Alaska is a state where massive amounts of carbon-based fuel are taken out of the ground, a carbon tax would be levied on far more carbon-based fuel than Alaskans actually consume themselves. This is a potential advantage of a carbon tax that Alaska has over other states and nations.”

A carbon tax has been proposed in other states; though none have yet to actually pass legislation.

What is a Carbon Tax?

Simply put, a carbon tax is a tax (or fee) levied on the amount of carbon in fuels or the output of carbon-based fuels. The energy industry has widely opposed such taxes due to the potentially high cost. The Alaska carbon tax discussed in the released draft does not make clear how, or to what extent such a tax would be imposed.

The oil and gas industry are key sources of employment and revenue for the state of Alaska. Unsurprisingly, they aren’t too thrilled with the prospect of an Alaska carbon tax.

Alaska Carbon Tax: Good Or Bad?

Supporters of the measure argue that the revenue generated could help other climate and infrastructure initiatives. Although the draft does not specify how or where the funds would be directed.

Detractors argue that the tax would cripple the state’s economy by imposing restrictions on one of its largest industries. Oil and gas are also a major employer for the state.

Nothing is set in stone. The Governor’s climate team will continue to research and flesh out the proposal before sending final recommendations.

If a carbon tax were to pass, it would certainly have an impact on the state’s energy sector as well as its employees. Due to its remote location, Alaska can already be an expensive place to live in some regards. If a carbon tax were imposed, it’s possible that for some citizens, it will get even more expensive.

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