Inslee was responding to a ruling by the Washington State Supreme Court that voted 5-4 earlier in the day to reinstate a severely limited version of his plan to cap carbon pollution in the state.
The court partially invalidated the state's Department of Ecology's 2016 Clean Air Rule, saying that clean air standards cannot apply to "indirect emitters" that do not make their own emissions, such as fuel distributors and natural-gas companies.
The Department of Ecology only has the authority to regulate "actual emitters" who burn the fuel, the court said.
Inslee argued that the ruling would significantly affect the state's ability to cut emissions.
"This underscores the need for legislative action this year to combat climate change. I am optimistic we will see such legislation make it to my desk this session," he said in a statement.
"Our state will not give up on its commitment to the preservation of our environment, nor our message to the politicians in the other Washington: Action on climate change cannot wait," he said.
Washington has vowed to cut emissions by 20 million metric tons by 2035, but Inslee said Tuesday that the state is still 30 percent short of its 2035 statutory requirement of having emissions drop 25 percent below 1990 levels.
He urged the lawmakers to approve the Clean Fuel Standard to cut the emissions, nearly half of which come from transportation.
A recent survey by the Department of Ecology showed transportation emissions accounted for 45 percent of the state's total, with aviation fuels representing about 9.5 percent.