County Passes Nation’s First Carbon Tax
Last week the County Council of Montgomery County, MD approved the nation’s first example of a “carbon tax,” intended to decrease greenhouse gas emissions that contribute to global warming. In an 8-1 vote on Wednesday, May 19, the County Council passed a five-dollar-per-ton tax on carbon emitted each calendar year, applying only to entities within the county that produce at least one million tons of carbon annually. Only one such high-carbon emitter exists today in the county: a Mirant Corporation-owned coal plant responsible for three millions tons of carbon emissions every year. Local environmental groups hope the new tax will help reign in pollution from Mirant and reduce the county’s carbon footprint.
Mirant Corporation strongly criticized the County Council’s decision, claiming the locally-based carbon tax would drive away businesses and raise electricity bills for ratepayers. At a public hearing before the council vote, Mirant officials were joined by a group of “Tea Party” anti-tax protesters, who likewise condemned the tax measure. Yet while Tea Party protesters denied the existence of global warming, Mirant officials admitted human activities really are impacting the climate. Thus the faction opposing the tax was seen by many as self-contradictory, while the Tea Party heckling of those testifying in favor of the bill seems to have simply put the opposition in a bad light.
“I’m afraid your testimony and your presence here today have had the opposite effect of what you intended,” Councilmember Duchy Trachtenberg said to the Tea Party protesters, hinting that the anti-tax activists would have been more effective had they behaved in an orderly and respectful manner. Trachtenberg then asked to be put down as a co-sponsor of the carbon tax bill.
Meanwhile activists from Chesapeake Climate Action Network (CCAN) and other local environmental groups testified in favor of the carbon tax. Many expressed optimism that Montgomery County’s efforts to tax carbon would set an example for other local governments, and even for state and national policy. “With this heroic vote in the D.C. suburbs today, the coal lobby might want to prepare for local actions across the country,” said Mike Tidwell, CCAN director. CCAN also expressed satisfaction that half or more of the revenue from the tax will be used to fund energy efficiency projects.
The bill’s chief sponsor, Councilmember Roger Berliner, said he hoped Montgomery County taking action at the local level might help to spur a federal response to global warming. “Local governments often take the lead on these issues,” said Berliner, “and as a result there is a greater push for federal legislation.”
If the hopes of environmentalists prove well-founded, Montgomery County’s efforts could be duplicated by local and regional governments across the US. Up until now, the preferred method for regulating carbon emissions in this country has been some version of a cap-and-trade program, designed to let major emitters establish a marketplace that creates incentives to cut back on pollution. Recently however, amid concerns that such a market would provide opportunities for the kind of speculation that led to the financial crisis of 2008, lawmakers have been looking at cap-and-trade with a more skeptical eye. The carbon tax model, which mandates costs for major polluters across the board, could end up providing an alternative to cap-and-trade policy.
Photo credit: DSCN1114