Thursday, May 20, 2010

Local Carbon Taxes Are an Innovative Band-Aid

I must say, I'm pretty proud of the county where I grew up: Montgomery County, Maryland. It just passed the first county-level carbon tax in America. It also increased the energy consumption levy on homeowners and businesses by 85 percent. This comes as only mildly surprising for an area that has long been a fairly progressive suburb of Washington, D.C.

Combined these two new sources of revenue should generate $15 million and $112 million respectively. The sad news is that the money is needed to bridge a budget deficit, and the taxes will sunset in two years. The carbon tax applies to all sources generating more than 1 million tons of CO2 in a given year, charging them $5 per ton. Ironically, only one facility makes the cut: the Dickerson Generating Plant, a coal power station. Some of the money is set to be reinvested in an energy efficiency program for local homeowners.

The tragedy here is that local legislation has become necessary in the fight against climate change precisely because of the failure to pass national and international laws. This failure produces the sort of regulatory patchwork many large businesses say they hope to avoid in their operations across multiple districts. Of course, many of those same large corporations have also lobbied against any action whatsoever.

So while I applaud the first-movers in Maryland, let's hope they also hop the Metro to Washington to put some pressure on Congress to pass a clean energy bill this year so that the Obama administration can negotiate in better faith this winter in Mexico. Meanwhile, China is set to impose a carbon tax on its industries starting in 2012.

[PHOTO CREDIT: Power lines in Dickerson, Md. by Andrew Bossi (CC).]

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