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Maryland County Carbon Tax Law Could Set Example for Rest of Country

Montgomery measure will raise millions for clean energy, strengthen Northeast carbon trading scheme, supporters say

By Elizabeth McGowan

May 25, 2010

WASHINGTON—While Congress continues to dilly-dally over passing climate and energy legislation, Marylanders almost in the shadow of the U.S. Capitol have opted to cut to the carbon chase on their own.

Montgomery County passed the nation's first countywide carbon tax on May 19. The is directed at a single coal-burning electricity plant.

In voting 8-1 to approve the tax, the environmentally minded Montgomery County Council is aiming to set an example for the rest of the country and direct the dollars collected to help reduce its greenhouse gas footprint by 80 percent by 2050.

"I hope this contributes to the conversation at the federal level and creates greater incentive for federal action," Roger Berliner, the council member who introduced the tax, told SolveClimate in an interview. "There's no question we need federal action, but federal action won't sufficiently recognize the role of local governments. This legislation highlights the role we can play."

The council vote came as Sen. Lisa Murkowski (R-Alaska) is poised to lead an effort to prevent the (EPA) from regulating heat-trapping gases via the Clean Air Act. Ironically, a disproportionately large number of EPA employees are among the close to 1 million residents of Montgomery County, long considered a Democratic-led bastion of progressivism.

Montgomery, one of Maryland's most populous and wealthy counties, expects to collect $10 million to $15 million annually from the tax, figures from the council indicate.  The new legislation calls for payments of $5 per ton from any stationary source emitting more than a million tons a carbon dioxide during a calendar year.

The only source currently fitting that description is an 850-megawatt coal-fired power plant in Dickerson, a community near the Potomac River in far western Montgomery County on the Maryland-Virginia border. Records show that the Dickerson plant releases 3 million tons of carbon dioxide per year, making it the county's largest single stationary emitter.

Mirant Corp., an independent power company based in Atlanta, owns and operates the plant. Pepco, a transmission and distribution utility in the Washington, D.C. region, has assured Montgomery County officials that the carbon tax will have "no discernible" impact on the electric company’s ratepayers, according to county documents. Pepco buys its long-term power for residential customers at auction for the least expensive price.

Not surprisingly, local environmentalists and scientists are heartened by the efforts of Berliner and his fellow council members. The (CCAN), the , the and University of Maryland researchers were especially supportive.

"The tax will live up to our expectations to really be environmental leaders by doing what is needed to cut greenhouse gas emissions," said Matthias Ruth, director of the at the University of Maryland. "In doing so, the county will provide the right incentives to cut emissions, generate revenue to foster efficiency improvements and break out of the ideological logjam that has prevented taxes from being used as means to guide action."

 

What the Tax Can Achieve for Montgomery County

Greed vs Environmental Progress

Though I hope the motives behind the Carbon tax are genuine, what it in fact does is penalize a facility that has installed scrubbers that remove over 95 % of the SO2 and 90 % of Mercury emissions as requred by the Healty Air Act.

Power is generated by a pool of plants based on the cost of the generation. This tax adds about $5 / MW to the cost of the power so less efficient and controlled sources become competitive and are put back on line. Somewhere where the power is generated more SO2 and Mercury is put into the atmosphere so Montgomery County can collect it's fee.

Who pays? Industry, contrary to popular belief, passes on fees. taxes, costs to the product it sells or it doesn't sell. The consumer ends up paying. It's naive and false to state otherwise. It may not be Montgomery County ratepayers, but reates will in fact go up somewhere to cover the fees and overheads needed to cover it.

From feedback at the hearing, the citizens were majority in opposition to the fee. It is however easier to tax a "Big company" than to raise taxes directly on the citizens or to cut spending. Taxes will continue to be passed and raised as long as they can be 'hidden' or disguised.

If global warming (sorry it's been changed to Climate Change) is a certainty, which has never been verified, show me the proof. It's a theory and not very credible at best. The science needs to be proven - CO2 is not a pollutant, Everyone living thing on the planet exhales it and plants convert it (remember photosynthesis) to plant mass while exhaling O2. Water vapor is a much larger contributor to the potential greenhouse gas arguement, but is summarily ignored.

You can take comfort in the fact that the economic slowdown (yes recession) in the last 2 years has reduced greenhouse gas generation in the US more than regulations and Cap and Trade when passed will cripple the economy so emissions will drastically reduce. We will all be unemployed and unable to afford homes, cars, fuel or electricity. The green economy will be here.

Wrong Way To Address Serious Issue

The Electric Power Supply Association, of which I am President, has long supported federal market-based approaches to significantly reduce greenhouse gas emissions. We are part of a much broader coalition, including business and environmental groups, urging Congress to act on pending legislation to do so.

Unfortunately, the recent action by the Montgomery County, MD Council - despite assertions to the contrary - will not advance the laudable and necessary goal of reducing greenhouse gas emissions. This is already being done on a regional basis through RGGI and needs to happen more broadly, including nationally, to be effective.

EPSA's members, including Mirant, are among the major power suppliers in the PJM regional power grid that serves Maryland, including Montgomery County. Any reduction in GHG emissions from the county will be offset by increases elsewhere to meet electricity demand. Other emissions will increase to the extent power comes from outside MD, which has more stringent state air laws than other PJM states.

Bravo

I applaud the Council for taking the advice of the vast majority of the world's leading scientists and economists by enacting a carbon tax. I can only hope that it becomes a national model!

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