The Nation's First Carbon Tax

San Francisco Bay-area businesses will be the first in the nation to pay a tax on carbon, according to the Los Angeles Times.

At 4.4 cents per ton of carbon dioxide emissions, the tax is expected neither to generate a windfall of cash for local government nor induce much change in polluting industries. Power plants, refineries and other big smokestack polluters would be hit the hardest, whereas most of the 2,500 newly regulated businesses would pay less than $1 a year, according to published reports. All businesses currently regulated for emitting smog-forming pollutants – everything from bakeries to print shops – will be affected, according to the Mercury News.

But it is the first attempt at a global warming regulation that economists say would be more efficient (and possibly more effective) than a cap-and-trade system of regulating carbon emissions. Cap-and-trade regulations on power plants and factories have, over time, been effective in reducing pollution that causes acid rain and smog, but carbon emissions result from many more sources.

The basic idea of a carbon tax is to assess the true cost of pollution up front. As is, carbon dioxide is spewed into the atmosphere at no charge, but the resulting changes to the climate are expected to have profound economic costs, ranging from increased rates of tropical disease to the need for fortifying coastal zones from sea-level rise.

A federal carbon tax has been proposed in Congress, but the most likely regulation to emerge is a cap-and-trade regulation, which all three major party presidential candidates support. (Boulder, Colo., taxes electricity use to generate money for global warming programs, but the Bay Area tax is more far-reaching.)

In the Bay Area, the tax is expected to raise $1.1 million, which will be used to study the region's pollution sources and develop ways to reduce emissions.

COMMENTS ()