May 22, 2008

S.F. Bay Area Passes Carbon Tax

The San Francisco Bay Area Air Quality Management District’s board of directors voted overwhelmingly (15-1) to charge area companies 4.4 cents per ton of carbon dioxide they emit, a first for the U.S.,The Associated Press reports.

The new rules, which impose fees on businesses for emitting greenhouse gasses, are expected to generate $1.1 million in the first year to help pay for programs to measure the region’s emissions and develop ways to reduce them. They are set to take effect July 1.

Of the more than 2,500 businesses that will be required to pay the proposed fees, the biggest payers will be seven power plants and oil refineries that would have to pay more than $50,000 a year. The majority of businesses would pay less than $1, the district estimates.

Shelly Sullivan, who heads the AB32 Implementation Group, a coalition of business groups working with state regulators to implement California’s global warming law, says the program will make business in the Bay Area less competitive. Others question whether or not the Bay Area Air Quality Management District even has the authority to impose fees on greenhouse gas emissions.

The Bay Area Air Quality Management District proposed the charge in February.

Last summer, as part of the Western Climate Initiative, California was one of six western states and two Canadian provinces who pledged (PDF) to work together to cut greenhouse gas emissions 15 percent below 2005 levels by 2020.

California’s landmark legislation AB32, requires the state to cut its emissions 25 percent by 2020.

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