Montgomery County Mulls Carbon Tax

By Sabri Ben Achour

In Maryland, the Montgomery County Council is considering a tax on carbon emissions that would, in effect, only apply to the county's major coal-fired power plant owned by Mirant Corporation. Councilman Roger Berliner says it would raise $15 million dollars for transit and emission-reducing county programs.

"Certainly we need the revenue," says Berliner. "But it is also fair to expect that the major emitter that contributes to the problems we are spending hard earned taxpayer dollars to address should contribute to solving that problem."

Mirant argues that the tax will make its electricity more expensive, and will push customers to use energy produced by plants based outside of Maryland with fewer pollution controls.

The company also says that it's already paid for it's carbon emissions through what's known as the Regional Greenhouse Gas Iniatiave, or RGGI. The initiative is an agreement between ten states, including Maryland, to set a limit on the amount of carbon they can release. Under that plan, emitters such as power plants bid on how much of that pollution pie they can put out.

"It is working exactly as planned: you either buy allowances to cover your emissions, or you curtail operations and don't produce emissions," says Mirant spokesperson Misty Allen.

Dr. Matthias Ruth directs the Center for Integrative Environmental Research at the University of Maryland. He agrees that RGGI has worked as planned, but "where the results are on a bit on the disappointing side is that the revenues generated are relatively small and the prices per unit of carbon are relatively low," he says.

Ruth says that's because the cap in this cap and trade experiment hasn't been very ambitious. It doesn't require reductions for at least five to six years, and the planned 10 percent reduction in emissions doesn't take effect until 2020. In part that was because of concerns over how it would affect rate payers and utilities. Ruth says that modelling and preliminary results (the system went into effect only in 2009) have shown that in some cases, utility customers can save money through gains in efficiency.

"There is room to use the market to provide an additional incentive to go beyond the cap that's been established," he says.

According to Ruth, that incentive is the carbon tax proposed by Councilman Berliner.

Allen, the spokesperson for Mirant, says the tax will make Mirant's power more expensive. Customers, Allen says, will source their power outside of Maryland, from plants that don't have as stringent controls on pollution.