San Francisco Imposes Carbon Tax On Business
SAN FRANCISCO — The Bay Area Air Quality Management District’s board of directors on Wednesday approved new rules to charge businesses a fee for the pollution they emit. The group’s board of directors voted 15-1 on unprecedented new rules that will impose fees on factories, power plants, oil refineries and other businesses that emit carbon dioxide and other heat-trapping gases.The agency, which regulates air pollution in the nine-county Bay Area, will be the first in the country to charge companies fees based on their greenhouse gas emissions, experts say. The new rules will take effect July 1.
The modest fee — 4.4 cents per ton of carbon dioxide — probably won’t be enough to force companies to reduce their emissions, but backers say it sets an important precedent in combating climate change and could serve as a model for regional air districts nationwide.
The fee will not be imposed on vehicles, district spokeswoman Lisa Fasano said.
“It doesn’t solve global warming, but it gets us thinking in the right terms,” said Daniel Kammen, a renewable energy expert at the University of California, Berkeley. “It’s not enough of a cost to change behavior, but it tells us where things are headed. You have to think not just in financial terms, but in carbon terms.”
But many Bay Area businesses oppose the rules, saying they could interfere with the state’s campaign to curb greenhouse gas emissions under a landmark global warming law signed by Gov. Arnold Schwarzenegger in 2006.
The California Air Resources Board, which is charged with implementing the law, is expected next month to issue its preliminary plan to reduce the state’s emissions before it approves a final plan later this year.
Climate change is “a big issue that needs a comprehensive statewide plan to address it,” said Cathy Reheis-Boyd, chief operating officer for the Western States Petroleum Association. “We believe it’s premature for local air districts to design local programs before we have a state program.”
The fees are expected to generate $1.1 million in its first year to help pay for programs to measure the region’s emissions and develop ways to reduce them.
More than 2,500 businesses will be required to pay the proposed fees. About seven power plants and oil refineries will have to pay more than $50,000 a year, but the majority of businesses will pay less than $1, according to district estimates.
The proposed program, which requires companies to measure and report their own emissions, could make it more complicated and expensive to do business in the Bay Area, said Shelly Sullivan, who heads the AB32 Implementation Group, a coalition of business groups working with state regulators to implement California’s global warming law.
“It’s going to make Bay Area businesses less competitive because companies outside the area won’t face similar costs,” Sullivan said. “There would be a patchwork of plans that would not be consistent.”
Opponents also question whether the agency, which is charged with regulating air pollutants such as ozone and particulate matter, has the authority to impose fees on greenhouse gas emissions.
Bay Area district officials believe the agency has that authority because global warming is raising surface temperatures, which worsens air quality.
“We see a direct connection between the climate and air pollution,” said Jack Broadbent, the district’s executive director. “We believe the changing climate is going to require effort on the federal, state and local level.”
The mission of the Bay Area Air Quality Management District, as stated on their Web site, is to attain and maintain air quality standards, increase public awareness of positive air quality choices and to develop and implement protocol and policies for environmental justice.