Carbon tax profile for Colorado (Melanie Gillette; previous versions by Cary Griffin andLauren Guzauskas)

Colorado
1990
2007
% change 1990-2007
Fossil fuel CO2 emissions, in millions of metric tonnes[1]
66.7
98.1
+47%
Fossil fuel CO2 emissions, in millions of short tons[2]
73.5
108.1
+47%
Population, in millions[3]
3.29
4.84
+47%
Per capita CO2 emissions, in short tons
22.3
22.3
0

Per capita emissions in Colorado in 2007 were slightly higher than the U.S. average, which was 21.0 short tons per capita.[4] Factors that contribute to Colorado's higher per capita emissions include coal and natural gas use. Coal and natural gas fired power plants dominate the electricity generation of the state, with coal-fired plants accounting for over seven-tenths of the State's generation, and natural gas-fired plants accounting for close to one-fourth. A dramatic increase in natural gas in 2007 put the electric power sector second only to the residential sector as the leading natural gas consuming sector in the state. Likewise, about three-fourths of Colorado households use natural gas as their primary energy source for heating, one of the highest shares in the nation. Although Colorado has some renewable electricity generation in the form of hydroelectric and wind power facilities, much of the state's substantial renewable energy potential has yet to be developed.[5]

The pie charts below show Colorado's the percentage per sector of CO2 emissions from fossil fuel combustion in both 1990 and 2007. [6]

Per Sector of CO2 Emissions from Fossil Fuel Combustion for 1990
Per Sector of CO2 Emissions from Fossil Fuel Combustion for 1990

Per Sector of CO2 Emissions from Fossil Fuel Combustion for 2007
Per Sector of CO2 Emissions from Fossil Fuel Combustion for 2007


A carbon tax of $30 per short ton of CO2 (about $0.30 per gallon of gasoline, or about $0.03 per kWh of coal-fired power) would have raised about $2.9 billion in 2007 (about $602 per person), assuming a 10% reduction in emissions.

In 2007, Colorado's individual income tax generated $4.8 billion dollars, while the state sales tax generated $2.5 billion dollars.[7] Assuming a 10% reduction in 2007 CO2 emissions levels, the $2.9 billion dollar revenue from the carbon tax could have:
  1. Replaced 60.4% of the individual income tax, or
  2. Replaced the entire state sales tax and about 8.3% of the individual income tax

The Carbon Tax Center has developed a statewide carbon tax model for Colorado. In their model, a tax was set at $37 per ton of carbon and began in 2008. Based on their assumptions, results showed that by 2020-2021, the statewide CO2 emissions would be 40% less than the non-tax, business as usual CO2 trajectory, and the implied annual average emissions reduction rate would be 3.7%. Around 60% of the CO2 reductions would be to the electricity sector. Likewise, the tax revenues would allow the Colorado Legislature to zero out of the sales tax and the business personal property tax by the fifth year, while still providing generous per-resident and per-employee rebates, a supplement to the federal earned income tax credit, and a fund to finance targeted investment in energy efficiency and renewable energy.[8]

In 2007 Colorado released the Colorado Climate Action Plan, which aims to substantially reduce the state's greenhouse gas emissions. The goal of the plan is to reduce emissions by 20% below 2005 levels by 2020, and by 80% below the 2005 levels by 2050. The plan also intends to provide greener electricity, undertake more research and innovation to produce clean coal and natural gas, as well as develop renewable energy sources such as solar, wind and geothermal power. [9] This plan shows Colorado's strong commitment to reducing emissions, developing cleaner energy sources and seriously combating climate change.

Colorado is currently an observer of the Western Climate Initiative (WCI). This initiative, which includes Washington, Oregon, California, Montana, Utah, Arizona, New Mexico, British Columbia, Manitoba, Ontario and Quebec at present, is an emissions trading program designed to reduce greenhouse gas emissions to 15% below 2005 levels by 2020. [10] Colorado will continue to serve as an observer in the WCI, but intends to join the initiative should the Congress and President fail to agree on a national carbon credit trading program. [11]

Carbon credits

Carbon reduction scheme
  1. ^ From EPA, “State CO2 Emissions from fossil fuel combustion, 1990-2007”, linked from here.
  2. ^ 1 metric tonne equals 1.1023 short tons.
  3. ^ 2007 population from the U.S. Census Bureau, http://www.census.gov/popest/states/NST-ann-est.html.
    1990 population from U.S. Census Bureau, http://www.census.gov/popest/archives/1990s/ST-99-02.txt.
  4. ^ U.S. population of 301.6 million in 2007 from U.S. Census Bureau, http://www.census.gov/popest/states/NST-ann-est.html. U.S. carbon emissions of 5.757 billion tonnes (or 6.346 billion short tons) of CO2 from EPA's 2010 U.S. Greenhouse Gas Inventory Report.
  5. ^ EIA state profile for Colorado
  6. ^ Data taken from EPA State CO2 Emissions from Fossil Fuel Combustion, http://www.epa.gov/climatechange/emissions/state_energyco2inv.html
  7. ^ Colorado Government 2007 Revenue Details
  8. ^ Carbon Tax Center -- Effectiveness, http://www.carbontax.org/issues/energy-demand-how-sensitive-to-price/
  9. ^ Colorado Climate Action Plan, http://www.cdphe.state.co.us/ic/coloradoclimateactionplan.pdf
  10. ^ Western Climate Initiative, http://www.westernclimateinitiative.org/designing-the-program
  11. ^ Colorado Climate Action Plan, http://www.westernclimateinitiative.org/designing-the-program