Carbon tax profile for Indiana (previous version byTim Nickell)



1990
2005
% change 1990-2005
Fossil fuel CO2 emissions in millions of metric tons [1]
205
232
+12.8%
In millions of short tons [2]
226
255
+12.8%
Population in millions [3]
5.5
6.3
+12.8%
Per capita CO2 emissions in short tons
40.9
40.9
0.0%

Per capita emissions in Indiana in 2005 were almost double the U.S. average, which was 21.4 short tons per capita [4]. Likely reasons of Indiana's high energy usage include: extensive use of coal for electricity and the presence of energy-intensive industries in Indiana including metals casting, aluminum and steel production, and chemicals manufacturing [5].

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 $ 6.13 billion in 2005 (about $981 per person), assuming a 20% reduction in emissions (204.2 million short tons).

For comparison purposes, in 2005 the state portion of the income tax generated about $4.21 billion. Property tax revenues were $8.23 billion, and the combined state sales and use taxes generated about $5 billion [6]. So a carbon tax of $30 per short ton of CO2 could (assuming a 20% reduction in emissions) have replaced about 75% of the property tax or the state income tax or the combined state sales and use taxes.

Energy consumption between 1990 and 2005 was consistent in proportion to population growth, indicating insignificant per capita emissions growth. The average person in Indiana emitted the same amount of CO2 in 1990 as they did in 2005; there were just more people.

There is a high potential for alternative energy production in Indiana. Indiana is one of the top corn producing states in the U.S. and has a high potential for ethanol output. There are currently eight ethanol refineries operating in Indiana [7].

Additionally, two wind farms operate in Indiana. One 87 turbine, 130.5 MW capacity farm operates in Benton County has been in operation since April 2008. A second wind farm is located at Fowler Ridge, also in Benton County. When completed, the Fowler Ridge Wind Farm will generate 750 MW of electricity and be one of the world’s largest wind farms [8].
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carbon emissions
[1] EPA, “State CO2 Emissions from fossil fuel combustion, 1990-2005”, linked from http://www.epa.gov/climatechange/emissions/state_energyco2inv.html.

[2] One metric ton = 1.10231131 short tons.

[3]
1990: http://www.stats.indiana.edu/population/PopTotals/historic_counts_states.asp
2005: http://www.stats.indiana.edu/population/PopTotals/2008_stateest.asp

[4] U.S. population of 295.6 million in 2005 from U.S. Census Bureau, http://www.census.gov/popest/states/NST-ann-est.html. U.S. carbon emissions of 6.317 billion tons of CO2 from EPA, http://www.epa.gov/climatechange/emissions/usgginventory.html.

[5] See Indiana state profile from the EIA, http://tonto.eia.doe.gov/state/index.cfm.

[6] Income, Sales, and Use taxes: http://www.in.gov/dor/reference/files/05rprt_report05.pdf
Property tax: http://www.stats.indiana.edu/dms4/new_dpage.asp?profile_id=65&output_mode=1

[7] http://www.ethanolrfa.org/industry/locations

[8] http://en.wikipedia.org/wiki/Benton_County_Wind_Farm
http://en.wikipedia.org/wiki/Fowler_Ridge_Wind_Farm