Carbon tax profile for Kentucky (previous version byCara Bradbury)



1990
2005
% change 1990-2005
Fossil fuel CO2 emissions in millions of metric tons [1]
119
152
+28%
In millions of short tons [2]
131
168
+28%
Population in millions [3]
3.7
4.2
+13%
Per capita CO2 emissions in short tons
35.5
40.2
+13%

Per capita emissions in Kentucky in 2005 were almost double the U.S. average, which was 21.4 short tons per capita [4]. This is probably because Kentucky ranks third in the nation in coal production [5]. Kentucky accounts for about one-tenth of U.S. coal production and nearly one-fourth of U.S. production east of the Mississippi River. Nearly one-third of all the coal mines in the nation are found in Kentucky.

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 $4 billion in 2005 (about $965 per person), assuming a 20% reduction in emissions.

For comparison purposes, in 2005 the state portion of the property tax generated about $472.6 million, the state Corp. Inc. and License (business) tax generated about $612.6 million, and the state sales tax generated about $2.6 billion [6]. So a carbon tax of $30 per short ton of CO2 could (assuming a 20% reduction in emissions) have replaced the entire state portion of the property tax, state business tax and state sales tax combined, with a remaining $314.8 million in revenue. (The state income tax generated $3.0 billion.)

In 2005 Kentucky received $184.4 million in Coal Severance tax [6]. Coal Severance taxes are correlated with the price of coal and would be affected (mostly likely reduced) by a carbon tax [7]. However, the remaining $314.8 million of previously calculated revenue from a carbon tax of $30 per short ton of CO2 could replace the entire Coal Severance tax as well.
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] 1 metric tons = 1.10231131 short tons

[3] 2005 Kentucky population from http://www.rupri.org/Forms/Kentucky.pdf.
1990 Kentucky population from http://www.census.gov/prod/2001pubs/c2kbr01-2.pdf.

[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] Kentucky State Profile http://tonto.eia.doe.gov/state/state_energy_profiles.cfm?sid=KY.

[6] Kentucky Department of Revenue Report http://www.revenue.ky.gov/nr/rdonlyres/ca87f049-f274-4ac9-802f-16746f10e28b/0/annualrpt0506.pdf.

[7] Understanding Kentucky's Coal Severance Fund http://www.kftc.org/our-work/high-road/coal-severance-tax.