Carbon tax profile for Maine (Danny Brendike; previous version byCortney Leach)

Maine
1990
2007
% change 1990-2007
Fossil fuel CO2 emissions, in millions of metric tonnes[1]
19.1
19.9
4.3%
Fossil fuel CO2 emissions, in millions of short tons[2]
21.1
22.0
4.27%
Population, in millions[3]
1.2
1.3
8.3%
Per capita CO2 emissions, in short tons
17.2
16.7
-2.9%

Maine’s net electricity generation is among the lowest in the United States. As in several other New England States, natural gas has become the dominant fuel for power generation in Maine; it has accounted for at least 40 percent of generation since 2001. Renewable sources, mainly wood and wood waste and hydroelectric, account for almost half of Maine’s net electricity generation. Maine is one of the top U.S. producers of electricity from wood and wood waste. Non-hydroelectric renewable energy sources (including wood and wood waste) account for a larger share of net electricity generation (about one-quarter) in Maine than in any other State. Maine’s residential electricity use is low compared with the rest of the Nation, in part because demand for air-conditioning is low during the cool summer months and because few households use electricity as their primary energy source for home heating. In September 1999, Maine’s Public Utilities Commission adopted a renewable portfolio standard requiring that at least 30 percent of retail electricity sales come from renewable sources. In June 2006, Maine adopted another renewable portfolio goal to increase renewable energy capacity by 10 percent between September 1, 2005 and 2017. Renewable sources that are used to satisfy the State’s new capacity requirement cannot be used to satisfy the Public Utilities Commission’s portfolio requirement. Maine made its renewable capacity goal a mandatory target in 2007.[4]

Per capita emissions in Maine in 2007 were lower than the U.S. average, which was 22 short tons per capita.[5] About three-quarters of Maine’s households – the highest share in the Nation – use fuel oil for home heating. Maine has the highest wood and wood waste power generation capacity in the United States.[6]

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 $660 million in 2007 (about $507 per person), assuming a 10% reduction in emissions.

For comparison purposes, in 2007 the state portion of the property tax (unorganized territory) generated about $11.6 million, the state corporate income tax generated about $172 million, the state cigarette and tobacco tax generated about $157 million, the state insurance companies tax generated about 76 million, and the state sales and use tax generated about $975 million [6]. So a carbon tax of $30 per short ton of CO2 could (assuming a 10% reduction in emissions) have replaced the state portion of the property (unorganized territory) tax, the state corporate tax, the state cigarette and alcohol tax, and the state insurance companies tax while providing a $177 million surplus, or could have replaced 82% of the state sales and use tax.

In September 1999, Maine’s Public Utilities Commission adopted a renewable portfolio standard requiring that at least 30 percent of retail electricity sales come from renewable sources. In June of 2006, Maine adopted a goal to increase renewable energy capacity by 10 percent between September 1, 2005 and 2017. Maine made its renewable capacity goal a mandatory target in 2007 [6].

Maine has no fossil fuel reserves but has substantial renewable energy potential. The State’s numerous rivers, forests, and windy areas provide the potential for hydroelectric, wood-fired, and wind-powered generation. Due to its energy-intensive forest products industry, Maine is the only New England state in which industry is the leading energy-consuming sector.[7]

Maine is a participant in RGGI (pronounced 'Reggie'), the Regional Greenhouse Gas Initiative, which launched in September 2008 with the first carbon allowance auction in the United States. Maine's EPA Office of Air Quality has a CO2 offset allowance program under the state's CO2 Budget Trading Program, 06-096 CMR 156. CO2 offset allowances provide compliance flexibility to electric power generators by recognizing certain types of reductions of greenhouse gases from projects outside of the capped sector (the electric sector). Per the program, a generator may use carbon offset allowances to satisfy only a limited portion of its compliance obligation. Initially, the use of CO2 offset allowances is limited to 3.3 percent of a power plant's total compliance obligation during any three-year control period, though this limit may be expanded to 5 percent or 10 percent if certain CO2 allowance price thresholds are reached.[8]
  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. ^ Energy Information Administration. State Profiles, Maine. http://tonto.eia.doe.gov/state/state_energy_profiles.cfm?sid=ME
  5. ^ U.S. population of 295.6 million in 2007 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.
  6. ^ Energy Information Administration. State Profiles, Maine. http://tonto.eia.doe.gov/state/state_energy_profiles.cfm?sid=ME
  7. ^ State of Maine Revenue Forecasting Committee. March 2006 Report. http://www.maine.gov/legis/ofpr/rfcMarch2006report.htm
  8. ^ State of Maine EPA Bureau of Air Quality. CO2 Emissions Offset Projects. http://www.maine.gov/dep/air/greenhouse/co2off.htm