Carbon tax profile for Maryland (previous version byMeredith Wisti)



1990
2005
% change 1990-2005
Fossil fuel CO2 emissions in millions of metric tons [1]
70.9
84.6
+19%
In millions of short tons [2]
78.2
93.3
+19%
Population in millions [3]
4.8
5.6
+17%
Per capita CO2 emissions in short tons
16.4
16.7
+1.8%

Per capital emissions in Maryland in 2005 were noticeably lower than the U.S. average, which was 21.4 short tons per capita [4]. The likely factors that contributed most to Maryland's reduced CO2 emissions are a local economy that is not very energy-intensive, per capita consumption which is also low, and the use of some hydroelectric power [5]. Additionally, Maryland has a moderate population level [6] and requires motor gasoline blended with ethanol across the center of the state, including the Baltimore area and the metropolitan area adjacent to Washington, DC [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 $2.2 billion in 2005 (about $400 per person), assuming an additional 20% reduction in emissions from 16.7 short tons per capita to 13.36 short tons per capita.

For comparison purposes, in 2005 the state property tax generated about $766 million, the state motor vehicle fuel taxes generated $753 million, and the state motor vehicle titling taxes generated about $717 million [7]. The state sales and use tax generated about $3.1 billion, and the state income tax (for both individuals and corporations) generated about $6.5 billion [7]. So a carbon tax of $30 per short ton of CO2 could (assuming a 20% reduction in emissions) have replaced the entire portion of the state property tax, the state motor vehicle fuel tax and the state motor vehicle titling taxes combined (each totaling $2.2 billion). Or, a carbon tax of $30 per short ton of CO2 could (assuming a 20% reduction in emissions) have replaced 71% of the state sales and use tax or could have replaced 34% of the state income tax.

In comparison, a carbon tax of $10 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 $865 million in 2005 (about $155 per person), assuming an additional 7% reduction in emissions from 16.7 short tons per capital to 15.53 short tons per capita.

In 2005, the state motor vehicle fuel taxes generated $753 million [7]. So a carbon tax of $10 per short ton of CO2 could (assuming a 7% reduction in emissions) have replaced the entire portion of the state motor vehicle fuel tax.

It is worth mentioning that Maryland is the nation's top-earning state for the third year in a row, with a median household income of $70545 in 2008 [8]. Additionally, Maryland is noted as one of the most environmentally friendly states in the country, making a concerted effort to reduce greenhouse gas emissions [9]. The state is part of the Regional Greenhouse Gas Initiative (RGGI). RGGI is the first mandatory, market-based effort in the United States to reduce greenhouse gas emissions. Maryland is one of ten states that have capped and will reduce CO2 emissions from the power sector 10% by 2018 [10]. Although Maryland's CO2 emissions peaked in 2005 at 84.6 MMTCO2, the 2007 emissions were down to 77.9 MMCO2 [1], and it was recently publicized that Maryland has cut its CO2 emissions by 6% since 2004 [11].

Maryland currently has a Commission on Climate Change that has been charged with collectively developing an action plan to addresses the causes of climate change, prepare for the likely consequences and impacts of climate change to Maryland, and establish firm benchmarks and timetables for implementing the Commission's recommendations [12]. According to early meeting notes in 2007, a carbon tax was discussed and compared with a cap and trade system [13] but later Committee notes indicate that the analysis of a carbon tax proposal was not cost effective [14]. In the final, proposed 2008 Climate Action Plan a carbon tax is listed as a strategy with further study needed [15].

Since Maryland is already participating in cap and trade auctions for CO2 allowances [16], it is likely that more research is needed to convince policy makers that a carbon tax proposal is cost effective for reducing greenhouse gases. Additionally, policy makers should understand that, unlike cap and trade options, a carbon tax has considerable influence on more than just the power sector and has the potential to drive usage reductions, not just shift them elsewhere [14].

Australian carbon credits

Carbon reduction scheme



[1] EPA, http://www.epa.gov/climatechange/emissions/downloads/CO2FFC_2007.pdf ”, linked from http://www.epa.gov/climatechange/emissions/state_energyco2inv.html

[2] Metric-Conversions, http://www.metric-conversions.org/weight/metric-tons-to-short-tons.htm

[3] 2005 population from the U.S. Census Bureau, http://www.census.gov/popest/datasets.html . 1990 population from the U.S. Census Bureau, http://www.census.gov/popest/archives/1990s/ST-99-02.txt .

[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] State profile from the EIA, http://tonto.eia.doe.gov/state/index.cfm
Maryland State Profile http://tonto.eia.doe.gov/state/state_energy_profiles.cfm?sid=MD .

[6] U.S. State Populations, http://en.wikipedia.org/wiki/List_of_U.S._states_and_territories_by_population .

[7] Comptroller of Maryland Website - Detailed Revenue Reports Archive, http://www.marylandtaxes.com/finances/revenue/detailed.asp
Maryland Comprehensive Annual Financial Report (CAFR) Archive, http://www.marylandtaxes.com/finances/revenue/reports/cafr/cafr2005.pdf (page 154 of 162).

[8] CNNMoney.com, http://money.cnn.com/2009/09/21/news/economy/highest_income_census/?postversion=2009092203.

[9] Maryland - Wikipedia, http://en.wikipedia.org/wiki/Maryland.

[10] RGGI Homepage, http://www.rggi.org/home.

[11] Washington Post article, http://www.washingtonpost.com/wp-dyn/content/article/2009/11/13/AR2009111304789.html.

[12] Maryland Climate Change Advisory Group Homepage, http://www.mdclimatechange.us/.

[13] Greenhouse Gas and Carbon Mitigation Working Group Page, http://www.mdclimatechange.us/GHG_Carbon_Mitigation_WG.cfm, Meeting Notes, http://www.mdclimatechange.us/ewebeditpro/items/O40F14517.pdf

[14] Greenhouse Gas and Carbon Mitigation Working Group Page, http://www.mdclimatechange.us/GHG_Carbon_Mitigation_WG.cfm, Meeting Notes, http://www.mdclimatechange.us/ewebeditpro/items/O40F17254.pdf

[15] The 2008 Climate Action Plan, http://www.mde.state.md.us/Air/climatechange/index.asp Chapter 4, Comprehensive Greenhouse Gas and Carbon Footprint Reduction Strategy http://www.mde.state.md.us/assets/document/Air/ClimateChange/Chapter4.pdf (page 71).

[16] Maryland Department of the Environment, http://www.mde.state.md.us/Air/RGGI.asp.