Environmental Law

SF Bay Area Regulators Propose Four-Cent Per Ton Greenhouse Gas Fee

By Dennis Pfaff and Kevin Livingston, Editors

Officials of the Bay Area Air Quality Management District in San Francisco are pursuing what they believe to be the first regulatory fee on greenhouse gas emissions in the United States.

The new fee, which would be set at 4.2 cents per metric ton, would generate an estimated $1 million annually, according to a district spokeswoman, Karen Schkolnick. The money would go toward the district's Climate Protection Program, for projects that  include developing a regional inventory of the gases.  The proposal is laid out in a series of documents, including the planned rule itself, a fact sheet and an announcement of a workshop that occurred Feb. 25.

Schkolnick said those paying the largest share of the fees would include the region's five refineries, as well as power plants and landfills with methane recovery systems. The biggest emitter, a refinery, would pay an estimated $180,000, she said. Only about 800 of the 10,000 or so permit holders regulated by the district would pay anything under the program, some of them as little as $1 to $10 a year, Schkolnick said.

"As far as we understand we are the first in the United States to do this type of [fee] program," she said.

Initial reaction to the proposal was mixed, reported the San Jose Mercury News. While prominent environmentalists supported the idea, it received a decidedly cooler reception from the oil industry. Tupper Hull, a spokesman for the Western States Petroleum Association, an industry group, told the newspaper that consumers could end up paying the price.

"This proposal will raise the cost of producing energy and fuel for California consumers, and at a time when consumers have concerns about what they are paying," he said. "We can't say how much that is, but it is a significant concern."

According to the district's documents, the fee would apply to carbon dioxide, methane and a long list of other gases believed to contribute to global warming. Fees for each facility would be calculated by determining a facility's equivalent emissions of carbon dioxide, based on a table of multipliers. The fees would apply to all facilities with stationary sources of greenhouse gas emissions that are subject to a permit from the district.

The proposed new charge is part of a package of fee increases proposed by the district's regulators that are due to go into effect on July 1. The agency was to accept written comments on the hikes until March 7, 2008. Schkolnick said the district hopes to make a final decision by June 4.

The air district's jurisdiction covers all or parts of nine counties. Schkolnick said the district's authority  to impose fees is rooted in state law, specifically Section 42311 of the Health and Safety Code. She also cited last year's U.S. Supreme Court ruling, Massachusetts v. Environmental Protection Agency, 127 S.Ct. 1438. That ruling held that  greenhouse emissions could be regulated as air pollutants, although the Environmental Protection Agency has not yet decided what to do on the issue.

(Photo: Wikipedia).  

Full post as published by Climate Law Update on March 03, 2008 (boomark / email).