Montgomery County Passes Nation's First Carbon Tax

Date: May 26, 2010

On May 19, 2010, the Montgomery County Council passed the nation's first countywide carbon tax. The tax charges $5 per ton of carbon dioxide for any stationary source that emits more than 1 million tons of carbon dioxide annually. Montgomery, one of Maryland's most populous and wealthy counties, expects to collect $10 million to $15 million annually from the tax. In voting 8-1 to approve the tax, the environmentally minded Montgomery County Council is aiming to set an example for the rest of the country and direct the dollars collected to help reduce its greenhouse gas footprint by 80 percent by 2050.

In light of the criteria for the tax, it is evident that the measure is directed at a single carbon producer: Mirant Corporation, the owner of the 850-megawatt coal-fired power plant in Dickerson, Maryland, located on the Potomac River close to the Maryland/Virginia border. Records show that the Dickerson plant releases 3 million tons of carbon dioxide per year, making it the county's largest single stationary emitter. Mirant's Dickerson plant contributes about 25 percent of the county's total greenhouse gas emissions, and almost 40 percent of total emissions from all stationary sources, according to EPA figures.

While the tax will undoubtedly assist in closing the county's nearly $1 billion budget gap, a significant portion of the proceeds from the program will go toward lowering the county's carbon footprint, supporters of the measure say. At least half of the $10 million to $15 million that the program is projected to rake in next year will assist in funding a low interest loan program designed to improve residential energy efficiency with upgrades to windows, heating and ventilating systems, and even the addition of solar photovoltaic panels. That money also can go toward transit and other carbon-reducing programs such as buying renewable energy. Without these funds, the county could not afford such programs.

It is anticipated that Mirant will file a lawsuit in an effort to slow the enactment of the legislation.