Businesses will be forced to pay an annual fee based on greenhouse gases each emits after the Bay Area Air Quality Management District voted to levee the fee yesterday (see article here). The fee will hit every size business-big and small-at a rate of 4.4 cents per metric ton of carbon dioxide.
According to the Bay Area AQMD, which regulates smog in nine San Francisco Bay area counties, the proposal will rake in over one million dollars to pay for collecting and tracking data on greenhouse gases.
Let’s call this fee what it really is….a carbon tax.
The tax just adds another weight on businesses. That is unnecessary when there is an alternative to this tax—a carbon cap and trade system. If government demands that business carry extra loads to benefit society, then government should lessen the burden of taxes and regulations in other areas to keep businesses functioning properly.
While bigger businesses will get hit with the greater fees under the AQMD plan, smaller businesses will not escape. The Shell Oil refinery in Martinez would pay about $200,000 a year under the proposal. Smaller businesses would pay a minimum of $1.
The idea of charging a tax for greenhouse gas emissions has been floating around for some time but this effort in the San Francisco area will be the first time it is tried. Other areas of the state, as well as other places in the nation, are watching carefully to see if the Bay Area AQMD can successfully make this tax stick.
Businesses are concerned that once the door is opened, other tax and fee proposals might follow, and that the initial tax put forth by the AQMD will be raised.
In addition, the proposed tax will add to the cost of goods and services in the Bay Area if the business is not able to offset the costs in another way. Adding a tax to refineries and gas stations will up the cost of gasoline in the Bay area.
Businesses also are right to worry about a crazy quilt of different taxes and fees in different areas of the state, and a state imposed solution that will come down to implement the bill Governor Arnold Schwarzenegger signed two years ago to deal with greenhouse gases.
Businesses should not be hit by both a state solution to this problem and at the same time be punished with a local tax.
You can’t help but feel this is the beginning of a fee and tax driven enterprise that may or may not deal successfully with the global warming concerns. And you never know where proposals like this will lead. Carl Pope, national executive director of the Sierra Club said, "There are costs associated with emitting carbon dioxide and the people who emit it should pay the costs."
We humans exhaust carbon dioxide. Soon, we all may be hit with a fee for breathing.