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Earth Power United States Politics

Minnesota Introduces World's First Carbon Tariff 303

Posted by timothy
from the hey-cut-that-crap-out dept.
hollywoodb writes "The first carbon tax to reduce the greenhouse gases from imports comes not between two nations, but between two states. Minnesota has passed a measure to stop carbon at its border with North Dakota. To encourage the switch to clean, renewable energy, Minnesota plans to add a carbon fee of between $4 and $34 per ton of carbon dioxide emissions to the cost of coal-fired electricity, to begin in 2012 ... Minnesota has been generally pushing for cleaner power within its borders, but the utility companies that operate in MN have, over the past decades, sited a lot of coal power plants on the relatively cheap and open land of North Dakota, which is preparing a legal battle against Minnesota over the tariff."
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Minnesota Introduces World's First Carbon Tariff

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  • by Trepidity (597) <(gro.hsikcah) (ta) (todhsals-muiriled)> on Wednesday January 06, 2010 @04:34PM (#30675248)

    Minnesota's attempt to do this dates back nearly 20 years, long before the current global-warming political debate, so interesting to see it finally passing. I believe the first bill was proposed in 1992, which would've imposed a $6 per ton tax; here's a 1994 report [ilsr.org] by a MN environmental group as well. Major attempts seemed to happen every 3-5 years.

  • by Anonymous Coward on Wednesday January 06, 2010 @04:34PM (#30675250)

    No state may regulate interstate commerce. One can find that written in the U.S. Constitution. The legislature in Minnesota needs an education in civics.

    • by Trepidity (597) <(gro.hsikcah) (ta) (todhsals-muiriled)> on Wednesday January 06, 2010 @04:38PM (#30675290)

      It's not nearly that clear in this case. The tax is only applied to companies doing business in Minnesota, and is only assessed on the portion of their business considered to impact Minnesota (i.e. emissions actually generated in Minnesota, emissions imputed to electricity transmitted in Minnesota, etc.). It's at least arguable that that doesn't violate the dormant commerce clause: MN isn't specifically taxing only imports and exempting in-state MN electricity generators, which is the usual inter/intra-state disparity in treatment that caused constitutional problems; nor is the state attempting to tax companies that don't do business in MN.

      • by gknoy (899301)

        Exactly. I think that MN would argue that they're not taxing interstate commerce, but ALL commerce that meets the criteria -- of which much happens to be out of state.

      • by eldavojohn (898314) * <eldavojohn AT gmail DOT com> on Wednesday January 06, 2010 @04:54PM (#30675502) Journal
        Those are all certainly good points but it's not nearly cut and dried unconstitutional as people are making it out to be. For example, I believe states can rightfully burden interstate commerce in the name of health and safety. Take an example from 1890 [justia.com] where states had different laws on the quality and inspection of meat that could be sold within their borders for human consumption. In the name of public safety, Minnesota was allowed to burden interstate commerce on foods not inspected within its borders after someone distributed rank meat acquired from Illinois and not certified by a Minnesota inspector.

        Now, this requires Minnesota to prove that the coal generated electricity is a threat to health and or safety of its citizens. That's going to be hard to do. But as your other post pointed out [slashdot.org], they've been going about this for quite sometime but I'm sure every year they feel closer to being able to prove this is legal on account of public safety.
        • It's even worse (Score:5, Informative)

          by jvonk (315830) on Wednesday January 06, 2010 @04:59PM (#30675590)
          Everything is defined as interstate commerce now, at least when the Feds want it to be. Allow me to cite two Supreme Court cases:

          Gonzales v. Raich [wikipedia.org] - A woman in California grew medical marijuana (legal in CA) and gave it away for free, solely within California. This was defined as interstate commerce in the decision.

          US v. Stewart [wikipedia.org] - Stewart personally designed and built his own homebrew machine guns, not for sale. After he was busted by the feds, he lost the case but won on appeal. The government appealed the case to the Supreme Court. It was remanded by the Supreme Court back to the appellate court for reconsideration "in light of" Raich. This means that the Supreme Court considers Stewart's actions to be interstate commerce too.

          In conclusion, "interstate commerce" is now de facto defined as "anything the Federal government wants to regulate, even if there is no commercial or interstate aspect". Naturally, I imagine that this flexible definition is reserved for the Feds use only--no doubt states will have to continue to use the actual definition (ie. what the Constitution actually means).
          • Re: (Score:3, Informative)

            by Trepidity (597)

            Naturally, I imagine that this flexible definition is reserved for the Feds use only--no doubt states will have to continue to use the actual definition (ie. what the Constitution actually means).

            As far as "what the Constitution actually means", it's not clear that there is actually a blanket ban on states regulating interstate commerce--- there is textually no such ban. It's been inferred from the commerce clause to form the so-called dormant commerce clause [wikipedia.org]. But yes, under existing precedent the dormant c

          • by NotSoHeavyD3 (1400425) on Wednesday January 06, 2010 @11:20PM (#30678972)
            Basically you can grow wheat, grind it up into meal, and then feed it to your chickens. All of this can happen and it never leaves your farm but it's still interstate commerce. (Don't ask me how this can possibly make sense since there's nothing being sold and nothing being transported between states.) I'm thinking the 2 you found probably referenced this one. http://en.wikipedia.org/wiki/Wickard_v._Filburn [wikipedia.org]
        • by Red Flayer (890720) on Wednesday January 06, 2010 @05:26PM (#30675980) Journal

          Now, this requires Minnesota to prove that the coal generated electricity is a threat to health and or safety of its citizens. That's going to be hard to do.

          Au contraire, mon frere. This issue has been proved already in federal court, relating to federal lawsuits brought by NJ under the Clean Air Act to stop dirty coal-fired plants in upwind states (PA, OH, WV, maybe more).

      • by geekoid (135745)

        Why don't they tax there own people who get power from coal plants?

        If they truly want clean energy, and not revenue generation, that would be the logical way to go.

        • by Trepidity (597)

          Isn't that equivalent? It's more or less a sales tax on electricity, pro-rated by how much carbon was used to generated the electricity. They could collect the sales tax from the purchaser, or from the seller; usually sales taxes are collected from sellers, because it's easier to administer such a system.

      • by nsayer (86181)

        It's not nearly that clear in this case.

        It's pretty clear that it fails the duck test [wikipedia.org]. Whether that's enough for the courts or not (and the mere suggestion that it wouldn't be) might boggle the imagination.

  • by Anonymous Coward on Wednesday January 06, 2010 @04:35PM (#30675268)

      The reverends of Church of Climatology will now ADDRESS YOU!!!!!

  • Its about time (Score:3, Insightful)

    by Jenming (37265) on Wednesday January 06, 2010 @04:39PM (#30675300)

    Not having a "tax" on environmental damage causes everyone who is effected by damage to the environment to subsidize industry that damages the environment.

    While it is hard to put a monetary value on environmental damage, its obviously not $0. If an industry is making money damaging the environment, that may be fine, but some of the money really should go to everyone living in the damaged environment.

    Its also nice to see individual states take the lead in issues like this.

    • Re: (Score:2, Insightful)

      by Totenglocke (1291680)

      Its also nice to see individual states take the lead in issues like this.

      Yes, it is nice to see individual states taking a lead in dramatically raising energy costs, especially in a recession. It only further proves how utterly incompetent our leaders. While taking energy is stupid in the first place, even if a country or state is dead set on doing it, only a moron would do it DURING A RECESSION when people don't have the money to pay the tax. Taxing energy raises all costs - do you really thing the people of Minnesota can afford to pay more for heat, fuel for cars, food, lig

      • Re: (Score:2, Interesting)

        by maxume (22995)

        Please define 'dramatic' in numerical terms.

      • Re: (Score:3, Insightful)

        by BeanThere (28381)

        Incompetent? No, I think they know exactly what they're doing: Some bureaucrats smell a cash opportunity, and want to milk it. This is *especially* important during a recession, as they need to also justify their payrolls - now they can look like they're "doing something" while raising the cash to keep paying their salaries, whilst otherwise voters would send them to the streets.

        Basically the economic climate naturally increases the pressure for smaller government, while those politicians who know they aren

  • Obvious, but... (Score:5, Insightful)

    by querist (97166) on Wednesday January 06, 2010 @04:43PM (#30675348) Homepage
    This will, of course, ultimately be passed on to the customers. Ultimately, this is a way to raise taxes to force a change in private industry. The government keeps the money, and we the people pay the taxes. It won't hurt the companies in this case because there is no choice in electricity providers. You can't switch electric companies like you can cell phone companies.
    How, exactly, will this force "cleaner" electricity generation?
    What will be done with the money from these tariffs? Will it only be used for environmental concerns, or will it just go into the general budget?
    • by eldavojohn (898314) * <eldavojohn AT gmail DOT com> on Wednesday January 06, 2010 @05:02PM (#30675636) Journal

      This will, of course, ultimately be passed on to the customers. Ultimately, this is a way to raise taxes to force a change in private industry. The government keeps the money, and we the people pay the taxes. It won't hurt the companies in this case because there is no choice in electricity providers. You can't switch electric companies like you can cell phone companies. How, exactly, will this force "cleaner" electricity generation? What will be done with the money from these tariffs? Will it only be used for environmental concerns, or will it just go into the general budget?

      Minnesota has grown to be fourth in Wind Power generation [windpoweringamerica.gov]. And if you look at time lapse growth [windpoweringamerica.gov] they're really pushing that. The weird thing about it is that they're not even one of the prime wind resource states [windpoweringamerica.gov] although I will testify that the wind gets ridiculous out there. Now, you probably already know this but Tim Pawlenty (Republican) [state.mn.us] is the governor of Minnesota and of course is going to try to get a bid for the presidential run in 2012. On his about page:

      implementing a plan to Americanize our energy sources by generating 25% of the state's electricity from renewable sources by 2025

      As a moderate Democrat, I was kind of afraid when he almost got a bid in 2008 ... because he's actually not that bad of a candidate. He doesn't talk like a moron and he's got his head in a lot of the right places. If he would cut the Christian God talk out of his speeches, I'd probably be on board. Sorry to get offtopic but I'm trying to say that this tariff would probably be a huge in road for him to moderates if he could pull it off. I'm certain he's not the prime motivator behind this but I would bet that they'd take the taxes from this and dump it into wind incentives. They're racing against Iowa in the wind department. California and Texas are too big and too prime locations to take on for Megawatt generation from wind power.

      That is where I bet they would take this money: incentives to corporations for wind power.

    • by Trepidity (597)

      How, exactly, will this force "cleaner" electricity generation?

      It makes cleaner electricity generators more competitive because, as you point out, it raises the price of their competitors' product (electricity from coal-fired generators). A tax on a competitor is basically an indirect subsidy.

    • Question...Why can't you change energy companies?

      Energy has been deregulated for some time now. The owners of the power lines are forced to lease them to anyone. I live in Georgia and have the option of 3 different companies.

      This law will encourage people to use power more efficiently. In addition it helps remove the subsidy that Coal powered electricity has enjoyed for most of the last century. (And yes it is subsidized through legal protections and by not having to clean up much of its environmental d

      • by s73v3r (963317)
        I would assume he can't change energy companies for the same reason he probably can't change ISPs: Lack of Competition.
    • by evilviper (135110)

      This will, of course, ultimately be passed on to the customers.

      The claim is used frequently, by people who have no business knowledge at all, and it's almost always used incorrectly.

      In truth, higher costs are almost always only partially passed on to the customer, if at all.

      It won't hurt the companies in this case because there is no choice in electricity providers. You can't switch electric companies like you can cell phone companies.

      Do you have any idea what subject you're discussing, or did you not make

    • by X_Bones (93097)
      In certain states like Massachusetts, the power plants and the transmission wires are owned by different people. Residents can choose who they want to get their electricity from [saveonenergy.com].

      That way the local public utility infrastructure can be regulated by one set of rules, and the electricity providers by a different set. Makes sense to me. Now if we could only have the same separation of infrastructure and content with the cable companies...
    • by ptbarnett (159784)

      You can't switch electric companies like you can cell phone companies.

      In your state (and Minnesota?), that might be true. In mine, it's not. I have the choice of many power generation companies:

      http://powertochoose.org/ [powertochoose.org]

      I can choose variable rates or fix my electricity rate for up to 24 months. I can also choose electricity solely from renewable sources (it's usually a fraction of a cent per kilowatt-hour more, compared to non-renewable sources from the same provider).

      Rather than imposing a tax on producers, Minnesota legislators should consider giving consumers th

    • by guspasho (941623)

      How exactly?

      Easy. Just like you said, the cost of the tax will be passed on to customers. As taxed carbon-based energy grows more expensive, consumers will turn to cleaner forms of energy that will be relatively cheaper, and companies will increase its production to meet the increased demand for cleaner energy.

      Also, there may be no choice between electricity providers, but providers can offer a choice between clean and dirty energy. Portland General Electric does this. It costs slightly more but PGE guarant

  • by ihuntrocks (870257) <ihuntrocks AT gmail DOT com> on Wednesday January 06, 2010 @04:44PM (#30675368)
    At the risk of getting flamed and shot down, I have to admit that I actually favor actions like this. Will it hold up in a legal sense? Like the Queen's ass, that remains to be seen. However, I have long though that those things which are blatantly harmful to human beings, and the planet in general, should have enough economic disincentives as to make them all but beyond the ability of anyone to procure. Oh, I think you should be free to buy whatever you wish, but I think that freedom should include the freedom to have to spend all of your money on the stupid, inefficient, and harmful things if you so desire them. I'm frankly tired of seeing the economic incentives of "cheap" and "profitable" driving harmful things. It's time the tables turned, in my opinion.
    • by khallow (566160)

      However, I have long though that those things which are blatantly harmful to human beings, and the planet in general, should have enough economic disincentives as to make them all but beyond the ability of anyone to procure.

      How about the things such as coal burning plants which aren't "blatantly harmful" to human beings? I recognize there is some pollution issues with coal burning. It produces small amounts of sulfur dioxides, nitrates, and even introduces more radiation than nuclear plants. They also provide electricity to people and businesses. Benefits outweigh the minor harm.

      I'm frankly tired of seeing the economic incentives of "cheap" and "profitable" driving harmful things.

      I'm frankly tired of seeing things which are not harmful being labeled as "harmful".

      • Let me say, my post is actually more about efficiency versus inefficiency. Generating your power outside of your state and pushing it across inefficient lines (where the majority of our generated electricity is lost) is horribly inefficient. Inefficient use of finite resources IS blatantly harmful, to anyone involved. Furthermore, I was at one time, a Geology major, so I have never really bought into AGW. I'm not really arguing it from that standpoint.

        However, when you look at what all it takes to run a
        • by khallow (566160)

          Inefficient use of finite resources IS blatantly harmful, to anyone involved.

          If it is cheaper, then it isn't less efficient. And merely being relatively inefficient in the consumption of some resource isn't blatantly harmful to anyone.

      • I'm frankly tired of seeing things which are not harmful being labeled as "harmful".

        Well, since toxicity is related to dosage rather than substance, one could argue that everything is harmful, and should be regulated, taxed, and carry a warning label, which is where a lot of the alarmists would like to take us.

        That being said, coal-fired power plants suck ass is a major way, and fuck up the environment for lots of people who bear none of the benefits of that plant. The water here in the northeast has been plagued for decades by acid rain produced by power plants in the midwest. The lo

    • by jamesh (87723)

      should have enough economic disincentives as to make them all but beyond the ability of anyone to procure

      I prefer to think of it as balancing the books. If you actions are responsible for pumping x amount of pollution into the atmosphere then you should be responsible for cleaning it up. This cleaning up can happen in various ways, in the example of using electricity from coal fired power stations and only considering the CO2 pollution:
      . The electricity company plants some trees or otherwise sucks the pollution out of the air, and charges you an increased rate for doing so
      . The electricity company pays a third

      • So long as those trees you plant aren't close enough to that coal plant to be effected by the acid rain (coal being made of carbon, hydrogen, oxygen, nitrogen, and sulfur, the byproducts of which will form carbonic and sulfuric acid in rain), and if they are far enough away to escape exposure to the mercury, uranium, thorium, and arsenic that are also byproducts of coal emissions. If so, that plan works wonderfully.
      • Well, to plant enough trees to compensate for the carbon we're throwing in the air, we'd probably have to reforest the Amazon for millions of years. Not that it's a bad idea, I just sayin' ...
  • I am proud (Score:2, Funny)

    by haderytn (1232484)
    To live in Minnesota!
  • This qwill fail; (Score:2, Insightful)

    by geekoid (135745)

    you can't tariff another state..you can TAX the hell out of electricity from that state. tariff and tax is not the same thing.

  • I smell War! North Dakota should invade!

    • by swb (14022)

      Until not that long ago, wasn't North Dakota something like the world's #3 or #4 nuclear power? Between the missile silos and the airbases in Grand Forks and Minot, I think they had plenty of nukes.

      • by s73v3r (963317)
        Back during the Cold War, a lot of the nuclear missile silos were located in the Midwest, specifically the Dakotas and Montana. Growing up in SD, I would hear stories from teachers about practicing for fallout drills, because should such an attack come from those heartless bastard Commies, we would be one of the initial targets. Anyways, what you're referring to was the thought that should South Dakota, North Dakota and Montana secede from the nation and form their own, it would be one of the top 5 nuclear
  • This will not likely reduce carbon, what will likely happen is coal plants in other states to will increase capacity while the ones in Minnesota will likely shut down. This is the same thing that is happening with the US and China. Companies in the US can't afford to meet all the environmental regulations, so they move to China, and continue to pollute. The end result is the same amount of pollution, and increased unemployment in the state/city/country with the strict regulations.
    • by ari_j (90255)
      Except that Minnesota's tax is on electricity generated by coal plants anywhere, which is the source of the whole North Dakota thing. North Dakota has a huge electrical generating capacity, most of it from North Dakota coal with increasing portions from wind farms in various parts of the state, and exports a lot of that electrical power to Minnesota. Minnesota is doing nothing but increasing the price of electricity for its people.
      • by Chirs (87576)

        You miss the point. They're increasing the price of electricity as currently provided in order to create incentives to provide alternate forms of electricity generation.

        Coal is dirty and cheap. As long as it stays cheap, there is little incentive to use more expensive alternate sources. If they make coal artificially expensive, it becomes economically feasible to invest in alternate sources. Once they're commoditized, the alternate sources may become cheaper, bringing the price of electricity back down.

  • by ScientiaPotentiaEst (1635927) on Wednesday January 06, 2010 @05:02PM (#30675630)
    ... has such a surplus that it can afford to introduce yet another incentive to leave.

    Why do governments so often fail to consider the effects of disincentives? For example, when raising taxes, they calculate expected increases in revenue while underestimating changes in the behavior of the taxed. They always act surprised when the expected additional revenues don't materialize, or indeed revenues fall.

    Perhaps it has something to do with most elected officials being lawyers and not businessmen, engineers, etc.

    • Re: (Score:3, Interesting)

      by ari_j (90255)
      Interestingly enough, North Dakota is one of the few state governments that has a surplus right now. A huge one. With the lowest unemployment rate (4.1%, low in any economy). Guess which industry can rightly take a lot of the credit for making that possible.
    • Re: (Score:2, Informative)

      by osu-neko (2604)

      Why do governments so often fail to consider the effects of disincentives?

      Huh? That's exactly what this is all about. They're trying to get people to stop using coal. They're not failing to consider the disincentives, the whole point of this tax is to create a disincentive. If everyone stops using coal and they end up generating no revenue at all with this tax, they will consider the tax to have been wildly successful.

  • by dwiget001 (1073738) on Wednesday January 06, 2010 @05:05PM (#30675678)

    -- what's next? A fat tax? If so, Minnesota might just tax itself into oblivion.

  • Sweden, Finland, Denmark, Norway and The Netherlands introduced a Carbon tax in 1990-1991. France and Ireland have just introduced their own and it appears that even in the US this isn't a first as Boulder Colorado (2006) and the "Bay Area Air Quality Management District" (2008) had already introduced Carbon Taxes.
  • Given the prevailing Westerlies, most of that pollution from those Dakotan coal plants gets pushed over Minnesota, delivering acid-rain and whatever else to Minnesotans. Yet because these electricity producers have government-given guarantees that they need take no responsibility for such damages, Minnesotans (and others further away) have to suffer the consequences without recompense.

  • Minnesota has passed a measure to stop carbon at its border with North Dakota. Wonderful! So Minnesota has deployed a large-scale working version of Maxwell's daemon, then? Or perhaps they've merely come up with a scheme to make generating power with coal in ND and then selling to MN less cost effective (which admittedly is perverting the free market to achieve a common good).
  • by vik (17857) on Wednesday January 06, 2010 @06:41PM (#30676812) Homepage Journal

    So in 2012 someone might think about taxing CO2 emissions. Not cutting them, taxing them. Too late.

    What we need is action now. Action like massive taxes on the construction of fossil fuel-powered power plants, so that the CO2 absorbtion systems (i.e. trees) can be ready at approximately the same time as new emissions start, and alternatives can be financed before new power plant starts emitting.

    Vik :v)

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