Maryland to Use $70 Million of Climate Revenue for Tax Rebates
Photo via Cleveland
The state of Maryland has announced that it plans on using the $70 million it makes from charging utilities for carbon emissions to aid lower income families—and in doing so, it's breaking from the 9 other states participating in the Regional Greenhouse Gas Initiative. Other Northeastern states mostly use the revenue to fund renewable energy projects. The state's move fuels one of the fiercer debates bubbling over about using a national cap and trade: that is, what's the most responsible way to spend all the money it'd make? This is understandably a controversial issue, and even supporters of a cap and trade system in general are torn. For instance, in the Democrat's climate and energy bill, which includes a mechanism for a "cap and invest" system, the matter of where the climate revenue (no, that's not the official term: there isn't one. But it makes sense, right?) would go was left entirely open for debate. Many argue that any climate revenue should be used as the 9 states in the RGGI use it: to promote and fund renewable energy projects and development.
Obama has other ideas. His proposed cap and trade would generate $645 billion in climate revenue, and his budget outlines that money going to help low and middle income families cope with the raised cost of utilities—much like Maryland's.
It all constitutes a worthy question: which is better, to ease the immediate burden of a cap and trade (or even a carbon tax) by using the funding it generates to offer rebates or tax breaks? Or to forge ahead, and invest the money in renewable energies that will ease the burden further down the road? Admittedly, in the current economic climate, the latter may be a tougher sell, seeing as how just about nobody thinks imposing new financial burdens on folks right now is a good idea. Then again, funding renewable projects ideally leads to more jobs—which of course could be attractive to those nervously eyeing that 8.5% unemployed rate that keeps on rising.
Of course, many, many other issues factor into the raging cap and trade debate too: how many permits to auction, how to regulate it, and whether it'd be better to replace it with a tax altogether. But where the revenue goes could be a deal breaker for skeptical politicians engaging the issue—it's a critical pillar in the architecture of any cap and trade or carbon tax system.
More on Cap and Trade:
Democrats Introduce Huge Cap and Trade , Renewable Energy Bill
Latest Cap and Trade Announced - By European Airlines?
Will Obama's Cap-and-Trade Ideas Survive a Gauntlet of Lobbyists