Energy & Environment

A Bolder Boulder

The Colorado city's citizens are going along with a "carbon tax" to control greenhouse gases that affect the climate. No doubt the new U.S....
by | January 31, 2007

The Colorado city's citizens are going along with a "carbon tax" to control greenhouse gases that affect the climate.

No doubt the new U.S. Congress is looking to California and other big states for guidance on slowing down global climate change. But congressional leaders would also be wise to pay attention to what 21,000 voters in Boulder, Colorado, decided at the polls last November.

By a 60 percent margin, Boulder residents adopted a ballot measure imposing a "carbon tax" -- on their own monthly electricity bills -- to help control greenhouse gases blamed for raising atmospheric temperatures. They made Boulder the nation's first government to tax electric power generated from fossil fuels that emit carbon dioxide to the atmosphere. Of course, Boulder, a trendy college town of 92,000 that's home to the National Center for Atmospheric Research, as well as the University of Colorado, has long been known as one of the West's elite centers for environmental activism.

Still, like many American communities, Boulder gets most of its base-load electricity from coal-fired powerplants. The ballot outcome challenges the prevalent political view that Americans are unwilling to accept higher energy costs, even through taxes designed to deter environmental calamity.

Since the 1970s oil shortages, economists have been arguing that taxing carbon emissions would be the most direct and efficient way for governments to deter the country's destructive dependence on dirty and depletable fossil fuels. In 1975, however, the U.S. House of Representatives defeated, in a stunning 345 to 72 vote, Democratic leaders' proposal for a 23 cent per gallon federal gasoline tax to discourage the nation's reliance on imported crude. Two decades later, a number of House Democrats sacrificed their seats by voting for a BTU tax that President Clinton subsequently abandoned.

The global environment, and the country's energy resources, just might be in better shape today if Congress had gone along with those proposals. Instead, several states are sticking to a regulatory "cap and trade" model, which means that their climate-change policies are built around curtailing auto tailpipe emissions and directing electric utilities to buy power from clean-coal technologies, wind, biomass and other alternative resources. No doubt that's an easier political sell, but economists say there are bound to be costs, in both jobs and economic efficiency, as governments try picking winners and losers the way Congress did in its subsidy-laden 2005 energy legislation.

Strictly speaking, Boulder's self-imposed carbon levy follows the same approach. It isn't a direct tax on carbon emissions. Rather, it's the equivalent of the "systems benefit charge" that many state public utility commissions apply to electricity bills to fund conservation and alternative resources. Colorado doesn't impose such a surcharge, so Boulder designed its own to raise $1 million per year to pay for a municipal climate action plan to cut the city's carbon dioxide discharges back to 1990 levels. Mayor Mark Ruzzin says Boulder officials labeled the proposal a carbon tax because "we were looking for a moniker that would attract people's attention."

Starting this April, Boulder's electric utility will add a tax costing a Boulder household another $1.33 per month on average and a business an additional $3.80. "It's not a punitive measure intended to penalize residents for buying fossil energy," the mayor adds. "That would have turned off some voters. Taxes have always been enough of a challenge to pass, even in Boulder."

Taxing energy enough to discourage consumption would be even less popular with my Montana neighbors who can't afford to replace an old Ford pickup or Chevy Impala with a hybrid Toyota Prius. But Europeans long ago learned to live with higher energy prices and taxes, and the British are considering stiff carbon taxes to help meet that nation's Kyoto obligations. Former Vice President Al Gore has endorsed a trade-off: taxing carbon emissions but offsetting the toll on Americans' pocketbooks by repealing onerous federal payroll taxes.

That grand political bargain would require the federal government to take charge. California's complex global-warming initiative demonstrates the public is ready to deal with climate change. It remains to be seen whether state governments follow through, especially if residents start losing jobs and wealth without significant environmental gains, or if China and other nations begin burning their own ample coal resources. No states are likely to volunteer as laboratories for taxing fossil fuels enough to bring environmental costs into the reckoning. But maybe Boulder voters have given national leaders a hint that Americans could be persuaded to pay more for energy if that prevents drastic global consequences.

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