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Md. lawmakers question impact of proposed carbon fee

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Sponsors of a bill to enact a carbon fee say high-tide floods in Annapolis will only get worse without action to curb greenhouse gas emissions.
Source: Associated Press

Some Maryland lawmakers gave a skeptical reception to a proposal to set a carbon pollution charge, calling the idea well intended but asserting that it could end up hurting residents and businesses in the state.

Senate Bill 702 and companion House Bill 1235 would establish an initial charge of $20 per metric ton of carbon dioxide that would increase by $5 per metric ton each year until net emissions from fossil fuels and other greenhouse gas-emitting sources reach zero. The fee would apply to fossil fuel use in the transportation, household, and commercial and industrial sectors as well as in the generation of electricity for distribution or consumption in Maryland.

Most of the money collected from the fee — 70%, according to testimony presented during recent hearings — would go toward rebates to help households and businesses offset increased fuel and electricity costs. The remainder would go to an infrastructure fund that would invest in initiatives such as carbon-free transportation, clean energy and energy efficiency, and climate resiliency efforts.

In those hearings, state Sen. Ben Kramer and Del. David Fraser-Hidalgo pitched the so-called Healthy Climate Initiative bill as one that will help Maryland meet its target to reduce greenhouse gases 40% below 2006 levels by 2030 and will go hand-in-hand with a proposal to increase the state's renewable energy target to 50% by 2030.

Those lawmakers, both Democrats, backed a similar proposal in the 2018 legislative session that never made it out of committee. In separate hearings before legislative panels on March 5 and 8, the two pointed to Maryland's vulnerability to rising sea levels from climate change as a reason to enact a carbon fee.

But a few members of the House Economic Matters Committee on March 8 said that while climate change needs to be addressed, the bill might be too costly, particularly to low-income residents.

Del. Kathleen Dumais, a Democrat, called the fee a "regressive" tax on those who cannot afford to buy an electric car. "You're going to be hurting poor people who have cars and have to get to work," she said.

Del. Benjamin Brooks, a Democrat, said he is concerned cost increases will be too harmful to low-income residents, while Del. Christopher Adams, a Republican, wondered whether the rebates would be all that helpful to those facing higher costs.

According to the Climate XChange, a group that supports carbon pricing and is promoting the bill, the fee would bring in $1.5 billion in its first year and would add roughly 18 cents per gallon to the price of gas in the first year and 4.5 cents per gallon each year thereafter.

Climate XChange co-founder Jessica Langerman, however, said most should get a rebate check that substantially exceeds any gas or electricity increases. The group estimated that a low-income household with one adult and one child, with fuel oil-based heating, typical electricity use and one car driven 10,000 miles a year, would get a rebate of $36 a month to offset a $21 monthly increase in combined fuel oil, electricity and transportation costs.

But acknowledging some of his fellow lawmakers' concerns, Fraser-Hidalgo said he is willing to work with the committee to find some way to further boost protections for consumers and get support for the legislation. Climate change and its impacts will only get worse, he said.

"Something like this must be done," Fraser-Hidalgo said.

The Chesapeake Climate Action Network and Sierra Club support the bill. The Maryland Motor Truck Association, a trade group that represents the motor carrier industry, and the Mid-Atlantic Petroleum Distributors Association, which represents convenience stores and energy distributors, oppose the legislation.