In San Francisco yesterday, regulators voted to approve the nation's first carbon tax on businesses, which will be required to pay 4.4 cents per ton for the carbon dioxide they emit.
The Bay Area Air Quality Management District's board of directors voted 15-1 in favor of the fee that will cover nine counties beginning July 1.
Policy analysts say the relatively small fee probably won't cause businesses to change their practices, but it does set a precedent for instituting carbon fees in the U.S.
More than 2,500 businesses will be required to pay the fee, though the majority will pay less than $1 according to district estimates. About seven power plants and oil refineries would have to pay more than $50,000 a year. The fees are expected to generate $1.1 million in the first year, which will be used to pay for emissions-reduction programs around the city.
Some business owners have objected to the plan, saying it could complicate a larger, more effective state-wide system being considered by the California Air Resources Board.
San Francisco May Gavin Newsom said he wants voters to decide on an additional tax in November that would charge more for carbon emissions, but lower payroll taxes on businesses that reduce emissions.