California, with a well-deserved reputation for leading the way on environmental protection, has done it again. Last week the Bay Area Air Quality Management District proposed a carbon fee that would apply to all Air District-permitted facilities emitting greenhouse gases. While the proposed fee is tiny — 4.2 cents per metric ton of carbon dioxide equivalent, versus the $10.00 per ton of CO2 tax we propose to be incremented each year — imposing the fee would lay a foundation for substantial carbon taxes in the future.

As proposed, the carbon fee is not revenue-neutral; it is designed to recover some costs associated with Climate Protection Program activities related to stationary sources. The small sums that would be collected don’t appear to warrant returning the money to Bay Area residents. If the fee is increased later on, the logic for making it revenue-neutral would be stronger.

According to a story in the Feb. 9 San Jose Mercury News, the proposal has elicited strong support from the Sierra Club. The Club’s executive director, Carl Pope, got it right when he stated, “There are costs associated with emitting carbon dioxide, and the people who emit it should pay the costs."

The Bay Area AQMD’s jurisdiction is all of Alameda, Contra Costa, Marin, San Francisco, San Mateo, Santa Clara and Napa Counties plus portions of Solano and Sonoma Counties. Click here to see the full proposal. Comments on the draft rule are due March 7.