Lawmakers Consider Carbon Fees For Polluters That Will Help Pay for Kirwan Bill

Del. David Fraser-Hidalgo (D-Montgomery)

After years of contributing to global warming and receiving federal tax incentives, the fossil fuel industry would have to pay for their share of pollution in Maryland under a proposed bill.

“The Climate Crisis and Education Act,” sponsored by Del. David Fraser-Hidalgo (D-Montgomery) and Sen. Ben Kramer (D-Montgomery) would enact greenhouse gas emission fees on fossil fuels and new high-emission vehicles brought into Maryland and invest that revenue — projected at $674 million in fiscal year 2023 and $1.4 billion by fiscal year 2026 — into education, green infrastructure and protections for low-income families.

The bill would also require the state to reduce greenhouse gas emissions by 60% of 2006 levels by 2030 and achieve net-zero emissions by 2045.

Iterations of this carbon-cutting legislation have been introduced in the General Assembly for the last three years, but have never been passed out of committee.

The purpose of the bill is to “level [the] playing field so taxpayers aren’t consistently paying extra money so that fossil fuel industry can line their pockets with trillions of dollars a year,” Fraser-Hidalgo said to the House Economics Matter Committee on Thursday. Fossil fuel companies have made fortunes on the backs of taxpayers, who have to pay for more emergency room visits and storm water management as a result of climate change, he said.

Del. Lorig Charkoudian (D-Montgomery) described these costs as “non-direct subsidies” that the state pays to the fossil fuel industry.

Maryland has 3,100 miles of tidal shoreline, making it one of the most vulnerable states to sea-level rise from climate change. In 2019, the General Assembly passed an emergency appropriation for $1 million to curtail flooding in Annapolis.

“Why are [fossil fuel industries] getting a free ride? And why are we as taxpayers picking up the cost for increased sea level rise in in the Chesapeake Bay and all around?” Fraser-Hidalgo said.

If the bill is passed, fossil fuel companies would be charged a carbon collection fee, starting with $15 per ton of carbon emissions to a cap of $60 per ton by 2031. The fee for new high-polluting vehicles would begin at $10 per ton and increase to $37 per ton by 2031.

The bill would also create a funding stream for the Blueprint for Maryland’s Future, the multi-billion-dollar education reform bill that passed last week.

“We are in a situation in which we need to educate our kids that are going to be our leading scientists and our leading engineers tomorrow,” Fraser-Hidalgo said. “We need some really, really smart people to undo what our generations have done.”

The bill would direct the first $350 million in annual revenue to the Blueprint fund. The remaining revenue would be split between financial protections for low and moderate-income families and clean energy initiatives, such as building electric vehicle infrastructure and carbon sequestration projects like tree planting.

Thirty percent of the infrastructure funding would be required to go to low and moderate-income residents, particularly communities that are historically burdened by pollution.

Fraser-Hidalgo presented the committee with a map of the five remaining coal plants in Maryland, highlighting their location in low-income and minority communities.

The bill would also establish a Climate Crisis Council to develop a plan to achieve greenhouse gas reduction targets and curtail possible inequities.

Although the bill specifies that the pollution fees cannot be passed down to Marylanders, some lawmakers found it hard to believe that businesses would not try to surreptitiously inject new costs into consumer bills to make up the extra costs.

“Telling people ‘Don’t worry, your gas isn’t going to go up but the gas company just has to pay more to put gas in Maryland’ — that sounds almost impossible,” said Del. C. T. Wilson (D-Charles County). “What true safeguards are there?”

The financial incentives in the bill would help low-income and moderate-income Marylanders, should they experience increases in their energy bills, Fraser-Hidalgo said.

Still, Wilson was worried that the checks would not help impoverished Marylanders in a timely manner. “I want to make sure that we’re not punishing our citizens with good intentions,” he said.

Del. Mark N. Fisher (R-Calvert) said that investing in the nuclear power industry could be a solution to the climate crisis, arguing that there is not enough solar or wind infrastructure ― or ability to store energy ― to address the climate emergency.

But it is not fair to compare nuclear power to renewable sources of energy like solar and wind, Fraser-Hidalgo said. When a nuclear power plant fails, it can kill scores of people, but when solar panels or wind turbines malfunction, the most that happens is that it falls down, he said.

Charkoudian said that this focus on nuclear power plants may confuse people on what the bill is actually trying to do. The bill would equally value non-carbon emitting energy sources and not favor solar or wind over nuclear energy sources, she said.

Del. Steven J. Arentz (R-Middle Shore) questioned whether Maryland would be able to make up for the energy lost by fossil fuel industries. It would be “disingenuous” if that energy is made up by purchasing dirty energy from nearby states like Pennsylvania, and it’s hard to imagine where Maryland would get the money for renewable sources, he said.

Instead of spending $16 billion a year for energy from neighboring states, most of which burn fossil fuels, that money should be invested into clean energy infrastructure in Maryland so that the state can generate clean energy for itself, Fraser-Hidalgo said.

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