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First Carbon Tariff to Hit Windy Midwest; North Dakota Up In Arms

The coal industry in North Dakota is up in arms after neighboring Minnesota’s Public Utilities Commission introduced a measure that would levy a carbon tax on coal-fired electricity imports. The idea is to encourage the use of renewable energy in Minnesota and discourage the use of fossil fuels, as well as potentially build a fund to promote renewable projects in the meantime. The tariff would likely promote more wind energy development in North Dakota as well, a state referred to as “the Saudi Arabia of wind power” for its amazing and as yet unrealized potential for wind power.

Beginning in 2012, Minnesota’s plan would charge between $4 and $34 per ton of carbon dioxide emissions for coal-fired electricity. It so happens that most of North Dakota’s energy is supplied by coal, the most carbon-filthy of fossil fuels. North Dakota has countered with the complaint that a carbon tariff would give renewables an unfair advantage over coal. Boo-frickity-hoo. Apparently, many in North Dakota’s state government and coal industry do not understand a carbon tariff, the whole point of which is to give renewable resources an edge over fossil fuel resources. Understood or not, North Dakota appears to be rallying its lawyers for an assault on the proposed tax, with a strange half-million dollars that the state apparently had set aside for just such a purpose.

But is the new law even really a carbon tax? As reported by the Bismark Tribune, yes, it sounds like the tariff is ready to roll in 2012, like it or lump it. But a recent update by Treehugger calls that idea into question. Apparently, the Minnesota provision does not levy a carbon tax but allows the creation of one if it becomes necessary. Instead, it is a planning guide for utilities to determine rate increases for 2012, which sounds eerily like: “Hey utilities, we might put a carbon tax in place in a few years, so be sure to raise your rates accordingly so that the customer will eat most of the added costs.” Perhaps that’s too cynical a view, but not necessarily wrong. Although - the measure’s early effectiveness could be derived from North Dakota’s sudden need to call its lawyer.

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