The Start of Interstate Carbon Tariffs?

Not content with waiting for federal legislation on the matter, it seems that Minnesota has introduced a “carbon fee” of $4-$34 per ton of carbon dioxide emissions on energy produced –mainly using coal – in North Dakota.  The fee is scheduled to go into effect in 2012. (see here)

North Dakota plans to challenge the new tax, which it rightly says will discourage the purchase of North Dakota power (that is, indeed, the whole point of the tariff). I’m no constitutional scholar, but Article 1, section 10 of the Constitution says that “No State shall, without the consent of the Congress, lay any Imposts or Duties on Imports or Exports, except what may be absolutely necessary for executing its inspection laws…” so the Minnesota tariff appears to be unconstitutional (for whatever that’s worth these days…), at least unless and until Congress gives its consent for it. 

On the one hand, the current political make-up of Congress would suggest that such consent might, disappointingly, be given. On the other, the cap-and-trade bill has stalled in Congress despite the wishes of the majority leadership and the administration, suggesting that the desire to regulate energy and greenhouse gas emissions is lacking crucial support.

In related news, another body supportive of carbon tariffs, the French government, has seen its plans thwarted recently after the Constitutional Court there struck down the proposed carbon tax as unconstitutional.  President Sarkozy had intented to extend the carbon tax EU-wide so as to prevent adverse competitiveness effects on French industry, thus giving the EU the incentive to apply a trade bloc-wide tariff on imports from less regulated countries. So the setback in France is good news for those of us concerned about the damage that carbon tariffs would do.

HT: Scott Lincicome