An Unusual Plan to Offset Carbon Taxes

A carbon tax does not exist yet in this country (well, except in Boulder, Colo.). But governments and businesses are preparing for the possibility of such a tax — sometimes in unusual ways.

Earlier this month, The Associated Press reported that Tennessee had managed to attract two solar manufacturers in part by agreeing to pay their portion of any future carbon tax.

As the article states, Tennessee officials have promised “that the state will offset increased costs from any future tax on carbon emissions for a select group of companies that make significant investments in the state.”

Tennessee crafted its policy last year, but it attracted little notice until the recent arrival in the state of the two solar companies, Hemlock Semiconductor and Wacker Chemie.

It is unclear whether the promise would apply to higher costs associated with potential cap-and-trade policies, as opposed to a straight carbon tax.

Monique Hanis, a spokeswoman for the Solar Energy Industries Association, told The A.P. that it was an “interesting hedge for states that are trying to attract manufacturing.”

The carbon footprint of solar panels is presumably small relative to that of, say, an auto plant. But Tennessee’s move is a reminder that even green industries may have to account for their emissions.

Manufacturers of photovoltaic cells are among the industries covered in the Environmental Protection Agency’s proposal to require companies to report their greenhouse gas emissions. So too are ethanol plants.

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