Math of environmental tax on indoor marijuana

I played such a small part on the BOTEC team consulting on marijuana legalization in Washington State that I just ran across this BOTEC document:  “Recognize the high GHG [greenhouse gas] intensity of indoor growing with a differential tax”:

A simple recognition of the distinctive climate effects of indoor growing would be to increase the producer tax on indoor marijuana by an amount that reflected (approximately) its respective carbon foot-print. At $30/tonne of CO–a typical value in carbon markets–and assuming average Washington electricity GHG intensity and our “high” value for electric use per unit of product, this would be about 9c per gram of marijuana based on the marginal emission factor of Washington electricity. This amount would not ruin the competitiveness of indoor production but would provide a gentle incentive and have considerable symbolic value. The current cost of commercial electricity for cannabis production is about $400 per kilogram of finished product. This additional climate fee would amount to approximately a 20% surcharge on electricity use, about $90/kg. The status quo for indoor growing is on residential electricity accounts, with average rates that are 9% higher than the average commercial rate in Washington. Climate fees would essentially preserve (or slightly increase) the status quo incentives for energy efficiency.

Advertisement

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: