By implementing carbon pricing and re-investment in Rhode Islander, residents and the state as a whole will benefit in three ways: More cash in every resident's pockets through rebate checks to households, stronger businesses and more job growth through re-investment, and a well-funded Energize RI program that will prepare the Ocean State for a cleaner and more climate-resilient energy future. I strongly support the coalition's efforts to pass a carbon pricing bill in Rhode Island."
Mark Renburke, Drive Electric RI / Drive Electric America
Click the links below or scroll down for answers to Energize FAQs.
The Basics
What is carbon pricing?
Who's paying the fee on carbon pollution?
Who supports carbon pricing?
How much will carbon pricing affect energy prices?
How will the revenue be used?
The Regional Perspective
How is economy-wide carbon pricing different from the Regional Greenhouse Gas Initiative (RGGI)?
RGGI already places a price on carbon emissions from electricity production. Does the Energize RI policy proposal take this into account?
The Economics
Will this act create jobs?
How would carbon pricing affect Rhode Island’s competitiveness in the region? How does the policy ensure that businesses will stay in Rhode Island?
How will this legislation affect my household's energy expenses? What about my business?
Low-income energy consumers tend to spend a larger portion of their income on energy than other consumers. Won’t this disproportionately impact them?
Climate Resilience
How does carbon pricing fit into Rhode Island’s larger climate resilience picture?
What is carbon pricing?
Who's paying the fee on carbon pollution?
Who supports carbon pricing?
How much will carbon pricing affect energy prices?
How will the revenue be used?
The Regional Perspective
How is economy-wide carbon pricing different from the Regional Greenhouse Gas Initiative (RGGI)?
RGGI already places a price on carbon emissions from electricity production. Does the Energize RI policy proposal take this into account?
The Economics
Will this act create jobs?
How would carbon pricing affect Rhode Island’s competitiveness in the region? How does the policy ensure that businesses will stay in Rhode Island?
How will this legislation affect my household's energy expenses? What about my business?
Low-income energy consumers tend to spend a larger portion of their income on energy than other consumers. Won’t this disproportionately impact them?
Climate Resilience
How does carbon pricing fit into Rhode Island’s larger climate resilience picture?
What is carbon pricing?
Carbon pricing is a market-based approach to addressing climate change. Climate change is caused by the carbon dioxide pollution emitted as a result of burning fossil fuels. Carbon pricing places a fair fee on carbon pollution that takes into account its true social and environmental costs and incentivizes emitters to reduce their carbon emissions. The fee is applied at the first point of sale within the state, which means that the fee is primarily the responsibility of those who sell fossil fuels--that is, the electricity generators or the gasoline distributors--rather than the consumers.
Carbon pricing is a market-based approach to addressing climate change. Climate change is caused by the carbon dioxide pollution emitted as a result of burning fossil fuels. Carbon pricing places a fair fee on carbon pollution that takes into account its true social and environmental costs and incentivizes emitters to reduce their carbon emissions. The fee is applied at the first point of sale within the state, which means that the fee is primarily the responsibility of those who sell fossil fuels--that is, the electricity generators or the gasoline distributors--rather than the consumers.
Who’s paying the fee on carbon pollution?
Carbon pricing legislation will not directly put a fee on any individuals or small businesses. Rather, the fee will be charged to fossil fuel companies at the first sale of fossil fuels in the state. Some of the cost may be passed on to consumers, but any additional costs will be offset by annual rebates. In addition, revenue from the Economic and Climate Resilience Fund will help make energy efficiency and renewable energy affordable and accessible so that consumers will have more opportunities to reduce their carbon footprint.
Carbon pricing legislation will not directly put a fee on any individuals or small businesses. Rather, the fee will be charged to fossil fuel companies at the first sale of fossil fuels in the state. Some of the cost may be passed on to consumers, but any additional costs will be offset by annual rebates. In addition, revenue from the Economic and Climate Resilience Fund will help make energy efficiency and renewable energy affordable and accessible so that consumers will have more opportunities to reduce their carbon footprint.
Who supports carbon pricing?
Carbon pricing is supported by organizations, businesses, economists, scientists, and government leaders across the state, country and globe. The World Bank, the International Monetary Fund, Sierra Club, and many other respected organizations have all endorsed carbon pricing. Big-name economists and politicians from across the political spectrum, such as Greg Mankiw and James Baker, overwhelmingly support the idea. Even companies such as ExxonMobil, Nestle, and National Grid have acknowledged that carbon pricing is the best method for combating climate change while growing the economy. This is a form of climate action that almost everyone can agree on. Here in Rhode Island, many businesses and business coalitions, such as the Rhode Island chapter of the Green Building Council and Rhode Island Business Climate Leaders, have voiced support for a price on carbon pollution.
Carbon pricing is supported by organizations, businesses, economists, scientists, and government leaders across the state, country and globe. The World Bank, the International Monetary Fund, Sierra Club, and many other respected organizations have all endorsed carbon pricing. Big-name economists and politicians from across the political spectrum, such as Greg Mankiw and James Baker, overwhelmingly support the idea. Even companies such as ExxonMobil, Nestle, and National Grid have acknowledged that carbon pricing is the best method for combating climate change while growing the economy. This is a form of climate action that almost everyone can agree on. Here in Rhode Island, many businesses and business coalitions, such as the Rhode Island chapter of the Green Building Council and Rhode Island Business Climate Leaders, have voiced support for a price on carbon pollution.
How much will carbon pricing affect energy prices?
The proposed carbon price starts at $15 per ton of carbon dioxide equivalent. This translates to about a 15 cent price increase per gallon of gasoline and less than 1 cent per kilowatt hour of electricity. The program is projected to generate about $140 million of revenue in the first year, which will go directly back to Rhode Islanders through checks and tax rebates and will be reinvested into Rhode Island’s economy through the Economic and Climate Resilience Fund. Many Rhode Island residents, especially those that make sustainable choices, will come out ahead despite the increased energy prices. Household rebates will amount to around $50 per person in the first year whereas business rebates will equate to around $80 per full time employee.
The proposed carbon price starts at $15 per ton of carbon dioxide equivalent. This translates to about a 15 cent price increase per gallon of gasoline and less than 1 cent per kilowatt hour of electricity. The program is projected to generate about $140 million of revenue in the first year, which will go directly back to Rhode Islanders through checks and tax rebates and will be reinvested into Rhode Island’s economy through the Economic and Climate Resilience Fund. Many Rhode Island residents, especially those that make sustainable choices, will come out ahead despite the increased energy prices. Household rebates will amount to around $50 per person in the first year whereas business rebates will equate to around $80 per full time employee.
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How will the revenue be used?
70% of the revenue will be distributed as direct rebates to Rhode Islanders: 40% of the total revenue will go directly to households based on the number of residents, and 30% will go to businesses and institutions based on the number of full time equivalent employees.The remaining 28% will create the Economic and Climate Resilience Fund to invest in climate resilience, renewable energy, and climate adaptation throughout Rhode Island. This distribution of revenue ensures that businesses and families that make sustainable choices come out ahead while creating a fund to kickstart clean energy infrastructure in our state. A maximum of 2% of the total revenue will pay for administrative overhead costs; any additional revenue will go back to the Economic and Climate Resilience Fund. |
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How is economy-wide carbon pricing different from the Regional Greenhouse Gas Initiative?
The Regional Greenhouse Gas Initiative (RGGI) is a cap-and-trade system on electric power plants throughout New England, New York, Delaware, and Maryland. RGGI limits the amount of allowable carbon emissions from electricity power plants and rewards states for falling below the established limit. Cap-and-trade systems and carbon fees are two different ways to put a price on carbon pollution. Since 2009, Rhode Island has made millions of dollars by staying below our state’s carbon pollution limit and selling our excess carbon credits (for more information on RGGI, view their factsheet or website). Most of this revenue has been invested back into renewable energy and energy efficiency in RI. The cap-and-trade form of carbon pricing has helped RI become a leader in energy efficiency and sustainability. But RGGI only covers the electric sector, not all fossil fuels: by extending carbon pricing economy-wide, we can benefit even more from carbon pricing, making our communities resilient to climate change and growing our state’s economy.
The Regional Greenhouse Gas Initiative (RGGI) is a cap-and-trade system on electric power plants throughout New England, New York, Delaware, and Maryland. RGGI limits the amount of allowable carbon emissions from electricity power plants and rewards states for falling below the established limit. Cap-and-trade systems and carbon fees are two different ways to put a price on carbon pollution. Since 2009, Rhode Island has made millions of dollars by staying below our state’s carbon pollution limit and selling our excess carbon credits (for more information on RGGI, view their factsheet or website). Most of this revenue has been invested back into renewable energy and energy efficiency in RI. The cap-and-trade form of carbon pricing has helped RI become a leader in energy efficiency and sustainability. But RGGI only covers the electric sector, not all fossil fuels: by extending carbon pricing economy-wide, we can benefit even more from carbon pricing, making our communities resilient to climate change and growing our state’s economy.
RGGI already places a price on carbon emissions from electricity. Does Energize RI take this into account?
The Regional Greenhouse Gas Initiative (RGGI) charge will be subtracted from Rhode Island's fee on electricity, ensuring that electricity consumers are not doubly charged for the carbon pollution associated with electricity use. The proposed economy-wide carbon pricing policy complements and extends RGGI. It applies the same transparent price on carbon pollution across all energy sectors: this means that the carbon in natural gas, oil, gasoline, and other sources of fossil fuel energy will be equally, fairly, and fully accounted for.
The Regional Greenhouse Gas Initiative (RGGI) charge will be subtracted from Rhode Island's fee on electricity, ensuring that electricity consumers are not doubly charged for the carbon pollution associated with electricity use. The proposed economy-wide carbon pricing policy complements and extends RGGI. It applies the same transparent price on carbon pollution across all energy sectors: this means that the carbon in natural gas, oil, gasoline, and other sources of fossil fuel energy will be equally, fairly, and fully accounted for.
Will this act create jobs?
Yes! Based on economic projections, this bill would create approximately 1,000 jobs in the first two years and over 3,000 by 2040 (see the REMI study for more specifics). Jobs will be created across the economy: many new opportunities will arise in construction and renewable energy as Rhode Island invests in new, sustainable infrastructure. Jobs will also be created in retail, healthcare, and other sectors as consumers spend less on energy and have more disposable income to spend elsewhere in our state economy.
Yes! Based on economic projections, this bill would create approximately 1,000 jobs in the first two years and over 3,000 by 2040 (see the REMI study for more specifics). Jobs will be created across the economy: many new opportunities will arise in construction and renewable energy as Rhode Island invests in new, sustainable infrastructure. Jobs will also be created in retail, healthcare, and other sectors as consumers spend less on energy and have more disposable income to spend elsewhere in our state economy.
How would carbon pricing affect Rhode Island’s competitiveness in the region? How does the EnergizeRI's proposed policy ensure that businesses stay in Rhode Island?
Because carbon pricing helps grow Rhode Island’s economy--including by expanding job opportunities and increasing RI’s Gross State Product--EnergizeRI's proposed policy positively affects Rhode Island’s regional competitiveness, whether or not other states implement similar legislation. However, to defend against any chance of a loss in regional competition, our bill will not go into effect until both Massachusetts and one other RGGI state have implemented their own carbon prices. Becoming a leader in carbon pricing ensures RI’s competitiveness in the global transition to a low carbon and green economy. The state that created the nation’s first offshore wind farm is poised for further growth.
Because carbon pricing helps grow Rhode Island’s economy--including by expanding job opportunities and increasing RI’s Gross State Product--EnergizeRI's proposed policy positively affects Rhode Island’s regional competitiveness, whether or not other states implement similar legislation. However, to defend against any chance of a loss in regional competition, our bill will not go into effect until both Massachusetts and one other RGGI state have implemented their own carbon prices. Becoming a leader in carbon pricing ensures RI’s competitiveness in the global transition to a low carbon and green economy. The state that created the nation’s first offshore wind farm is poised for further growth.
How will the proposed policy affect my household's energy expenses? What about my business?
Check out our fact sheet on the economic impact on Rhode Island households here.
Check out our business energy expenses calculator here.
Check out our fact sheet on the economic impact on Rhode Island households here.
Check out our business energy expenses calculator here.
Low-income energy consumers tend to spend a larger portion of their income on energy than other consumers. Won't the proposed fee disproportionately impact them?
No; in fact, the proposed carbon price will financially benefit low-income Rhode Islanders. Although low-income Rhode Islanders do spend a larger portion of income on energy, they tend to have lower energy costs overall. Furthermore, the policy that the EnergizeRI Coalition supports would give more money in rebates to lower income Rhode Islanders. The rebates to low-income households will more than make up for increased energy costs. Residents in all three lowest income quintiles (the bottom 60%) will, on average, receive more money back than they pay in pass-along costs from fossil fuel companies. In addition, the Economic and Climate Resilience Fund will open up new opportunities for low-income energy consumers to take advantage of energy efficiency and home weatherization.
No; in fact, the proposed carbon price will financially benefit low-income Rhode Islanders. Although low-income Rhode Islanders do spend a larger portion of income on energy, they tend to have lower energy costs overall. Furthermore, the policy that the EnergizeRI Coalition supports would give more money in rebates to lower income Rhode Islanders. The rebates to low-income households will more than make up for increased energy costs. Residents in all three lowest income quintiles (the bottom 60%) will, on average, receive more money back than they pay in pass-along costs from fossil fuel companies. In addition, the Economic and Climate Resilience Fund will open up new opportunities for low-income energy consumers to take advantage of energy efficiency and home weatherization.
How does carbon pricing fit into Rhode Island's larger climate resilience picture?
As climate change increasingly threatens Rhode Island, we must take urgent action to protect our economy and environment, as well as future generations. In 2014, the General Assembly implemented the Resilient RI Act, which set goals of 45% carbon emissions reductions by 2035 and 80% reductions by 2050. Other policies, like the Renewable Energy Growth Program, the Renewable Energy Standard, and Governor Raimondo’s 1000 megawatt clean energy goal, commit our state to increasing our renewable energy infrastructure and building climate adaptation capacity in Rhode Island. However, there is no clear pathway to achieving the carbon emission reductions we need in achieve in 17 years. A price on carbon alone will get us halfway to the Resilient RI emissions reductions goals for 2035, and the Economic and Climate Resilience Fund will enable even more investment into existing and new renewable energy and resilience infrastructure programs. This policy provides the critical means to help Rhode Island achieve its climate goals.
As climate change increasingly threatens Rhode Island, we must take urgent action to protect our economy and environment, as well as future generations. In 2014, the General Assembly implemented the Resilient RI Act, which set goals of 45% carbon emissions reductions by 2035 and 80% reductions by 2050. Other policies, like the Renewable Energy Growth Program, the Renewable Energy Standard, and Governor Raimondo’s 1000 megawatt clean energy goal, commit our state to increasing our renewable energy infrastructure and building climate adaptation capacity in Rhode Island. However, there is no clear pathway to achieving the carbon emission reductions we need in achieve in 17 years. A price on carbon alone will get us halfway to the Resilient RI emissions reductions goals for 2035, and the Economic and Climate Resilience Fund will enable even more investment into existing and new renewable energy and resilience infrastructure programs. This policy provides the critical means to help Rhode Island achieve its climate goals.