Carbon pricing legislation would steer RI toward cleaner energy while boosting local economy
STATEHOUSE - Backed by a coalition of advocates from business, environmental and faith communities, Rep. Aaron Regunberg announced that he will introduce legislation today to reduce Rhode Island’s reliance on fossil fuels and bolster the state’s clean energy and green business sector.The legislation is designed to provide incentives for renewable energy use, encourage the development of cleaner renewable energy projects, and create local jobs.
“2015 was the hottest year in human history, and 16 of the last 18 years have been the hottest on record,” said Representative Regunberg (D-Dist. 4, Providence). “Here in the Ocean State, where so many of our people and businesses are located along the shore, we stand to lose a great deal from increased sea level rise, more severe flooding, and more extreme weather events, which we are already experiencing. We must take more decisive action on climate change, and carbon pricing is a proven tool that will help us reduce our reliance on dirty fossil fuels while directly benefiting Rhode Islanders.”
The legislation would establish a new Clean Energy and Jobs Fund that will invest in renewables and efficiency and help Rhode Islanders lower their energy costs. The Fund will be financed by a fee on carbon pollution, beginning at $15 per ton of greenhouse gas emissions, paid by the companies that sell fossil fuels in the state.
Besides investing in clean energy efforts, the fund would also send a per capita or per employee rebate to every family and business in the state. “The rebate system accomplishes two things,” said Regunberg. “First, it protects Rhode Islanders from pass-along costs by the fossil fuel companies. And second, it creates a concrete economic incentive for individuals and businesses to invest in efficiency and renewables, because the cleaner and greener you are, the more you’ll benefit from that rebate.”
Representative Regunberg was joined by advocates from the Energize Rhode Island Coalition, a group formed last year to promote the legislation. Several business members of the coalition spoke, including Joseph Fernandes, a small business owner in Providence for over a decade. “If you were to attempt to open a business today in many parts of our state, you would find yourself facing a whole new set of barriers that didn’t exist for my parents,” Fernandes said. “You would be faced with the burden of having to pay for costly flood insurance premiums that will only grow higher. Climate change means your business is always vulnerable to an extreme weather event that could permanently close you down. These are on top of the challenges that already exist and they will only grow more dire year after year. These issues cut into both your profits and your ability to expand. Something must be done, and that’s why I am proud to join over 100 small and medium businesses across Rhode Island who have endorsed the Energize RI Act.”
According to the Energize RI Coalition, carbon pricing will complement existing state programs to help Rhode Islanders reduce their energy costs, make renewable energy more available, and put people to work in the growing clean energy industry. “This legislation allows us to invest in one of the strongest segments of our economy, the clean energy sector. This sector is already growing at a rate that is stronger than the rest of Rhode Island’s economy, supporting over 10,000 jobs and adding 1,600 more by the end of the year,” said business owner Ken Filarski of Filarski Architecture. “The Energize RI Act will accelerate this field. Passing this legislation means more funds to install solar panels, insulate houses, and implement other energy efficiency measures. It means more Rhode Islanders working in a field that has proven itself to be both profitable and sustainable.”
Business interests are not the only ones represented in the coalition, of course. “While issues of climate-change pose huge threats to all of us, it’s clear that lower-income families have been paying the highest price to date for an economy so heavily reliant on carbon-based energy sources. “We see this, for example, in the higher incidences of childhood asthma in our inner cities,” said Douglas Hall, Director of Economic and Fiscal Policy at the Economic Progress Institute. “This bill does a few things that we at the Economic Progress Institute think are important. A portion of the carbon tax will be passed onto consumers, including lower-income families, in the form of higher prices. The Energize Rhode Island Act addresses this concern, by providing rebates to Rhode Island families and businesses, ensuring they come out ahead. We have seen the incidence analysis of this bill and are confident that lower income Rhode Islanders will be more than protected from additional costs."
An economic impact study by Regional Economic Models, Inc. (REMI) estimated that the legislation would create a net growth of 1,000 to 2,000 new jobs in just the first two years of the program. It also noted that Rhode Island spends more than $3.1 billion annually on fossil fuels, nearly all of which flows out of the state, since Rhode Island does not produce these fuels itself. Incentivizing Rhode Islanders to switch from out-of-state fossil fuel sources to local renewables and efficiency will help keep more of that money in Rhode Island and protect the state from the volatile market swings that often affect these fuel prices.
The legislation establishes that 25 percent of the fees collected for the Clean Energy and Jobs Fund would be used for climate resilience, energy efficiency, energy conservation, and renewable energy programs, to be administered by the state infrastructure bank created through legislation last year. Thirty percent would be used to provide direct dividends to employers in the state per full-time employee, and 40 percent would be used to provide direct dividends for every single state resident. Employees and residents would receive their funds via tax credits, or direct checks for those not required to file taxes.
According to the coalition’s research based on average energy use data, the program will not increase energy costs for the average Rhode Island family and businesses In fact, by paving the way for a transition to an energy independent economy, the policy will reduce costs for all Rhode Islanders in the long term. In the short term, the average Rhode Island household receives a net gain from the rebate. Even higher-income households will have an average net cost of only $25 per year toward the Clean Energy and Jobs Fund.
The bill has been cosponsored by 40 representatives, including House Environment and Natural Resources Committee Chairman Arthur Handy (D-Dist. 18, Cranston), Rep. Lauren H. Carson (D-Dist. 75, Newport), Rep. Carlos E. Tobon (D-Dist. 58, Pawtucket) and Rep. David A. Bennett (D-Dist. 20, Warwick, Cranston).