Posted by Eli Sherman at Providence Business News on April 7, 2017
1. What is carbon pricing?
Carbon pricing is a market-based approach to climate action. Here’s how our legislation works: It
places a fee on carbon pollution, paid for by the companies that sell fossil fuels in Rhode Island; 25
percent of the revenue is invested directly into programs to make clean energy and energy efficiency more accessible to all Rhode Islanders; the remainder is returned through an equal per-capita for individuals, or per-employee for businesses rebate.
2. How would it affect residents?
The program will make it easier, and more economically advantageous, for Rhode Islanders to lower their greenhouse gas emissions. The fee-and-rebate design of this policy does two things – first, it protects folks from pass-along costs from fossil fuel companies, and second, it creates an economic incentive to “go green” – because if you use a lot of fossil fuels, you’re paying more into the pot than you’re getting back, and if you use less, you’re getting back more than you put in.
3. How about businesses?
The carbon-pricing policy should have the same effect for businesses as outlined before for residents. It would also have a major economic-development impact. Right now, Rhode Island doesn’t produce any fossil fuels – we’re at the end of the supply chain. That means that every dollar we can transition from out-of-state fossil fuel imports to in-state renewable generation and efficiency is a dollar that ... stays in our economy.
4. How is this year’s legislation different from what you proposed last year?
The positive impacts of this policy from a climate and economic perspective will be stronger if more states join us. So, this year, we have worked with legislators in states across New England to propose state bills that share “triggers” saying the law will only go into effect once neighboring states have passed similar policies.
5. Why do you think you’ll be able to garner the support this year to get it passed?
I’m never overconfident about passage of any of the bills I introduce. But carbon pricing is such a win-win-win. It’s good for our planet and climate, it’s good for our economy and – with the new trigger language – it has no threat of making our state an outlier.
Posted by Matt Pilon at Hartford Business on March 20, 2017
For the past decade, Democratic U.S. Rep. John Larson has regularly lobbied Congress to pass a nationwide tax on carbon emissions, something that had been supported by former Vice President Al Gore.
But the tax, which Larson sees as a way to slow climate change and generate economic benefits, has never gained enough support in the face of political opposition.
Now, lawmakers in Connecticut and two fellow New England states are trying to take matters into their own hands.
Bills before Connecticut, Massachusetts and Rhode Island legislatures would create the first state-level carbon taxes in the country and they're garnering intense opposition from businesses, which say the levy would drive up the price of electricity, natural gas, heating oil, gasoline and propane.
As written, Connecticut's proposed $15-per-ton tax on the carbon emitted by various fossil fuels could generate more than $500 million in the first year, based on 2014 emissions data. That figure could more than double by the fifth year, as the bill allows for annual $5-per-ton tax hikes.
The tax, or fee as some advocates call it, would apply to electricity and natural gas suppliers, including utilities, and virtually every power plant in the state. It would also impact properties — including those owned by manufacturers, universities and hospitals — that have on-site gas-fired combined-heat-and-power plants.
"This is a plan, a principle, whose time has come," said state Rep. Jonathan Steinberg (D-Westport), who is a key supporter of the carbon tax. "We are actually now in a position to capture the true costs of fossil fuels."
Utilities, oil dealers, power plant owners and business groups all expressed concern last week about the bill's potential to increase energy prices in the state, which are already among the highest in the nation.
However, advocates point out that the carbon-tax revenues would be returned to employers and residents in the form of "dividends," helping offset higher costs.
Of the tax revenues collected, 70 percent would be redistributed to individuals and businesses through tax credits or direct checks, while 25 percent would fund energy-efficiency programs that incentivize property owners to adopt cleaner technologies. The remaining 5 percent would fund state administrative costs.
The dividends would generate economic activity, tax proponents say, and reduce reliance on imported fuels, creating jobs in Connecticut.
"We are now spending dollars on an import that supports employment elsewhere," Massachusetts Sen. Michael Barrett told lawmakers at the Capitol last week. "This will create disposable income in the pockets of local residents."
A 2014 study by Regional Economic Models Inc. found that a Massachusetts carbon tax could add as many as 10,000 jobs by 2030, and that most households (particularly low-income) and business sectors could be fully reimbursed for the tax. Bigger energy users like construction and manufacturing firms would see a small loss. Meanwhile, the study calculated that a carbon tax would cut emissions by an additional 5 percent to 10 percent by 2040.
Since 2009, Connecticut and eight other eastern states have lowered electricity-related carbon dioxide emissions through a cap-and-trade program called the Regional Greenhouse Gas Initiative (RGGI). A carbon tax, as proposed, would be added on top of costs utilities pay to RGGI. Some in the electricity industry argue that amounts to double taxation.
But environmental groups say more decisive action is needed if Connecticut is going to keep its climate-change pledges. They say a carbon tax must be placed on all fossil fuels, not just electricity generation.
Bill Dornbos, senior attorney and director of the Acadia Center's Connecticut office, an environmental advocacy group, testified last week that it's uncertain whether Connecticut can hit its next emissions milestone — a 10 percent reduction from 1990 levels by 2020.
The carbon tax's road to approval is complicated.
The Connecticut proposal hinges on both Massachusetts and Rhode Island enacting a tax of at least $10 per ton. Rhode Island's bill also contains a Massachusetts trigger clause. Several carbon-tax proposals have failed in Massachusetts since 2013.
Several states have tried to implement a carbon tax, but none has succeeded (Washington voters turned down a tax last year). But the concept is not untested. Carbon taxes already exist in British Columbia, Alberta, the United Kingdom, France, Sweden, Finland, Ireland and other jurisdictions, according to the nonprofit Carbon Tax Center.
Dan Esty, former commissioner of the state Department of Energy and Environmental Protection, appeared at a press conference last week to advocate for the carbon tax. Why does he think no U.S. state has taken the plunge?
"The single most important thing I learned over my three years as [DEEP commissioner] is that change is really hard to bring about," Esty said. "And it takes a lot of work to get people focused on new options, even when they know the status quo isn't working."
The Connecticut Business and Industry Association (CBIA) strongly opposes the tax, going so far as to request that the Environment Committee suspend its rules and remove it from a public hearing agenda (which didn't happen) for fear that news of the proposal could damage the state's reputation and worry business stakeholders inside and outside of Connecticut.
"What I worry about is Connecticut's continued focus … on this issue at a time when we're already the least competitive state with regard to energy costs in the country," said CBIA lobbyist Eric Brown. "I'm more worried about what signal this sends to the business community in Connecticut, one that is already strained."
Brown also said he doubts actions by Connecticut or several states alone will be enough to address the planet's warming climate.
State Sen. Ted Kennedy Jr., (D-Branford) co-chair of the Environment Committee, said concerns about energy costs are legitimate, but a carbon tax, which is gaining political momentum, is worth discussing.
"This is not, I think, a [fringe] idea," Kennedy said. "There may be some merits to this and that's the reason for having a public hearing today."
Kennedy noted that a group of Republicans, including former Secretary of State James Baker and former U.S. Treasury Secretary Henry Paulson, recently called on the Trump administration to pass a federal carbon tax. The so-called Climate Leadership Council, which says a carbon tax is a market-based solution to climate change, wants a $40-per-ton tax, with taxpayer dividends similar to those in Connecticut's proposal.
"It can unite Democrats and Republicans, market-oriented people, and socially or community-oriented people," said Barrett, the Massachusetts lawmaker. "It's an approach that can fight climate change without creating the normal divisions we see."
The Climate Leadership Council's timing may seem peculiar, given that President Donald Trump's Environmental Protection Agency Administrator Scott Pruitt has questioned climate-change science and, as governor of Oklahoma, sued the federal government over Obama's carbon-reducing Clean Power Plan.
For some, the state bills reflect doubt that the Trump administration will consider taxing carbon. "The states are kind of where the action is on a lot of these issues in my view," Kennedy said.
Congressman Larson said he doesn't think there will be a rush of Republican support anytime soon for a federal carbon tax.
"[Republicans] are for the most part in denial about climate change," Larson said.
Posted by Christine Stuart at CT News Junkie on March 13, 2017
HARTFORD, CT — It’s the first time Connecticut lawmakers are being asked to consider a carbon tax, but they’re not alone.
State lawmakers from Massachusetts, Rhode Island, Vermont, and New Hampshire are looking at similar proposals to reduce carbon emissions.
“It’s a first step for many of us,” Rep. Jonathan Steinberg, D-Westport, said. “This is something that possibly could wind up being a regional initiative.”
The legislation would propose a fee of $15 a ton on carbon pollution that would be levied on petroleum products such as coal, oil, natural gas, propane or any other petroleum products. It would also be levied on electricity generators that use fossil fuels.
The state would then redistribute the tax to residents and businesses, who according to proponents, would be inspired to lower their consumption as a result.
Because a portion of the tax would be returned to homeowners and businesses, Steinberg said, those rebates would act as a protection to what’s been a temptation of lawmakers to sweep these types of accounts to close budget deficits.
Connecticut’s legislation also includes a trigger which would require Massachusetts and Rhode Island to join us, Steinberg said.
At a press conference outside the House chamber, Jeff Mauk, executive director of the National Caucus of Environmental Legislators, said lawmakers are introducing legislation to study carbon pricing in a number of states.
“Signals being sent from Washington D.C. make it clear that it is up to the states to take the lead on climate action,” Mauk said.
Rhode Island currently has a very similar proposal.
“It truly is a win-win,” Rep. Aaron Regunberg of Rhode Island said.
He said the reality is that New England is at the end of the supply chain and that’s not going to change any time soon without a carbon tax.
If you want to transition to more local energy generation, “this is the most ambitious and effective way to make that transition,” Regunberg told the Environment Committee Monday.
Most of the money from Connecticut’s carbon tax will be redistributed back to consumers. At least 25 percent will go to low-income residents to improve energy efficiency and 40 percent would be redistributed as direct dividends to Connecticut residents and 30 percent to Connecticut businesses.
Washington State Sen. Kevin Ranker said the regional conversation in New England will “support a national conversation.”
A national conversation that’s not likely to happen under a Trump administration. Last week, Scott Pruitt, Trump’s pick to head the Environmental Protection Agency, said during his confirmation hearing that he rejected the established science of climate change.
“We’ve seen all the signs from Washington D.C. that this is not likely to be a national push,” Ranker said Monday.
New England lawmakers who support the proposal said their regional support will encourage the middle of the country to join them.
Ranker said there’s clearly an economic argument to be made.
“On the west coast for instance, California, Oregon, Washington, and British Columbia make up the fifth largest economic driver in the world, so if that region does something it will move an economic argument for carbon pricing,” Ranker said. “That will become the norm.”
He said the businesses will have to come along to meet those state standards, if all the states in a region are participating.
“You can fight climate change in a market oriented way so as to not hurt consumers,” Massachusetts State Sen. Michael Barrett, D-Lexington, said.
He said they are working on a way of getting consumers back rebates that would account for whether they live in rural communities and have different consumption needs than those who live in an apartment in Boston.
The proposal was widely opposed by fuel companies.
“There are many reasons that this proposed tax will cause economic harm to Connecticut, but if for no other reason, than the fact that low income residents who already spend a higher portion of their household budget on energy and gasoline,” Gregory Stafstrom, president of Spring Brook Ice & Fuel Service in New Britain, said.
However, at least one company, NRG, supported the legislation.
Dan Hendrick, director of external affairs from NRG, said as one of the largest generators in the state, mostly with fossil fuel resources, “we believe if the state wants to move forward with reducing carbon that this strategy is the right way forward.”
He said it’s scope includes all fossil fuels, including gasoline and diesel.
“Carbon, is carbon, is carbon, no matter where the resource comes from,” Hendrick said.
He said because it’s not centered on any single resource or technology it’s more likely to withstand a legal challenge because “it doesn’t distort the wholesale markets.”
Posted by Tim Faulkner at ecoRI News on March 4, 2017
PROVIDENCE — Support is increasing for a carbon tax, but several business groups remain opposed to the concept.
The fee on all Rhode Island gasoline, oil and natural gas promises to reduce carbon emissions, move the state from imported fossil fuel to locally produced renewable energy, and create jobs.
The program is one of the priority bills for the Rhode Island environmental community this year, and it has a well-organized campaign and marketing plan led by the Energize Rhode Island coalition.
A carbon-tax bill introduced last year died in committee, but this year the concept has the support of Gov. Gina Raimondo and the directors of the Rhode Island Department of Environmental Management (DEM) and the Office of Energy Resources (OER).
Raimondo told ecoRI News she backs a carbon-pricing plan as long as other states in the region follow suit. This year’s legislation includes a “trigger clause” that activates a carbon-pricing program in Rhode Island when neighboring states such as Massachusetts enact their own carbon tax. Massachusetts introduced carbon tax bills in the Senate and House in January. The bills await hearings.
Many of the same groups that opposed last year’s carbon tax bill came out against the legislation this year. Business organizations such as the Rhode Island Business Coalition and the Rhode Island Lumber and Building Materials Dealers Association said a fee on carbon imposes a financial burden on businesses that already pay some of the highest energy costs in the nation.
“Adopting a carbon tax would clearly impact our economic competitiveness by driving up the costs of living and doing business in the state,” the Rhode Island Business Coalition wrote in a letter to the Senate Committee on the Environment and Agricuture.
The Rhode Island Public Expenditures Council (RIPEC) also opposes a carbon tax. RIPEC executive director John Simmons stated in submitted testimony that the reduction in carbon emissions wouldn't be enough to curtail the impacts of climate change, “which is a global problem to which Rhode Island makes little contribution.”
Proponents say a carbon tax helps the state economy by returning 70 percent of the tax revenue to residents and businesses in the form of a dividend. Thirty percent of the tax revenue, or about $30 million, would go into a fund to support local renewable-energy projects and energy-efficiency programs. They say economic growth would be realized as some of the nearly $4 billion the state currently spends on imported fuels is invested in projects that produce energy in the region.
In addition to cutting carbon emissions and reducing airborne pollutants, the expansion of the renewable-energy sector and increased energy efficiency would reduce energy demand and save consumers money.
In theory, a carbon-tax dividend shifts wealth to lower income groups. According to Energize Rhode Island projections, some 80 percent of residents would receive more money in their dividend than they would pay each year through the tax.
Two Senate bills heard March 1 go about enacting the carbon tax in Rhode Island. Bill (S108), sponsored by Sen. William J. Conley Jr., D-East Providence, directs the state Executive Climate Change Coordinating Council (EC4) to conduct an analysis of a state and regional carbon fee. The bill also includes a request for an analysis of carbon pollution and children’s health.
Conley noted that national conservative leaders have joined progressives in endorsing a carbon tax plan. And one such plan was featured in a recent New York Times op-ed.
J. Timmons Roberts, a professor of environmental science at Brown University and a member of the EC4 science advisory committee, said carbon-cutting efforts must begin right away whether or not sea-level rise climbs 3 or 9 feet by 2100.
“Our state’s economy and our quality of life is really at stake,” he said.
Roberts noted that Rhode Island is sending money out of state annually to pay for fossil-fuel energy. “That money is just pouring through our fingers,” he said.
Sen. Josh Miller, D-Cranston, remarked that some local businesses have benefited from renewable-energy incentive programs, which in turn have cut their electricity costs. Overall, he said state incentives have yet to make a meaningful reduction in carbon emissions. Therefore, more substantive actions such as a carbon tax are necessary to address the massive problem.
“We’re not outliers on this issue and neither is this legislation,” Miller said.
Brown University professor of oceanography Timothy Herbert said the planet's carbon dioxide concentration is at its highest level in 800,000 years.
Herbert explained that he tells his students that carbon dioxide levels change more during their four years in college than during the 10,000 years before the Industrial Evolution.
“As a scientist, if you assess the impacts of climate change seriously, then we have a really urgent need to have a comprehensive solution to greenhouse gases across the board,” he said.
Providence residents Justin Boyan said he was compelled to speak out after seeing President Trump and his administration do the bidding of the fossil-fuel industry. He said he joined Resist Hate RI after Trump’s election.
“I don’t see why global warming should be a partisan issue," he said. "It’s fundamentally conservative to me to conserve the planet for our kids."
Boyan warned the politicians in the hearing room that there would be consequences for inaction. “If it (the bill) does die silently in committee, Resist Hate RI and a lot of other people are going to be paying attention and mad.”
Prior to the hearing, Carol Grant, OER director, Janet Coit, director of DEM, and Danny Musher, chief of program development at OER, delivered an update on the state’s long-term greenhouse gas-reduction efforts.
Coit reported that state infrastructure, fisheries and drinking-water supplies are already suffering from higher seas, warmer temperatures and an additional 10 inches of rain per year.
“Climate change is here, it’s now, it’s pervasive in all of the issues we have to address,” she said.
Musher said the state is on target to reach its 2020 greenhouse gas-reduction goals, but plans and programs must be adopted for drastic emission cuts in the state’s transportation and heating sectors — both of which must change in order to meet the 2030 and 2050 targets.
“We can’t meet any of our goals unless we work with out neighboring states,” he said.
“There is so much we can do at the state level, but it does require regional action, bold action,” Coit said.
Some of those regional efforts are already helping to reduce emissions, such as the nine-state Regional Greenhouse Gas Initiative and the 11-state Transportation and Climate Initiative.
“We have to face reality; we are not going to get help from Washington on this ... considering the present administration. That means action has to be taken at the state level,” said Dave Gerraughty of Energize Rhode Island.
Both bills have the support of the Audubon Society of Rhode Island, the Rhode Island Association of Conservation Commissions, People’s Power & Light, R.I. Student Climate Coalition and more than 100 local businesses. The Senate bill were held for further study. A House bill sponsored by Rep. Aaron Regunberg is expected to have a hearing this month.
Posted by Alex Kuffner in the Providence Journal on February 2, 2017
PROVIDENCE, R.I. -- State legislators stood with environmentalist advocates on Thursday to mark the introduction for the second year running of a proposal to tax carbon in Rhode Island as part of a push to curb greenhouse gas emissions.
The crux of the bill introduced by Rep. Aaron Regunberg and Sen. Jeanine Calkin remains unchanged from a year ago. It would still put in place a fee of $15 a ton on carbon pollution that would be levied on petroleum products at their first point of sale in Rhode Island, on electric suppliers based on how much energy they get from fossil fuels and on distributors of natural gas for household and business use.
But in recognition of the fact that Rhode Island cannot be an outlier when it comes to taxing carbon, the bill has been amended this year with a trigger clause. Neighboring states must adopt similar measures for the Rhode Island tax to go into effect.
"Our strategy moving forward is based on a regional approach," said Regunberg, D-Providence.
Efforts are underway already to introduce carbon taxes in Connecticut, Massachusetts, Vermont and New York, according to Jeff Mauk, executive director of the Washington-based National Caucus of Environmental Legislators. With the Trump administration showing little interest in addressing climate change, it is up to states to step in, he told the crowd gathered at the State House in support of the bill.
"Now is the time for our state to take the lead on fighting climate change," said Calkin, D-Warwick. "We must be bold."
Seventy percent of the revenue raised through the tax would go towards direct rebates for residents and businesses. Twenty-five percent would fund renewable energy and energy efficiency programs and the remaining five percent would cover administrative expenses.
"It puts money in consumers' pockets to invest in solar, wind and energy efficiency," said Kat Burnham, energy program manager at Providence-based People's Power and Light.
Posted by Steve Ahlquist at RIFuture.org on February 2, 2017
Representative Aaron Regunberg and Senator Jeanine Calkin introduced carbon pricing legislation today backed by Energize RI, a coalition of advocates from the business, environmental and faith communities as well as legislators from neighboring states. According to Energize RI, the legislation “is designed to provide incentives for energy users to reduce their reliance on carbon-emitting fuels and encourage the development of cleaner renewable energy projects that keep Rhode Islanders’ dollars in the state and create jobs locally.”
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, financed by the fee – set at $15 per ton of greenhouse gas emissions in 2017 – on carbon pollution, paid by the companies that sell fossil fuels in the state. The legislation is designed to go into effect only after neighboring states with a population of over 5 million pass a similar policy.
“The need for this legislation has never been more critical,” said Representative Aaron Regunberg. “2016 was the hottest year ever recorded in human history, and the devastating impacts of climate change are already being felt here in Rhode Island. Global warming is literally an existential threat for human civilization on this planet – and yet, we have never had a federal administration more hell bent on ignoring the problem. With Exxon running the state department and climate deniers at every level of Trump’s administration, we must accept that the ambitious climate action necessary to guarantee an inhabitable planet for our children is not going to come from Washington. It can only come from the states, and that’s why I’m proud to be working with legislators here in Rhode Island and across the Northeast to create a regional carbon pricing strategy that will reduce emissions and bring renewable energy and efficiency to scale in our communities.”
“Now is the time for our state to take the lead in fighting climate change,” said first-term Senator Jeanine Calkin. “This legislation will help us do just that. We no longer have the luxury of denying the facts. We must act now.”
Jeff Maulk, from the National Council of Environmental Lawmakers, brought messages from legislators from the neighboring states of Connecticut and Massachusetts. Massachusetts Senator Michael Barrett wrote, “We’ve been pushing hard for carbon pricing in Massachusetts and it’s incredible to see the whole region coming forward on this issue. If we are going to fight back against climate change we will need to do so together.”
Representative Jonathan Steinberg of Connecticut wrote, “I am very excited to be working to introduce carbon pricing legislation – modeled after Rhode island’s bill – in the Connecticut House of representatives. Your Connecticut colleagues applaud Rhode island’s commitment to protecting the health of all of us across New England by considering this carbon-pricing plan. Along with our neighbors in Massachusetts, Vermont and New York, we hope to join Rhode Island in forging a regional carbon pricing strategy which will ultimately benefit our citizens for generations to come.
According to Energize RI, the program will not increase energy costs for the average Rhode Island family and businesses, and in fact, will reduce costs for all Rhode Islanders in the long term. the bill has been cosponsored by 25 representatives and 10 senators.
Posted by Tim Faulkner at ecoRI News on February 4, 2017
PROVIDENCE — A bill to tax fossil fuels is back again, and this time it’s designed to be more attractive to skeptical lawmakers.
The goal of a so-called "carbon tax" is to accelerate Rhode Island's transition from oil, gasoline and natural gas to local renewable energy. It’s a worthwhile idea, say proponents, because Rhode Island doesn't mine or drill its own carbon-based fuel.
Instead, Rhode Island spends $3.1 billion annually on carbon-intensive gasoline, oil and natural gas extracted from outside the state. A fee on fossil fuels would keep that money local by offering incentives to produce local energy, while cutting greenhouse gases and creating jobs.
“With Exxon running the State Department and climate deniers at every level of Trump’s administration, we must accept that the ambitious climate action necessary to guarantee a habitable planet for our children is not going to come from Washington,” said Rep. Aaron Regunberg, D-Providence, sponsor of the Energize Rhode Island: Clean Energy Investment and Carbon Pricing Act of 2017.
This year, the bill is designed to only take effect when Massachusetts passes a similar carbon tax. To do so, the EnergizeRI Coalition is collaborating with other New England states to pass fee-on-carbon programs.
“This policy would make Rhode Island a city on a hill when it comes to ambitious climate action, helping to inspire other states to follow our lead,” Regunberg said during a Feb. 2 kickoff event at the Statehouse. “Anyone who was worried about this policy making Rhode Island an outlier should have no reason not to support immediate passage of this legislation because it’s not actually going to be implemented until our neighbors step up and follow suit.”
Rep. Jonathan Steinberg of Connecticut and Massachusetts Sen. Michael Barrett are legislating similar carbon-fee bills in their states.
The fee works like this: a tax of $15 is placed on each ton of carbon dioxide or other greenhouse gases emitted from the burning of a fossil fuel. Power plants, electricity and fuel distributors, and gas stations that sell the fuel are assessed the tax. The money would be collected in the Clean Energy and Jobs Fund and “recycled” back into the state. Twenty-five percent of the money would fund programs for renewable energy, energy efficiency and climate-change adaptation. Thirty percent would be returned as a dividend to companies based on their number of full-time employees. Forty percent would be paid as a dividend to each Rhode Island resident. Employees and residents earn their funds via tax credits or receive a check if they don't file a tax return.
Taxed fuels would include propane, gasoline, kerosene, heating oil, diesel fuel and jet fuel. The fee would be collected at the first point of sale or distribution. A natural-gas distribution company such as National Grid would pay the fee annually. A gas station would either have the fee paid by its distribution company or assess the fee at the point of sale.
A study conducted last year by Regional Economic Models Inc. of Amherst, Mass., estimated that the fee-dividend model would reduce energy expenses for the average Rhode Islander, while costing an estimated $25 a year for higher-wage earners.
If other states follow suit, the fee would begin Jan. 1, 2018. It's projected to collect some $40 million in its first year, and create 1,000 to 2,000 jobs in its first two years. After 2020, the fee increase $5 annually.
British Columbia enacted a carbon tax in 2008, which is considered a trial model. Reports indicate that the fee reduced emissions and had a mild benefit on the economy. Much of the rest of Canada is expected to adopt a carbon tax this year. Ireland enacted a fee on carbon in 2010. Australia enacted a carbon tax in 2012, and repealed it in 2014. Chile approved a carbon tax in 2014, but it doesn’t take effect until 2018. Washington state defeated a carbon-tax referendum last November.
“The need for this legislation has never been more critical,” Regunberg said.
He noted that Rhode Island is already suffering from climate change. Ambitious steps are needed to save the planet from the impacts of climate change, but help isn't going to come from the federal government, he said. “It’s going to have to come from the states.”
The bill was introduced in the House on Feb. 3 and will be reviewed by the House Finance Committee. A hearing date hasn't been set.
The Senate bill will be sponsored by Sen. Jeanine Calkin, D-Warwick.
“This is our generation’s moonshot and we need to take steps to do it right now,” Calkin said.
Posted by Peter Vail and Dallas Burtraw at Resources for the Future on March 18th, 2016.
Note: this article is based on a version of the EnergizeRI Act that does not include a $5 annual increase in fee, whereas our proposed legislation does include the $5 increase.
As the political likelihood of passing comprehensive national climate policy has remained low, many states have taken up the mantle. This devolution of climate policy has been further reinforced by the US Environmental Protection Agency’s (EPA’s) efforts to regulate carbon dioxide from existing power plants under the Clean Power Plan, which requires states to develop their own plans for compliance with emissions standards.
Certainly there is no shortage of policy ideas in the “laboratories of democracy” that indirectly aim at carbon emissions by promoting technology adoption or energy efficiency. Currently, two prominent examples of subnational policies aimed specifically at carbon emissions exist: California’s cap-and-trade system and the Northeast’s Regional Greenhouse Gas Initiative (RGGI), which also employs a cap-and-trade approach. Recently, six states have each proposed legislation to introduce a comprehensive state-wide carbon tax: Massachusetts, New York, Oregon, Rhode Island, Vermont, and Washington. (Vermont has a second legislative proposal that is more stringent but has less support in the legislature at this time.) And in California, where there is a robust cap-and-trade program, some legislators have suggested a transition to a tax.
It should not come as a surprise that these proposals have been introduced by Democratic members of state legislatures, and that these states have a history of ambitious greenhouse gas (GHG) mitigation goals. Massachusetts, New York, and Rhode Island all have targets to reduce their GHG emissions by 80 percent of 1990 levels by 2050, while Oregon and Vermont have goals of 75 percent reductions of 1990 levels by 2050, and Washington set a target of reducing 25 percent of 1990 levels by 2035. Furthermore, Massachusetts, New York, Rhode Island, and Vermont are all existing members of RGGI, already demonstrating political willingness to take policy action on climate change.
For RGGI states that also have carbon tax proposals, there is some degree of uncertainty about how the proposed policies would interact with existing policies. Only in Rhode Island have policymakers explicitly addressed this, providing that electricity generation sources covered by RGGI would forfeit only the difference between the auction clearing price and the tax level, so that their emissions would not be burdened twice.
Despite the similarities in political conditions across these six states, the designs of their proposed policies are heterogeneous—differing, for example, in terms of the pollutant covered by the policy. Historically, most policies have focused on targeting carbon dioxide emissions exclusively, as these are responsible for the majority of GHG impacts and are easiest to measure. Half of the states—Oregon, Washington, and Vermont—cover only carbon dioxide with their tax proposals. The others—Massachusetts, Rhode Island, and New York—go a step further and also include methane emissions, which make up a smaller proportion of total atmospheric warming emissions but are more potent. New York also proposes to include other nitrous oxides and any combustion-related GHG emissions.
The stringency of the proposed policies also varies across the states. As highlighted above, the coverage of pollutants differs. All else equal, the policies of those states with fewer pollutants covered are relatively less stringent. In addition to the coverage, the price (tax rate) also determines a policy’s stringency. The initial price level varies from $10 per ton of carbon dioxide equivalent (tCO2e) in Massachusetts to $50 per tCO2e in New York, with the other proposals falling in between. More important, however, is a policy’s price path, which determines how the tax rate evolves over time. The bills from Rhode Island and Washington both include automatic increases at the same rate as the Consumer Price Index (CPI), ensuring that the rate does not get outpaced by inflation. By 2026, in real terms (i.e., assuming no inflation), the price of the proposed policies varies from $15 per tCO2e in Rhode Island to $185 per tCO2e in New York (see figure).
The design differences among the states’ carbon pricing proposals demonstrate the flexibility of a carbon tax, including the wide range of options for implementation, at any scale of government. EPA’s Clean Power Plan has room for states to use a carbon tax for compliance, although states that might choose this compliance pathway would have to overcome additional hurdles to satisfy EPA requirements.
Each state’s proposed carbon tax policy stands to raise considerable revenue. How this revenue is used will be vital in determining the outcomes. In a follow-up blog post, we will investigate how these policies propose to use the revenue as well as the implications for affected households.
Posted by Dave Fallon and Mark Murphy on Rhode Island Public Radio on March 11th, 2016.
Providence Business News Editor Mark Murphy joins Rhode Island Public Radio's Dave Fallon to discuss a proposed tax on carbon emissions with the bill's sponsor, State Representative Aaron Regunberg (D-Providence). Listen to the short segment online at RI-PR.
Opinion posted by Karen Paley, CCL member, on Independence News for Independence Financial Partners on February 19th, 2015.
There are movements afoot to promote renewable energy in Rhode Island.
I know because on January 26 I slipped unnoticed out of the office on Jefferson Boulevard and drove to the State House to hear Representative Aaron Regunberg, D-Providence, members of the Energize Rhode Island Coalition, and two business owners introduce a piece of legislation (LC 3475) that would put a fee on carbon emissions and return the revenues to the people of Rhode Island.
Supporters of this legislation say it will “create 1000 new jobs in the first two years, fund renewable-energy and energy-efficiency projects, and provide rebates to residents to help offset increases in energy costs.
On the same day, as it turned out, Senate President M. Teresa Paiva Weed released recommendations from the “Green Jobs RI” report, including “an extension of the State’s Renewable Energy Standard, which mandates annual increases in the use of power from solar panels, wind turbines, and other clean sources.
I point out these events because they are indicative of the kind of initiatives being taken up by communities all over the world since nearly 187 countries pledged to limit global warming to two degrees Celsius. As UN Secretary-General Ban Ki-moon noted at the end of the recent Paris climate talks, "Markets now have the clear signal they need to unleash the full force of human ingenuity and scale up investments that will generate low emissions and resilient growth." Investing in renewable energy and energy efficiency now will support the wave of the future.