Could a price on carbon emissions be a climate game changer?
Virtually all economists from both sides of the aisle agree that a carbon fee is the most economically efficient way to cut CO2 emissions and is the policy most likely to win bi-partisan support.
On September 25, nearly 100 Massachusetts business leaders gathered to hear Rhode Island Senator Sheldon Whitehouse, Massachusetts State Senator Mike Barrett, and Tufts Professor Gilbert Metcalfe discuss the economic, environmental and political benefits of placing a fee on carbon emissions. Senator Whitehouse has sponsored a bill at the federal level and Senator Barrett has a bill in Massachusetts to do just that.
According to the Office of Management and Budget, a fee of $45/ton of CO2 at the federal level could accomplish a 45% reduction in emissions by 2030. Proceeds could be used to reduce corporate tax rates, thus gaining business allies, and to soften impacts on the poor or other adversely affected groups. A border fee could be used to make foreign imports subject to the tax along with American businesses.
Senator Barrett’s Massachusetts’ bill would make the fee revenue neutral by returning all receipts to the public as an equal per person rebate and to businesses based on their number of employees. This avoids creating a new tax because the government would not receive any revenue. It also avoids a regressive impact on poor families.
The Massachusetts state tax would start at $10/ton and increase yearly until it reaches $40/ton, in order to avoid sticker shock as well as border issues. Strong business support is key to passage of the legislation. British Columbia’s experience with an analogous fee shows that the economy need not be adversely affected, and that such a program can be popular with voters.
You can view a video about the Massachusetts’ carbon fee HERE.
Sen. Barrett’s carbon pricing bill, S. 1747, An Act combating climate change, has been set for a hearing by the Joint Committee on Telecommunications, Utilities & Energy on Tuesday, October 27th at 1pm, Hearing Room B-1 of the State House. E2 will be testifying at the hearing. We encourage you to come. A large turnout will be important to show support for the bill.
The event was sponsored by New England E2, with sister organizations Business Leaders for Climate Action (BLCA), Climate Action Business Association (CABA), and The Alliance for Business Leadership (ABL). Many thanks to the law firm of Wilmer Hale for hosting the event.
Cloudy Future for Massachusetts’ Solar Energy
Solar projects in half of Massachusetts are completely stalled due to a state imposed cap on net metering, a mechanism that credits solar energy system owners for the electricity they add to the grid. The state senate passed a bill that would raise the cap and allow projects to move forward in the short term while also providing a framework for a longer-term solution. Governor Baker has proposed a bill to raise the cap, but it would substantially cut solar incentives after an initial goal was met.
|E2 meeting with MA Senator Ben Downing, Chair of the Joint Committee on Telecommunications, Utilities and Energy. Left to right: Haskell Werlin, Larry Aller, Tedd Saunders, Senator Downing, Berl Hartman, Bill Ravanesi, John Harper.|
Now all eyes are on the House and Speaker Robert DeLeo. The clock is ticking for solar development, since the federal Investment Tax Credit, an important federal incentive, will expire at the end of 2016 and typical solar projects require 12 – 18 months to develop. If action is not taken soon, the previously thriving Massachusetts solar industry, with over 12,000 employees at about 5,000 firms would likely take a major hit.
E2 has testified at hearings, met with members of the legislature, sent letters and is planning a phonation for business leaders to call legislators to make the case for lifting the cap.
Berl Hartman is an E2 New England Chapter Director.