RGGI Proposal is a Major Step Forward, but Economy-Wide Carbon Pollution Pricing Needed to Meet Legal Mandates in Massachusetts
Boston, Mass. (Aug. 24, 2017) – The decision on Wednesday by nine Northeastern states to accelerate emissions reductions in the electricity sector continues the past decade’s progress, but carbon pollution pricing must be extended economy-wide in order for Massachusetts to meet its legal mandate to cut emissions to 80 percent below the 1990 level by 2050.
In order to be on track to achieve that reduction, Massachusetts must cut its overall (economy-wide) CO2 emissions about 20 percent between 2020 and 2030. Under the new Regional Greenhouse Gas Initiative (RGGI) proposal, the electricity sector would contribute only about 30 percent of that cut, leaving other economic sectors to reduce emissions by the remaining 70 percent.
Two bills, Senate 1821 and House 1726, which together are co-sponsored by 40 percent of the legislature, would establish a carbon fee-and-rebate system economy-wide, exempting the electricity sector which would continue to be covered by RGGI.
The Joint Committee on Telecommunications, Utilities and Energy held a hearing June 20 on the bills, that was attended by more than 500 supporters and had three hours of continuous testimony backing the bills by more than 30 expert witnesses.
“Under current policies we will fall far short of the 2050 mandate, and most greenhouse gas emissions now come from outside the electricity sector, primarily from transportation and heating of buildings,” said economist Marc Breslow, Policy and Research Director of Climate XChange, a member of the state’s carbon pricing coalition, the Massachusetts Campaign for a Clean Energy Future. “Extending carbon pricing economy-wide, through a carbon-fee-and-rebate system, is the most effective, efficient, and fair way to make up the shortfall, to reduce emissions and strengthen the economy.”
A graph developed by Breslow and presented by Committee Co-chair Senator Mike Barrett, sponsor of S.1821, showed that existing policies will leave Massachusetts far from achieving the internationally-recognized standard of an 80 percent emissions reduction.
The plan announced by states in the RGGI cap-and-trade system – Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New York, Rhode Island, and Vermont – would further reduce power plant emissions by 30 percent between 2020 and 2030. The plan must be approved in each state.
Provisions of Massachusetts Carbon Pollution Pricing Legislation
Both S.1821 and H.1726 would charge fees on fossil fuels when they enter the state, creating incentives to use less of them. These revenues would go into a special dedicated fund, and most or all of the money would be passed on to households and employers to help offset any increased costs and to invest in clean energy and energy efficiency.
Because there would be no connection between how much a person pays in fees and the size of the rebate, there would be a strong incentive to use less fossil fuel in order to keep more of that money. The bills would protect most low- and moderate-income households because they generally use less energy than those with higher incomes, and as a result their rebates likely would exceed any increased costs they paid.
- S.1821 – An Act Combating Climate Change, sponsored by Sen. Mike Barrett (D-Lexington). Similar to provisions in last session’s S.1747, the bill would rebate 100 percent of revenues to individuals and employers. All residents would get an equal rebate, and employers would receive rebates based on their number of employees.
- H 1726, An Act to Promote Green Infrastructure, Reduce Greenhouse Gas Emissions, and Create Jobs, sponsored by Rep. Jennifer Benson (D-Lunenburg). Benson’s bill has similar provisions, but would use 20 percent of the revenues for a Green Infrastructure Fund, which would award grants to cities, towns and regional agencies for investments in clean energy, public transit, and climate change adaptation initiatives. Rebates to households would be targeted to low- and moderate-income families.