Overflow crowd at State House calls for fees on carbon

By June 23, 2017News

More than 40 testify in support of carbon pricing

The packed room at the June 20th TUE Committee hearing of carbon pricing

Click here for a PDF version of this article for distribution.

By Marc Breslow, Director of Policy and Research

“To my generation, nothing is more important than climate change. We need solutions now. We demand that you pass a carbon pricing bill,” 14 year-old Aislyn Jewett of Northampton told the State Legislature’s committee considering bills to put a fee on carbon pollution. “Fossil fuel pollution is a crime against our generation.”

At a packed State House hearing on June 20, more than 500 supporters called for the Joint Committee on Telecommunications, Utilities, and Energy (TUE) to support S.1821 and H.1726. Both bills would impose fees on importers of fossil fuels based on the amount of carbon dioxide they release, while rebating most or all of the fee revenue to the public and businesses. 

Leadership from House members

“I was first elected in 2008 when the Global Warming Solutions Act (GWSA) was passed,” said Representative Jennifer Benson (D-Lunenburg), sponsor of the House bill. “At this rate, we will not meet the 2050 requirement under the Act,” referring to the GWSA’s mandate that Massachusetts cut its greenhouse gas emissions 80 percent by 2050. Carbon pollution pricing is the next logical step in our policies to address climate change, Benson argued.

Six other state representatives stood in support of Benson, including Stephen Kulik of Worthington, Solomon Goldstein-Rose of Amherst, and Denise Provost of Somerville. Kulik is Vice-Chair of the House Ways & Means Committee, which likely would consider a carbon pollution pricing bill if one passes the TUE Committee. Kulik said that because driving is a necessity in his large western Massachusetts district, he is pleased that the bills provide a 30 percent higher rebate for residents of rural areas.

Carbon pricing needed to meet state’s greenhouse gas reduction mandate

David Cash, Dean of the McCormack School at U. Mass.-Boston and formerly Commissioner of the state’s Department of Environmental Protection, testified that without carbon pollution pricing, the State will fall behind in complying with the law.   He referred to a chart posted by Committee Co-chair Sen. Mike Barrett, sponsor of S.1821, which showed that if the current trend continues, emissions will fall by only 53 percent from their 1990 level by 2050, far less than the 80 percent required by the GWSA.

Under S.1821, 100 percent of the fee revenue would be returned to the public, with every resident of the state getting an equal rebate, and businesses receiving rebates in proportion to their number of employees. Because the rebates would not depend on the amount of fuel purchased, they would not reduce the incentive that higher prices give consumers to cut their use of heating fuels and gasoline. At the same time, households and businesses that did cut their use of fossil fuels would get to keep more of their rebates and come out ahead.

Under H.1726, 80 percent of the fees would be rebated, and 20 percent reinvested in a Green Infrastructure Fund, which would provide grants to municipalities to pay for clean energy projects, public transportation, energy efficiency programs for renters, and adaptation to climate change.

Youth testify in front of the TUE committee. Photo credit: Bill Ravanesi

Protection for low and moderate income households

Groups such as Community Labor United (CLU) in Boston and ARISE for Social Justice in Springfield have been concerned that raising fuel prices would hurt low-income people. But Kalila Barnett of CLU testified in favor of House 1726 and ARISE has endorsed the bills because they provide protection for the poor.

As lead author of the State’s Clean Energy and Climate Plan and co-author of a 2014 study by the state’s Department of Energy Resources that analyzed the impacts of a carbon-fee-and-rebate system, I addressed the effects on households at different income levels. I explained that energy use generally rises with income, so that with equal rebates per state resident, on average rebates would exceed fees for the lower 60 percent of households, and they would come out ahead. Meanwhile the higher-income 40 percent would pay fees greater than their rebates. And all households could cut their fees and keep more of their rebates by switching to renewable energy and engaging in more energy efficiency.

Economists argue for carbon pollution pricing as most effective climate policy

A panel of economists, including professors from MIT, Harvard, and Tufts, argued for the effectiveness and economic benefits of carbon fees in preference to other policies for cutting greenhouse gas emissions. Chris Knittel of MIT and Gilbert Metcalf of Tufts both emphasized that the predictability of carbon fees that rise over time according to a fixed schedule is what businesses need in order to invest in clean energy and cut their use of fossil fuels. Knittel said that this made carbon pricing preferable to cap-and-trade systems, under which the price to emit carbon pollution has been erratic.

James Stock of Harvard said that carbon fees would have a small, but positive, effect on the state economy. This would occur in large part because Massachusetts imports all of its fossil fuels, sending about $20 billion a year out of state. Fees would reduce those imports, circulating more money in the state’s economy that could be spent on other purchases.

“I would add that there are potential economic upsides of a climate fee that are difficult to quantify, and are excluded from the conservative assumptions of the study, but which could be important,” Stock testified. “By being on the forefront of states tackling climate change, new green technology firms could be drawn to Massachusetts. Enormous investments in low-carbon technologies will be made globally over the coming decades, and a Massachusetts carbon fee could help the Commonwealth be on the ground floor.”

TUE Committee listening to testimony. Photo credit: Bill Ravanesi

Business support

Representatives of the real estate, computer software, fishing, and farming industries all testified in favor of carbon pollution pricing. “We care deeply about sustainability and a low-carbon world,” said Asheen Phansey of Dassault Systèmes, a software firm that employs about 1,000 people in Massachusetts. Phansey estimated that the combinations of fees and rebates would result in a net gain for his company, under either bill.

Public health benefits

Two public health leaders explained that the proposed bills could provide immediate local health benefits. Jonathan Levy, Associate Chair of Environmental Health at the Boston University School of Public Health, is co-author of a recent Harvard-BU study which showed that the pending carbon pricing legislation would generate nearly $3 billion in health benefits. Co-author and pediatrician Dr. Aaron Bernstein, Associate Director at Harvard’s Center for Health and the Global Environment, said that passage of carbon pollution pricing legislation was the single most significant action legislators could take to protect his “constituency,” the children of Massachusetts.

Stephen Dodge of the Massachusetts Petroleum Council, which represents the oil and gas industries, claimed that the Commonwealth is too small an energy user to have a significant impact on reducing carbon dioxide emissions. In contrast, Peter Shattuck of the Acadia Center noted that the five states in the northeast which have carbon pricing legislation pending – Rhode Island, Connecticut, New York, Vermont, and Massachusetts – together constitute the world’s 7th largest economy, and therefore could be a driving force for carbon pricing, and help establish the foundation for a national system.

Dozens of other witnesses who supported the two bills included leaders in finance and investment, communities of faith, environmental advocates, and additional current and former public officials.