Previous Carbon Pricing Legislation

In the 2016 legislative session, there were two bills in the legislature on carbon pricing: S. 1747 and S. 1786.

Senator Mike Barrett, An Act Combating Climate Change (S.1747)

“This bill, which establishes a carbon fee and rebate system, now has 44 co-sponsors in the Legislature.  It would create a dedicated, transparent fund, separate from the government’s general treasury, then put a charge on the carbon content of fossil fuels when they enter the state, starting at a low level and gradually increasing. The revenues from those fees would go into the dedicated fund. Then, every state resident would receive an equal rebate, and employers would get rebates based on their number of employees.  On average, people and employers would receive rebate payments that would fully offset the higher cost of gas and oil, and low- and moderate income households would come out ahead because they use less energy than wealthier households. However, all people and employers who reduced their use of fossil fuels would come out ahead because they would get to keep more of the rebate.”

7 Principles of the Bill

S1747, “An Act Combatting Climate Change”: Basic Features of its Carbon Fee-and-Rebate Design

S1747 is designed to be effective at reducing GHG emissions, to be equitable to households, businesses, and institutions, and to strengthen the Massachusetts economy, through the following principles and design features.

1) Sufficient Fee Rate:

The rate per ton must eventually be high enough so that, in combination with the state’s other climate policies, Massachusetts will reach our GHG reduction mandates – 25% below the 1990 level for 2020 and at least 80% below 1990 for 2050. S1747 would have a top rate of $40 per ton of carbon dioxide (CO2) in year 7 — high enough to get us well on the way to reaching our mandates.

2) Gradual phase-in:

The amount of the fee/tax should be phased in over some number of years, perhaps five to ten, to allow households and businesses time to adjust; for example, by implementing energy efficiency and renewable energy measures. S1747 sets the fee at $10 per ton of CO2 in the first year, rising $5 per year until it reaches $40 in the 7th year

3) Economy-wide:

Along with other existing policies, all major sources of GHG emissions should face a significant carbon price, and each source should face a similar price where feasible. S1747 exempts the electricity sector, which already has a carbon price through a cap-and-trade system, the Regional Greenhouse Gas Initiative (RGGI), that covers nine northeast states.

4) Return all funds to the public:

S1747 creates a specific fund in which all revenues are held, and from which they are all returned to the public – with those funds paid by households going back to this sector as a whole, and those from businesses/institutions going back to them.

5) Fully compensate most households:

Low and moderate-income households should on average receive at least as much money back in rebates or tax cuts as they pay in carbon fees/taxes. S1747 provides an equal rebate to every resident of Massachusetts. Research shows that the lower 60 percent of households would come out ahead, on average, from the combination of fees and rebates.

6) Protect business competitiveness:

Sufficient rebates should be provided to MA businesses that are energy-intensive and/or in competition with firms from other states or nations so that MA companies are not disadvantaged in comparison to those based elsewhere. S1747 does this by rebating all the fees paid in by businesses back to them in proportion to their number of employees. In addition, the state’s Department of Energy Resources is given the authority to provide additional assistance to any business sectors that are particularly impacted.

7) Provide additional assistance to vulnerable households:

To the degree feasible, the rebate system should provide additional protection to low-income households whose circumstances currently result in high carbon emissions, which would cause them to pay high carbon fees. S1747 does this by providing extra rebates to residents of communities where driving mileage is substantially higher than the average for the entire state.

Current Status of the Bill

With the 2016 legislative session complete, all bills that were not voted on, including S. 1747, are now null. A new carbon pricing bill will be put forth in the 2017 legislative session.

The last few days of the 2016 session were nail-biters for S. 1747 — here’s a recap:

Due to the Senate’s tight schedule for considering all legislation before the July 31, 2016 session end date, it became clear that there would not be time to consider any energy/climate bills other than the energy Omnibus bill. As a result, Senator Mike Barrett, author of S.1747, the primary carbon pricing bill that Climate XChange advocates, turned S.1747 into an amendment to the Omnibus bill. In collaboration with Barrett and the Campaign for a Clean Energy Future, we made a push in late June to get a majority of Senators to back this amendment. But despite support from a substantial fraction of the 40 Senators, the amendment was not voted on and the bill left the Senate without carbon pricing (read the campaign’s official statement here).

Despite this development, it is clear that carbon pricing made remarkable progress throughout the session, beginning as a “fringe” bill, and becoming a topic talked about regularly in the State House. Now, carbon pricing advocates are gearing up to build an even larger and stronger movement. Through educational events, research projects, and grassroots base building, advocates will hit the ground running when the legislative session starts back up in January 2017.

Bill History

After Sen. Barrett submitted his bill, a powerful campaign arose to push the bill forward. The effort was spearheaded by a coalition called the Campaign for a Clean Energy Future, of which Climate XChange is apart. Climate XChange provided compelling and detailed research that served as the backbone of the campaign, helping to educate legislators and the public. The carbon pricing campaign had many impressive feats over the course of the year. Click below to read about the campaign history.

Resources on S. 1747

Our carbon pricing fact sheets provide an overview of the studies we have done on the ins-and-outs of S. 1747. Check them out!

Other Carbon Pricing Legislation

Senator Marc Pacheco, An Act to protect our environment and reduce the carbon footprint of the commonwealth (S.1786)

“This bill would amend the Global Warming Solutions Act  to require economy-wide carbon pricing, potentially in the form of a cap-and-trade system.  It would rebate 80 percent of the revenues to households and businesses, while using 20 percent of the revenues for climate-change related programs, such as energy efficiency and public transit.”

View the Bill