2019/20 Carbon Pollution Fee and Rebate Bills

Representative Jennifer Benson, “An Act to Promote Green Infrastructure and Reduce Carbon Emissions” (H2810)

Cosponsored by 95 representatives and 11 senators, this bill creates a carbon fee that starts at $20/ton of carbon dioxide equivalent (co2e) burned and rises to $40/ton over five years.  Seventy percent of revenues generated by the fee are returned to consumers and 30% is invested in a Green Infrastructure Fund.  The fund supports renewable energy, energy efficiency, clean transportation, and resilience projects sponsored by municipalities and the state.

This bill features strong equity provisions including:

  • Rebates are structured to be higher for lower income households and for rural households.  On average, low income households should get back more in rebates than the increase in energy costs while middle income households with average energy costs should break even.
  • Households with higher incomes and those who use a lot of energy will begin to pay a bit more for energy.  This slowly increasing cost is an incentive to conserve and to switch to cleaner energy options.
  • Forty percent of the Green Infrastructure Fund must be used for projects that benefit low income households and low income communities.
  • Ten percent of the revenue generated from the fee on home heating is set aside for Fuel Assistance, providing increased funding for households who need help paying their home heating bill.
  • The bill includes protections for industries that may be highly impacted and a worker transition fund.

View the Bill


Senator Mike Barrett, “An Act Combating Climate Change(S1924 )

Cosponsored by 40 representatives and 25 senators, this bill requires the Governor and his Administration to establish a market-based mechanism to reduce carbon emissions.  The market-based mechanism could be a cap and trade system or a carbon fee.  The bill sets deadlines by which the Administration must put in place the regulations for a new market-based mechanism.

This bill requires any mechanism to price carbon at $15/year in year one and $60 in year five.

Revenues may be used for rebates and/or placed in a carbon pricing trust fund.  Any money placed in a carbon pricing trust fund must be spent:

  • 30% on education
  • 60% on transportation
  • 5% on electric vehicles
  • 5% on environmental justice

The bill states that revenues should be spent so as to mitigate or avoid altogether net financial impact on low income people, rural residents, and unreasonable financial burden on economic subsectors.

Prominent Political  Leaders and Economists Who Support a Carbon Fee   Learn More

Basic Principles for Design of the Massachusetts Carbon Fee and Rebate

The following principles are supported by the coalition and its member organizations.  The carbon fee should be effective at reducing GHG emissions, should be equitable to households, businesses, and institutions, and should strengthen the Massachusetts economy.

1) Sufficient Fee/Tax 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.

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.

3) Economy-wide:
All major sources of GHG emissions should face a significant carbon price, and each source should face a similar price where feasible. For the electricity sector, the price could be that set through the existing cap-and-trade system, the Regional Greenhouse Gas Initiative (RGGI). Alternatively, electricity generators/consumers could be subject to the carbon fee/tax, but with the rate reduced by the amount spent to buy RGGI allowances.

4) 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.

5) 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.

6) 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/taxes. For example, households whose members must drive significantly more than average due to where they live and/or work, and households with high-carbon heating fuels (fuel oil, propane).

7) Further protect all sectors:
Once achievement of principles (4), (5), and (6) is assured, most of the remaining carbon fee/tax revenues should be returned to household, business, and institutional (non-profit, municipal, etc.) energy users.

8) Funding for vital programs:
Use a small fraction of the revenues for government programs that meet essential public needs, reduce greenhouse gas emissions, and create jobs.