2017/8 Carbon Pollution Fee and Rebate Bills

Reflecting growing political support for economy-wide carbon pollution fee and rebate, new bills have been introduced in the Massachusetts Legislature for the 2017-18 session that would put a price on carbon pollution.

Senator Mike Barrett, An Act Combating Climate Change (S. 1821)

Senator Mike Barrett (D-Lexington) is sponsoring S.1821, “An Act combating climate change,” similar to last session’s S.1747 which had the support of nearly one-quarter of the legislature (47 co-sponsors). It would establish a common-sense fee-and-rebate system of carbon pollution fees charged to fossil fuel importers. The revenues from those fees would go into a dedicated fund, from which each state resident would receive an equal rebate, and employers would get rebates based on their number of employees. All the funds would be used for rebates, in order to minimize any increased costs in living and doing business. Since low- and moderate-income households tend to use less energy than wealthier ones, on average they would come out ahead, but everyone would have an incentive to reduce their use of fossil fuel in order to pay less in fees.

Representative Jennifer Benson, “An Act to promote green infrastructure, reduce greenhouse gas emissions, and create jobs (H.1726)

Representative Jennifer Benson (D-37th Middlesex) is sponsoring H.1726, “An Act to promote green infrastructure, reduce greenhouse gas emissions, and create jobs.” Like Senator Barrett’s bill, it would establish a carbon-fee-and-rebate system and assure that low- and moderate-income households would come out ahead or even. But Benson’s bill would use 20 percent of the revenues to fund green infrastructure directly, including transportation improvements, renewable energy, energy efficiency, and protection against the expected impacts of climate change.

In addition, two other bills dealing with energy-related matters include carbon pricing provisions:

• Senator Marc Pacheco (D-Taunton), is sponsoring S.479, “An Act relative to 2030 and 2040 emissions benchmarks.”  As part of a bill to assure compliance with the state’s Global Warming Solutions Act (GWSA), it would authorize the Commonwealth to “create, expand, or join market-based compliance mechanisms, including but not limited to greenhouse gas emissions trading and carbon pricing programs,” in order to achieve the greenhouse gas emissions reductions required by the GWSA.

• Rep. Solomon Goldstein-Rose (3^rd Hampshire), is sponsoring HD. 1948, “An Act relative to creating energy jobs.”  As part of a larger initiative to make Massachusetts “the Silicon Valley of the new energy economy,” Goldstein-Rose’s bill also would establish a carbon-fee-and-rebate system similar to that in the Barrett and Benson bills.

Urge Governor Baker to support a price on carbon pollution in the Commonwealth

Analysis from the Massachusetts Department of Energy Resources demonstrates that carbon pricing has the potential to deliver the largest carbon pollution reduction of any policy WHILE increasing local job creation. By putting a price on carbon pollution, we would enable Massachusetts to set a precedent that will preserve our legacy and a healthier future for our children and generations to come. To combat the effects of climate change, keep billions of energy dollars local, create new jobs, and reduce health care costs through reduced air pollution, urge Governor Baker should support carbon pollution pricing and rebate legislation.

What Happened in MA with Carbon Pricing in 2015-2016

Over the course of this legislative session, we have built a vibrant movement for carbon pricing in Massachusetts and made remarkable progress in the legislature. Carbon pricing is now far better understood and has much greater support within the state legislature. Senator Downing, principal author of the Senate’s version of an Omnibus energy bill that addresses several aspects of energy policy, has repeatedly cited carbon pricing as being a vital future step to address the climate crisis.

Due to the Senate’s tight schedule for considering all legislation before the session ends July 31, it became clear that there would not be time to consider any energy/climate bills other than the Omnibus bill. As a result, Senator Mike Barrett, author of S.1747, the primary carbon pricing bill, attached the bill as an amendment to the Omnibus bill. We pushed in late June to get a majority of Senators to back this amendment and came very close, but in the Senator Barrett decided to withdraw the amendment. (Read our statement about the amendment here). With the legislative session ending on July 31, carbon pricing will not move forward in the 2015-16 session.

We are now gearing up to build an even larger and stronger movement for carbon pricing. Through educational events, research projects, and grassroots base building, we will hit the ground running when the legislative session starts back up in January 2017. Learn more here about how you can join us!

Senator Michael Barrett testifying in favor of S.1747 on October 27, 2015 before the Joint Committee on Telecommunications, Utilities and Energy

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. The carbon fee/tax 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.