Carbon Pricing 101

Samuel Niiro

With the Trump administration in denial about climate change, let alone the need for urgent climate action, it’s up to the states to take the lead on curbing carbon pollution. Here in New England, such leadership is nothing new. Massachusetts passed first-of-its-kind legislation to limit emissions back in 2008 and all six New England states have been part of the nation’s first cap-and-trade program since its launch in 2009.

Washington’s failures only shine the spotlight more brightly on local action, and climate activists and everyday citizens are rising to the challenge. One legislative approach being put forward to lower climate-damaging emissions is carbon pricing and it looks likely to be a big subject for debate in 2018.

What is Carbon Pricing?

The concept behind carbon pricing is simple. Each time we burn a fossil fuel and release greenhouse gases, it has a measurable effect on the world around us. More greenhouse gases in the air mean poorer air quality, higher temperatures, rising sea levels, and countless other dangerous consequences – in other words, climate change (or, perhaps more accurately, climate disruption).

Researchers have put a price tag on these emissions: every ton of carbon dioxide we put into the air does at least $40 worth of damage, from negative health effects to environmental destruction, and more. Yet none of these costs are factored into the price of gasoline for our cars, for example, or of the oil or natural gas we use to heat our homes.

Carbon pricing brings the price of fossil fuels more in line with their true cost to our environment, our economy, and our health.

Carbon Pricing Lowers Damaging Emissions

We already know that carbon pricing works. In the Canadian province of British Columbia, carbon pricing helped to reduce climate-damaging emissions without harming business growth, But we don’t actually have to look that far for a successful example of carbon pricing, because it’s already working right here at home.

About 10 years ago, CLF helped push for the creation of the first carbon pricing program in the U.S., the Regional Greenhouse Gas Initiative, or RGGI, which created a carbon market for electricity producers in New England, as well as Delaware, Maryland, and New York. Power producers across the region now pay and trade for the right to emit specific amounts of carbon dioxide, the greenhouse gas primarily responsible for climate change. Since RGGI’s implementation, the states involved have seen a drastic reduction in greenhouse gas emissions, while continuing to experience economic growth – debunking the Trump administration’s claims that what’s good for the environment is bad for business.

Why is Carbon Pricing Coming Up Now?

Carbon pricing is an attractive policy for a variety of reasons, but its current popularity is as simple as this: a coalition of activists, politicians, and ordinary New England residents has come together to push for carbon pricing across the region. Groups like Massachusetts’ Campaign for a Clean Energy Future, Energy Independent Vermont, and Energize Rhode Island, all of which CLF supports, have brought together citizens and politicians to push for carbon pricing in their respective states. When I sat in on a legislative hearing for carbon pricing in Massachusetts earlier in July, the room was packed to the rafters with ordinary citizens there to ask lawmakers to put a price on carbon pollution.

The details of carbon pricing proposals vary from state to state:

  • Massachusetts has two bills (here and here) proposing what are called fee-and-rebate plans, which take the revenue from carbon pricing and return it directly to residents and businesses as a lump-sum payment. A third bill would empower state government to enact a carbon price if Massachusetts fails to meet its mandated 2020 emissions reductions targets.
  • In Vermont, a group of legislators introduced four different proposals, each of which uses the proceeds from a carbon price in a different way – for instance, to eliminate the sales tax or fund public schools. CLF supports Energy Independent Vermont’s push for carbon pricing.
  • Connecticut and Rhode Island also introduced legislation in the last session that would implement carbon price and rebate plans.

The exact details of each these proposals might change between now and the next legislative sessions, but the coalitions behind them aren’t going anywhere. (These same four states all pledged to uphold the goals of the historic Paris climate accord after the Trump administration announced it would pull the U.S. out of the agreement!)

How can I support carbon pricing?

You can get involved in the push for carbon pricing in many ways. In Massachusetts, lawmakers and citizens testified at a legislative hearing about the importance of carbon pricing for their constituents and communities. Energy Independent Vermont holds talks and workshops about carbon pricing. The kind of events you can attend and advocacy you can get involved in will vary from state to state. And, of course, you can also sign up for CLF’s newsletter and action alerts, so that you’ll be first to get the latest news on efforts in your state.

The most important way to support carbon pricing, though, something everyone can do. It’s as simple as calling up your local legislators and letting them know that you want them to support sensible, effective solutions to reduce emissions and improve New England. Your politicians need to know that their constituents support carbon pricing, and that’s as easy and significant as calling their offices or writing them a letter.

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Climate Change

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