Lawmakers forge ahead with carbon tax plan

Sen. Chris Pearson, P-Chittenden. File photo by Erin Mansfield/VTDigger
Less than a week after Gov. Phil Scott nixed a study of a tax on fossil fuels, a group of environmentalists and lawmakers announced they’re pushing ahead anyway.
The ESSEX Plan would capitalize on the fact that Vermont’s electricity comes primarily from renewable sources. The plan aims to make fossil fuels more expensive while cutting the cost of electricity by up to 27 percent.
Proponents say the state needs to make an effort to curb fossil fuel emissions that contribute to the warming of the Earth’s atmosphere. Economists with the Climate Leadership Council have identified carbon pricing as “the most efficient and effective way to reduce carbon emissions” because it changes fossil fuel consumption patterns.
Opponents say that a tax on carbon emissions will hurt poor Vermonters who live outside of Chittenden County and are already at a disadvantage because of the state’s declining rural economy. Low-income rural Vermonters drive more and often live in older homes that have have not been well insulated.
Critics also say electricity can’t supply enough energy to meet the state’s winter heating needs.
Environmental advocates and lawmakers pushed the scheme at a Wednesday afternoon presser in the Statehouse. Nine other Northeastern states have similar legislation in the works.
Sen. Christopher Pearson, P/D-Chittenden, said a carbon tax is the best way to significantly curb fossil fuel use and reduce greenhouse gas emissions.
“I would like to challenge our detractors to bring forward their ideas, how we can meet the Paris goals that are so broadly supported by Vermonters, and the goals we are failing to meet today to reduce greenhouse gas [emissions], which are embedded in state statute and have been for over a decade,” Pearson said.
One prominent carbon-tax opponent, Matt Cota, executive director of the Vermont Fuel Dealers Association, said it makes sense to stick with what works, particularly when it comes to heating homes.
“When it comes to replacing thermal, when you have a situation like this winter — we’re still under emergency conditions, by the way — we cannot electrify thermal,” Cota said.
New energy-efficient heaters called “cold-climate heat pumps” don’t work in deep freezes like the ones that hit the Northeast in December and January, he said.
Vermonters need central heating systems powered by oil, gas and wood fuel to counteract deep cold snaps, Cota said.
In Canada, electric baseboard heaters are common. Two-thirds of Quebecers used heated electric heat in 2011, according to the Canadian government. Vermont enjoys what climatologists call a humid continental climate, which is appreciably warmer than the subarctic climate of Quebec.
Instead of instituting a tax on fossil fuels, Cota said, Vermonters should focus on making homes more efficient, by installing better heating equipment and by better sealing homes against the elements.
That’s what Vermont does with 75 percent of the proceeds from the carbon-pollution program known as the Regional Greenhouse Gas Initiative, according Efficiency Vermont’s communications director Abby White.
Efficiency Vermont oversees the proceeds from RGGI, which exceed $20 million. Seventy-five percent of the money goes to weatherization of low- and moderate-income Vermonters’ homes, White said. The other 25 percent is used to make industrial processes more energy efficient, she said.
The RGGI program uses a cap-and-trade mechanism to limit greenhouse gas emissions from electricity producers in the Northeast. Utilities in participating states are allowed to release a certain amount of carbon emissions. Power generators then bid in quarterly auctions for pollution allowances. The purchased allowances allow the utilities to emit a certain amount of carbon pollution.
Proceeds from the program pay for energy efficiency programs in the 10 participating states, Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island and Vermont.
Vermont produces little electricity from fossil fuel, thanks in large part to deals with the now-defunct Vermont Yankee nuclear plant and Hydro-Quebec. Since 2009, Vermont has received more than $20 million in dividends from RGGI auctions even though the state’s electricity producers pay little into the program.
Critics of RGGI say the cap and trade program adds to the overall cost of power in the Northeast and it’s one of the reasons New England states pay more for electricity overall than any others states in the nation, with the exception of Alaska and Hawaii.
Vermonters’ electricity prices are among the top 10 in the nation. A recent study — and the ongoing lawsuit that resulted from it — alleges that around 20 percent of New England’s electricity costs actually result from price-fixing by two power producers.
Proponents of the ESSEX Plan say their proposal would cut Vermont electricity rates by up to 27 percent, which would place Vermont electric prices much nearer the national median price, in the same range as Kansas and New Mexico.
Republican Gov. Phil Scott has vociferously opposed a tax on carbon pollution. Last week he dismissed a recommendation from his Climate Action Commission to even study the idea.
Scott has said a carbon tax would raise the cost of living in Vermont, and hurt Vermonters who are already struggling.
Karen Lafayette of the Vermont Low Income Advocacy Council. File photo by Josh Larkin.
Karen Lafayette, an advocate for low-income Vermonters, said the poor are often used for political ends, but “there’s a real injustice when it comes to climate change, that those who are least responsible for it will be impacted the most.”
Lafayette says low-income Vermonters will likely be the most harmed by global warming because they will be the first to be displaced by extreme weather events.
The carbon tax would be returned to Vermonters in the form of a lower electricity bill each month. Fifty percent of the money would be directed specifically to low- and moderate-income and rural residents, Lafayette said.
Rep. David Deen, D-Westminster, the chair of the House Committee on Natural Resources, Fish and Wildlife, says his committee Thursday will take up legislation mandating a nonpartisan study of the economic impacts of carbon tax and other pricing schemes.
Deen is one of the sponsors of H.791, spearheaded by Rep. Sarah Copeland-Hanzas, D-Bradford, that would put the ESSEX Plan into effect. The bill is now in the House Committee on Energy and Technology.
On the Senate side, Pearson has introduced a similar bill, S.284, that is now before the Senate Natural Resources and Energy Committee.
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