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Curb Climate Change: Putting a Price on Carbon

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ASBC Policy manager Eliza Kelsten discussed state-based carbon pricing proposals with VT State Representative Sarah Copeland-Hanzas and MA State Representative Jen Benson.

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Curb Climate Change: Putting a Price on Carbon

  1. 1. Curb Climate Change: Put a Price on Carbon
  2. 2. Climate change presents massive threat  US GDP lost to climate change will likely equal $44 trillion by 2060  Without action, average annual temperatures in the Northeast could rise between 5.3 degrees and 9.1 degrees Fahrenheit by 2071  Boston and other New England communities are likely to see about a 25 percent higher increase in sea level rise than other areas  A recent study found a connection between the timing of extreme warming in the Arctic and the worst weather in the U.S.
  3. 3. State action is required to meet emissions reductions goals  Many businesses are already taking individual action, but it is not enough  State-based policy solutions are necessary in order to keep warming below 2 degrees C  All New England states have set significant emissions reductions targets and need comprehensive policies across all sectors to meet them  The Carbon Costs Coalition, a group of legislators from 9 states, is working to pass market-based climate policies, like a price on carbon, that reduce emissions, promote regional cooperation, and create jobs
  4. 4. What is a carbon price?  A carbon price internalizes the cost of greenhouse gas emissions by assigning a monetary value to each ton emitted  The price can be implemented at different points throughout the supply chain  Revenues can be returned to citizens and businesses through dividends to help offset higher prices and/or invested to further reduce emissions, promote resiliency, and create jobs
  5. 5. Benefits of a carbon price Reduce emissions 1 Promote fair competition 2 Spur innovation and job creation 3
  6. 6. Rep. Jennifer Benson State Representative Jennifer Benson has served in the Massachusetts House of Representatives since 2009, and currently serves as the Chair of the Joint Committee on State Administration and Regulatory Oversight. In addition to chairing the Committee, Representative Benson sits on the National Board of Directors for Women In Government. This session, she filed ambitious carbon pricing legislation that has gained more than 50 cosponsors and the support of leading environmental and energy advocacy organizations.
  7. 7. CARBON FEE: LEGISLATION An Act to promote green infrastructure, reduce greenhouse gas emissions, and create jobs (H.1726) – Sponsored by Rep. Jennifer Benson  Puts an initial fee of $20/ton on carbon dioxide, raises it to $40/ton over 4 years  20% of fees go into a Green Infrastructure Fund for use in transportation, clean energy projects, and climate change preparation  80% of fees go back to consumers and employers, with protections for low and moderate income households
  8. 8. CARBON PRICING: REBATES H.1726 rebates 80% of fees back to consumers and employers, with protections for low and moderate income households  Low and moderate income households would receive higher rebates  Rural residents dependent on cars would receive higher rebates  Employers’ rebates would be based on their number of employees  Most business sectors would come out about even  Businesses that face strong competitive pressures from outside the state would receive higher rebates  Consumers and employers can spend this rebate on anything, but the hope is that they will spend some of it on energy efficiency improvements
  9. 9. CARBON PRICING: GREEN INFRASTRUCTURE FUND H.1726 puts 20% of revenue into a Green Infrastructure Fund  Fund would be spent on infrastructure and green energy projects  Transportation  Climate change resiliency  Energy efficiency  Would raise approximately $250 million per year  Communities with median incomes in the bottom 33% would receive at least 1/3 of investments
  10. 10. CARBON PRICING: WHY REVENUE POSITIVE? Massachusetts is struggling to meet the emissions reduction targets set by the Global Warming Solutions Act (GWSA) of 2008  1990 benchmark is 94 million metric tons of CO2 equivalent (MMTCO2e)  We’re on track to meet 2020 target of 25% reduction below 1990 levels  <71 MMTCO2e  We’re in danger of missing 2050 target of 80% reduction below 1990 levels  <19 MMTCO2e  To meet the 2050 target, Massachusetts needs to take bold action  A revenue positive carbon price that puts a significant amount of resources into renewable energy projects can be part that bold action
  11. 11. DOWNTOWN BOSTON 2018
  12. 12. SCITUATE, MASSACHUSETTS 2018
  13. 13. CARBON PRICING: THE EVIDENCE Study found that British Columbia’s carbon fee has cut emissions by about 10% since 2008  Study also found there have been no negligible effects on the economy1 Since RGGI was formed in 2009, emissions from electricity generation in RGGI states have been cut by almost 50%  At least half of this reduction is directly attributable to RGGI2 Harvard University study estimates that introducing a carbon fee in MA would save hundreds of lives and $2.9 billion in health care costs by 20403 A study estimates that if a national carbon fee were established, in just 10 years, the benefits would be:4  2.1 million more jobs  33% reduction in carbon emissions 1. British Columbia’s Revenue-Neutral Carbon Tax. Duke University and the University of Ottawa, 2015. 2. Why Have Greenhouse Emissions in RGGI States Declined? Duke University, 2015. 3. Air Quality and Health Co-Benefits of a Carbon Fee-and-Rebate Bill. Harvard University, 2017. 4. Economic, Climate, Fiscal, and Power Impact of a National Carbon Tax. Regional Economic Models, Inc. (REMI), 2014.
  14. 14. State Representative Sarah Copeland- Hanzas represents Orange County’s 2nd district in the Vermont state legislature. She owns a small business in Bradford, The Local Buzz Café, and is a former public school teacher. Rep. Copeland- Hanzas was first elected in 2004, and she is the lead sponsor of H.791, a proposal to put a price on carbon refunded through electricity bills, in the VT House. REP. SARAH COPELAND-HANZAS
  15. 15. Business Leaders Environmentalists Low-Income Advocates Policymakers ESSEX Collaborators
  16. 16. 0 2 4 6 8 10 12 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038 2040 2042 2044 2046 2048 2050 MMTCO2e Vermont GHG Emissions 1990- 2050: Actuals, Trend and Goals Paris Goal Comprehensive Energy Plan Goal Statutory Goal Actuals Trend
  17. 17. Vermont vs. U.S. Emissions, 2013 Transportation 42% R/C/I (Heating) 28% Electricity 9% Transportation 27% R/C/I (Heating) 24% Electricity 31%
  18. 18. 0 10 20 30 40 50 60 70 80 Per-capita electric power sector generated emissions, 2015 metric tons carbon dioxide per person
  19. 19. $1,056 $438 $- $200 $400 $600 $800 $1,000 $1,200 Gasoline ($2.64/Gal) GMP ($0.1564/kWh) Cost/10,000 miles in Vermont: 25 mpg Internal Combustion Engine vs 0.28 kWh/mile EV
  20. 20. 0% 50% 100% 150% 200% 250% 300% 350% 400% Vermont Electricity: Predictable & Stable Percentage Change in Gasoline & kWh Rates Since 1994 Gasoline Electricity
  21. 21. • LOWER ELECTRICITY BILLS • LOW-INCOME AND RURAL EQUITY • A STRONGER ECONOMY • CLEANER AIR GOALS
  22. 22. STRATEGIC ENERGY EXCHA PRICE CARBON POLLUTION FY19 FY20 FY21 FY22 FY23 FY24 FY25 FY26 SLASH ELECTRIC BILLS
  23. 23. LOWER ELECTRICITY BILLS
  24. 24. Business Rebates 50% Per kWh Rebates 25% Low-Inc Rebate 12.5% Rural Rebates 12.5% Residential Rebates 50% Sales MONTHLY REBATES
  25. 25. A STRONGER ECONOMY $$$ CURRENT ESSEX
  26. 26. 0 2 4 6 8 10 12 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038 2040 2042 2044 2046 2048 2050 MMTCO2e ESSENTIAL FOR MEETING OUR GOALS Actuals Trend
  27. 27. • LOWER ENERGY BILLS • LOW-INCOME AND RURAL EQUITY • A STRONGER ECONOMY • CLEANER, HEALTHIER AIR OUTCOMES
  28. 28. Questions?
  29. 29.  For more information or to join our coalition of businesses working to put a price on carbon, go to carbonprice.asbcouncil.org  Email Eliza Kelsten, ekelsten@asbcouncil.org

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