Let's Pass Common Sense Carbon Pricing in Massachusetts

Co-authored by Cindy Luppi, New England Director for Clean Water Action.

When Massachusetts decided that same sex marriage needed to be legal, it was viewed askance across much of the country - a novelty that wouldn't travel well. And when a Republican governor named Romney worked across the aisle to pass a sweeping first-of-its-kind affordable healthcare act, that idea was also seen as most likely a one-off.

Today, 37 states have same sex marriage, and affordable healthcare based on the Massachusetts model is the law of the land.

Massachusetts has a chance to lead again, this time on what is arguably one of the most pressing issues facing our country, and our globe - climate change. Two bills in the Massachusetts Legislature could make the Commonwealth the first state in the nation to pass a carbon fee and rebate bill, creating a market-driven system that will benefit both the environment and the economy. It already has the support of many clear-thinking business leaders, and may just be acceptable to the Bay State's latest Republican governor as well.

The science is clear: greenhouse gases - particularly carbon dioxide - are the main cause of climate change. In Massachusetts, nearly all of the carbon dioxide (CO2) pollution that causes climate change comes from burning fossil fuels such as natural gas, gasoline, oil and coal.

Two proposals in the Massachusetts State House would impose fees on the companies that import fossil fuels into the Commonwealth, creating an incentive for both fossil fuel suppliers and consumers to use cleaner fuels and to be more energy efficient. One bill would establish a dedicated fund, and then charge importers a fee based on the carbon content of the fossil fuels they bring over the border. This is similar to the fees that companies currently pay throughout the U.S. to obtain permits for emitting sulfur dioxide and nitrogen oxide pollutants to the air. To keep the costs of living and doing business as low as possible, the fees going into the fund would then be directly passed on directly to the residents and employers of Massachusetts. Each resident would receive an equal benefit, so that on average low- and moderate-income households, who use less energy than higher-income residents, would come out ahead. In addition, because the size of the benefit would not be linked to the fees paid, all households and businesses could save money by using less fossil fuel.

At the same time, businesses, nonprofits, and municipalities would receive a dividend based on their share of the state's employment. Important protections would be given to people living in rural communities and to businesses that could be disproportionately affected. Another State House proposal follows a similar model, but provides additional investment in the Commonwealth's growing clean energy sector.

We already know that this kind of carbon pricing works. It encourages residents and businesses to use cleaner energy because they will pay fewer fees by consuming less fossil fuel. At the same time, it stimulates investment in the increasingly important clean energy sector, creating more jobs throughout Massachusetts. In a 2014 study commissioned by the Massachusetts Department of Energy Resources (DOER), the nonpartisan consulting firm Regional Economic Models Inc. estimated that it could mean thousands of additional jobs for the state.

Carbon pricing also helps cut the pollution that harms our health, our country, and our planet. The DOER study found that by 2035, this policy could substantially reduce Massachusetts' greenhouse gas emissions to as low as 80 percent of 1990 levels, from the current 89 percent.

Carbon pricing is already working in the real world. In Canada, British Columbia has experienced a remarkable transformation since it passed carbon pricing in 2008. Fuel consumption there is down by 16 percent, compared with a 1 percent increase in the rest of Canada. The clean energy sector in the province has grown considerably, and the policy enjoys majority support. Moreover, since 2008, British Columbia's economy has outperformed the rest of the country.

In fact, carbon pricing has become the new normal around the world. By next year, more than half of the world's output will be produced in places that have some form of carbon pricing. The United States lags behind in implementing a carbon fee and benefit model, which is why Massachusetts and a growing number of interested states can play a leadership role in introducing this policy - and its many benefits - to the rest of the United States.

Massachusetts' Global Warming Solutions Act of 2008, legally mandates the state to reduce greenhouse gas emissions to 25 percent below the 1990 level by 2020, and to at least 80 percent below the 1990 level by 2050. While we are making progress, we are not on track to meet those mandates. A carbon fee and benefit model is the single most effective policy that Massachusetts can implement to meet those requirements.

Massachusetts has always been a leader when it comes to championing innovative ideas and legislation. Let's take this opportunity to show the rest of the country that the United States can address one of the greatest threats of our time while boosting the economy and energizing an emerging sector. Let's pass common sense carbon pricing.