For those of us who recognize that the science of climate change is real, this may be the most important news story of the year. China is moving forward with a cap and trade system by 2017.
Of course, there is a lot of work to be done before we know for certain what the program will look like and how effective it will be. But this is the largest polluter in the world taking the single most important step necessary to reduce emissions, by putting a price on carbon. It’s huge news, and alongside the Pope’s visit to the United States, it demonstrates that humanity may indeed be pulling ourselves from the brink of catastrophic climate change.
Carbon pricing, which can be accomplished through either a cap and trade program or a direct fee or tax on carbon emissions, is recognized by almost all economists and policy experts as the central, critical step necessary to wean our economy off of fossil fuels and create the clean energy economy necessary to solve the climate crisis. By making fossil companies pay a cost for their emissions of pollution, putting a price on carbon can hold big polluters accountable for their emissions, while providing an incentive throughout the economy for efficiency and clean energy.
At the same time, putting a price on carbon raises revenue – money that can be used to protect poor and middle class people, either through direct rebates or through investments in efficiency and clean energy that will create jobs and reduce energy costs.
Massachusetts was once a leader on carbon pricing. Massachusetts leadership helped create the Regional Greenhouse Gas Initiative (RGGI), a regional cap and trade program in the electricity sector. Through RGGI, Massachusetts has generated hundreds of millions in revenue from the fossil fuel industry – money that we have wisely invested in energy efficiency programs that have saved consumers billions. According to a recent report by the Acadia Center, the RGGI program has created over 28,000 jobs while reducing electricity prices and creating over $2.5 billion in economic gains for the region.
Moreover, through the Global Warming Solutions Act, Massachusetts has set ambitious mandates for reducing emissions, including a reduction of 80% by 2050. These mandates will never be achieved without aggressive carbon pricing. Massachusetts’ global warming law also authorizes the state to implement carbon pricing to achieve these mandates.
Unfortunately, RGGI only covers electricity, which now represents only about 20% of Massachusetts’ total emissions. If we are going to build on the progress of RGGI, we need to expand carbon pricing into new sectors of the economy, including transportation and the oil and gas used to heat homes and businesses.
Two bills currently pending in the legislature would do just that. An Act to Combat Climate Change, introduced by Senator Barrett, would create a fee on pollution and rebate all of the money back to businesses and consumers. An alternative proposal, An Act to Protect Our Environment and Reduce the Carbon Footprint of the Commonwealth, introduced by Senator Pacheco, would amend the state’s global warming law to require, rather than merely authorize, carbon pricing as part of the state’s climate policy. Senator Pacheco’s bill would also use some of the money raised from the carbon price to fund transportation and clean energy. These bills, and the concept of carbon pricing generally, were both unanimously endorsed at the Massachusetts Democratic Convention in Springfield.
So if you believe that Massachusetts should be leading the world on climate policy, and not falling behind China, and if you want legislators to seize this opportunity to expand this critical policy to reduce emissions and create a clean energy future for Massachusetts, join us and add your name to the voices calling for carbon pricing here in Massachusetts.
-Dan Gatti
follow me @danielsgatti
stomv says
It’s worth noting that EPA’s CPP results in a variety of electric-sector quasi-carbon markets, beginning in 2022. RGGI just so happens to be consistent with CPP, so it is expected that MA will continue to use RGGI (perhaps with slighter mass-based caps and a few other small changes) for CPP compliance. The rest of the country* will have to join RGGI or do their own market-based approach or, extremely unlikely in my opinion, do a non-trade-based carbon reduction scheme.
* 47 states. HI and AK are exempt because they’re electric islands, really unusual exceptions, and data is scarce, and Vermont, because they don’t have fossil units in-state.
historian says
If China is not even trying to address climate, what can little old us hope to do? It’s that kind of defeatism that proves a country’s greatness.