So the SJC has decided that there’s absolutely no way for the state to wriggle out of the emissions caps in the 2008 Global Warming Solutions Act. Seizing the moment, some Senators are reviving interest in the cleanest, most economically-efficient and free-market-y way to drive down emissions: A carbon fee:
Under questioning from State Sens. Marc Pacheco, D-Taunton, and Michael Barrett, D-Lexington, both of whom support carbon pricing, at a hearing of the Senate Committee on Global Warming and Climate Change, Suuberg said, “We’re going to take a look at all of the strategies.”
Although Suuberg said carbon pricing, in which residents and businesses pay for the amount of energy they use, raises “cost issues,” but he declined to rule it out entirely before the administration has examined all its options. “We’re looking at everything right now,” Suuberg said. “We want to make sure we’re looking at the most cost-effective measures.”
Sen. Barrett’s refundable carbon fee — with proceeds going back to the public in the form of refund checks — is the approach favored by conservative economists like Greg Mankiw and former GOP Rep. Bob Inglis — in other words, people who recognize climate as an enormous concern, but distrust the ability and power of government to make decisions about allocating resources. If you drive up the price of carbon, people will find a way to avoid paying it, putting renewables on an equal footing with dirty fuels. The Citizens Climate Lobby has been pushing this for some years now. There is one that exists in British Columbia right now, and it has worked well at driving down emissions, with seemingly minimal economic disruption.
There are many concerns and complications with this approach.
- How do you equitably refund the proceeds? Is it fair? Is it regressive? Structure matters.
- There’s a good argument that the proceeds would be much better spent on efficiency programs, creating a virtuous cycle driving down emissions.
- If a tax/fee can be passed, it can be repealed. This happened in Australia. For all that cap-and-trade is messy and involves vested interests of all sorts, that web of permits, contracts, tax credits, etc. keeps stakeholders invested (literally) in its permanence and success. A carbon tax is a more of a pure political play, and constituencies can and do change their minds.
On the other hand, it may be that people come to enjoy the refund check from the state more than they mind paying the tax. In that case it becomes a politically safe “entitlement”, like Social Security. Keep your government hands off my carbon refund!
It’s funny how things work in politics: You work on something for years and years, nothing happens, it seems futile … and then suddenly the window of opportunity opens. Is this the moment for the carbon fee? Would the Governor support it? The Speaker?