The Williamstown Democratic Town Committee has endorsed a bill (SD285) filed in the Massachusetts State Senate by Mike Barrett (D-Lexington) that would impose a revenue-neutral carbon fee that is reimbursed to households and businesses. We did so because we agree that it can reduce greenhouse gas emissions and reduce our state’s dependence on fossil fuels while spurring economic growth. We like the feature of the bill that returns tax revenue to households and businesses in a way that protects low- and moderate-income households and business competitiveness.
By coincidence, in its January 17th issue The Economist also came out in favor of carbon taxes, which the magazine’s editors called “a much better way to reduce emissions of greenhouse gases than subsidies for windmills and nuclear plants” (p. 9). Their broader point was that governments should use the opportunity given us by lower energy prices to price carbon-based fuels at their real cost – that is, including their damage to the environment. Their arguments are persuasive. The time to act is now.
We urge all Democrats in both Houses of the Massachusetts Legislature to support and cosponsor SD285, An Act Combating Climate Change.
Jim Mahon
Chair, Williamstown Democratic Town Committee
We know which way Pro Counsul DeLeo will tell his minions how to vote on this one.
…just for calling DeLeo a proconsul:)
I thought you were an Anglophile. Have you told the House of Windsor* about this change of affiliation?
* nee Saxe-Coburg-Gotha
Pointing out the Windsor name change reminds me of the Kaiser’s reaction to it. He commented that he looked forward to seeing Shakespeare’s “Merry Wives of Saxe-Coburg”! With 5 years between high school and college Latin is the closest thing I have to a second language, so that’s where my Roman interests come from.
One unfortunate side effect of the decision to hold oil at a 50 dollar a barrel price point is that it also undermines economic rationale for reduced carbon alternatives.
Obviously, a transition to a post fossil energy operations mode has its own higher value. But our fellow monkeys who follow money aggressively from tree to tree are not feeling it.
Another way to look at it is that it’s far easier to implement a fuel tax when the price of the fuel is perceived as being low relative to recent pricing. (shrugs)
This will be a strange phase. The Saudi’s are determined to impose this lower price point and it has already wiped out the hedge funds that added an estimated 30% to the price through commodity speculation moves.
And it is tanking many of the riskier and more expensive oil plays and regions.
The other hazard may be a deflation spiral which is said to be more of a threat to economic stability than inflation.
Here’s one item I spotted today that was sort of useful for a situation summary.
http://www.foreignaffairs.com/articles/142333/robert-mcnally-and-michael-levi/vindicating-volatility
… The Saudis are determined that Vladimir Putin should suffer, and that, through this suffering, Iran and Hamas are tamer. They aren’t wrong in this.
I don’t think so. The authors are so intent upon patting themselves upon the back they see neither the forest nor the trees. Sanctions remain in place against both Iran and Russia. Saudi Arabia is taking some losses in order to assist in this. Price volatility was clearly predictable from these variables only in the last year… as well as from other factors. The authors 2011 speculation is just that — speculation — and has aligned with reality only accidentally.
We’ve got a standard of living. It requires substantial amounts of energy.
For the sake of argument, there are three places we can get it, each with its own limitations:
* fossil fuels
* renewables
* energy efficiency
Now, here’s the thing: there are energy efficiency investments (and, in some cases, renewables), where the societal financial savings exceed the cost, but for which we can only capture with structural investment. For example, if you install LED bulbs, you save on your bill — but society (and, hence, other ratepayers) save because of avoided transmission and distribution capital costs and line losses, because of avoided new generation capacity costs, because of price suppression effects, because of avoided environmental compliance costs, and so forth.
And so, my point is: reserving some of the money paid in fees to reduce the carbon output of the energy system will result in more wealth returned to the citizenry than if we return all the carbon fee directly.
The goal isn’t to redistribute wealth. It’s to drive down carbon emissions. Using (some) of the revenue to cut directly at that goal, through a variety of possible means including but not limited to
* electric and gas energy efficiency programs
* R&D investment in EE, batteries, and RE
* transmission upgrades to access low cost RE
* public transit and commercial rail
is a more effective method than merely attempting to use a price signal. And, by the way, there is prior art, too. The RGGI states all take some of the electricity carbon tax proceeds and use it for EE and RE investments. Massachusetts is a real leader here, and the result is lower usage, lower bills, and more jobs.
Bottom line: asking that the revenue be simply returned back to the citizenry in whole cloth suggests a weak bargaining position, a disbelief in the effectiveness of government, and a misunderstanding of the ability of focused investment in driving down carbon emissions in a way “the market” simply can’t do with price signals.
It has lots of substance with a deft touch of style. It is data driven and a gift from someone who works in the field. And it cuts to the chase as succinctly as one could expect given the weight of the subject.
With this windfall of money I could almost support an increase in the gas tax with the extra money going to infrastructure repair. Better roads, less traffic jams, smarter traffic flow controls,etc which would also lead to fewer emissions. Index the tax to fall if the price of oil goes back to $100 a barrel, for example at $50 the tax is .30, at $75 is .20, $100 it’s .15, at which point it would never go over .15. The problem is the administration of this belongs to the same people who said the Mass Pike would be free after it was paid for.
The problem with the carbon taxes as they are implemented right now is that they exclude some of the extra “bonus” carbon emissions that result from natural gas infrastructure from consideration. Natural gas pipelines emit methane — and so do the compressor stations. For example 70 million cubic feet of methane was released in a “blowdown” incident in Searsmont maine on a two hour period on Dec 31, 2013. Does this methane contribute to climate change? You betcha. The impact of methane is actually 86x the impact of carbon on a 20 year period.
But the state only counts methane leakage that occurs within state borders under the GWSA and under RGGI rules the methane leakage is ignored completely.
Given the push to massively overbuild natural gas pipelines it is important for the state to correct the favored status given to natural gas and include much more of the “fugitive emissions” from fossil fuel production — before enacting a carbon tax that will further banish easily storable heating oil in favor of natural gas as a so-called bridge fuel. Instead of transitioning to natural gas and spending $9 billion on three new pipeline projects (hey we might need a $1 billion investment but we surely do not need to spend $9 billion) — there should be a transition directly to renewable energy an in particular wind and battery storage that can help us some more with New England winters.