Managing Principal, Zaurie Zimmerman Associates, Inc.
Business leaders from throughout the Commonwealth met with State Senator Michael Barrett and economist Marc Breslow today at the Massachusetts State House. The discussion, hosted by the Climate Action Business Association (CABA), was a proactive step for preparing dynamic messaging on the economic impacts of a statewide price on carbon. The goal was to help jump start a movement in the face of foreseeable legislative barriers when Senator Barrett reintroduces his proposed carbon tax legislation in the coming session. CABA has been dedicated to organizing private sector stakeholders for pushing a price on carbon in the Commonwealth. Last year, CABA worked with several partners to support an economic impact assessment of a revenue-neutral carbon tax in the state. The association of businesses lobbied in support of a carbon tax and built a broad base of support for what would be the first statewide carbon tax in the country. For reasons on why a business-led state-level push for a price on carbon is essential, take a look at our recent article in The Hill.
During the recent legislative session, the debate for a price on carbon became a question of the effects it would have on the economy, environment, and the private sector in particular. Participants also inquired as to the potential compatibility of, or synergy that would be possible between a new carbon tax and the currently operating Regional Greenhouse Gas Initiative (RGGI), a cap and trade carbon pricing scheme for large power plants.
Climate change represents a clear risk and huge expense to businesses in the Commonwealth. A carbon tax is a market-driven approach to addressing climate change. With the fee and dividend model supported by CABA, this would neither increase the size of government, nor put our economy at competitive risk. All proceeds ideally would be returned to consumers and producers, including small businesses. In other jurisdictions, such as Boulder Colorado a carbon tax has been implemented with a portion of the funds have been used for energy efficiency, renewable energy projects, and transportation system infrastructure.
In 2008, British Columbia (BC) established a revenue-neutral carbon tax, starting at C$10/ton (USD$9) and increasing C$5/ton (USD$4.45) per year until 2012. By 2014 its fuel consumption had dropped 16% while the rest of Canada has increased 3%. To make the tax revenue-neutral, BC reduced income and corporate tax rates to the lowest levels in North America, creating a favorable environment for businesses. BC’s GDP did not suffer under the carbon tax, with a 1.75% increase from 2008-2012 compared to 1.28% increase for the rest of Canada. CABA will continue to monitor this and other examples and report on lessons learned from them.
CABA looks forward to the opportunity to continue working with Senator Barrett and like-minded legislators and Dr. Breslow, as well as Governor Baker and the Department of Energy Resources and our partners, new and old, as we continue to build a broad-based movement for the first statewide price on carbon in the nation.