By: Brendan Berger, Communications Director for Sen. Barrett and Sam Anderson, General Counsel for Sen. Barrett
Carbon Pricing in Massachusetts
When it comes to calling for action on climate change, there’s no daylight between the U.S. Military and the Pope. A recent Department of Defense report labels global warming a “threat multiplier” for its “potential to exacerbate” challenges for the country. Pope Francis says there is “an urgent need to develop policies so … the emission of carbon dioxide and other highly polluting gases can be drastically reduced.” On this issue, the world’s most powerful military and the Pope are on the same page.
They have good reason to sound the alarm. Everyone — from the poor to the well-off, from the smallest non-profits to the largest corporations — has a stake in protecting the planet. Consequently, we need a solution that enlists every single one of us. With no hint of leadership coming from Washington, Massachusetts needs to step up now, as we have before. This simply cannot wait.
One new proposal gaining steam on Beacon Hill is the most effective step state government can take. The bill, sponsored by State Sen. Mike Barrett, D-Lexington, has received support from business leaders and environmental advocates. The premise is simple: charge the honest price for fossil fuel pollution.
Economists tell us that the current price tag on fossil fuels is too low. What we pay for coal, oil, and natural gas doesn’t account for external effects like pollution and climate change. This leads to overuse. It’s a market failure — a big one.
What’s worse, companies and residents get stuck with the tab anyway. For businesses, these costs add up: higher health insurance payments from excess air pollution that makes people sick; higher property insurance premiums due to increased risk of flooding and big storms; and higher operational expenses to find new ways to work within the changing climate.
If you pay the honest price for fossil fuels, demand for them will go down and so too will these hidden costs. Yes, the idea will mean a higher price upfront for gasoline and heating and cooling fuels. But what’s the cost of inaction?
Fortunately, the proposal wouldn’t hurt the state’s competitive position. Just the opposite. Barrett’s bill would send all the revenue back in average rebates to residents, non-profits, and companies. Because everyone pollutes different amounts, households and businesses that go green can make money. The result: a competitive market in which reducing pollution pays off. No new bureaucracy, no onerous regulation, no rationing.
Carbon pricing is a solution designed to foster competition, ingenuity, and long-term business strategy. If CEOs invest in energy efficiency — insulation at the workplace, a more fuel efficient vehicle — the company, and the planet, win. Even something as simple as a new office policy to make sure the thermostat is off at night will yield profitable results.
Massachusetts is perfectly situated to implement carbon pricing because we import our fossil fuel energy. Spend less on imports and less money flows out of the state economy. That means fewer jobs in fossil fuel-producing places like Oklahoma, North Dakota, and the Middle East, but more jobs here — 4,000 to 10,000 by 2030 according to a recent study.
The carbon fee and rebate proposal is a solution rooted in sound economics that both progressives and conservatives support. It’s an idea that’s won praise from Greg Mankiw, economic advisor to Mitt Romney during his 2012 Presidential bid. And because it’s legally not a tax (the money collected doesn’t fund the operations of government), it’s a proposal a Republican Governor like Charlie Baker can get behind.
Carbon pricing is a recipe that British Columbia has perfected. In 2008, its right-of-center government installed a similar system. Seven years later, GDP is up, emissions are down, and polls show voter satisfaction.
The costs of inaction are monumental. A national price on carbon is inevitable. Let’s start it here.
