Dear Charlie Baker, Please Consider a Price on Carbon

Tim Cronin, Policy Associate

Last week at the state’s Municipal Climate Change Summit Baker Administration officials announced an upcoming push to reduce transportation emissions in the state. “Our next target for new policies that will lead to further reductions is the transportation sector and we’re looking forward to rolling up our sleeves and finding solutions” said Secretary Energy and Environmental Affairs Secretary Matthew Beaton.

We urge Governor Baker and Secretary Beaton to consider one policy in particular: placing a statewide price on carbon. Doing so is an efficient, and business friendly way to reduce carbon emissions from the transportation sector.

Background

In the early 2000’s the electricity sector was responsible for the greatest amount of CO2 emissions in Massachusetts. But since entering the Regional Greenhouse Gas Initiative in 2008, a multi-state cap and trade program, Massachusetts has reduced electricity emissions by 65% from 1990 levels.

Now the transportation sector accounts for the largest share of carbon emissions in the state. As recently as 2014, 40% of state greenhouse gas emissions came from the transportation sector. Governor Baker and Secretary Beaton are right to focus on the sector as they look to reduce emissions more broadly.

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Raise the Gas Tax?

One solution is to increase the current motor fuel excise tax. This would drive up the price of gasoline in the state, making it more expensive to drive. The long term effect would be to encourage people to use their cars less, or to transition to electric vehicles (EVs). Either way emissions from the transportation sector would go down.

But increasing the tax would place the burden of reducing carbon emissions unfairly on low-income residence of the state and small businesses.

Carbon Pricing

A better way would be to use a simple, economy wide carbon price on transportation fuels. Similar to RGGI, a carbon price uses a market-based mechanism explained best by our partner organization Climate XChange. Essentially, what carbon pricing does is give households and local businesses better options and outcomes than a gas tax would.

It does this by setting up a fee-and-rebate system that incentivizes households and businesses across Massachusetts to choose how they want to reduce their carbon footprint. The rebate ensures that small businesses and low- and moderate-income households are not unfairly burdened by the fee. They can pay less in fees, and thus come out ahead after receiving the rebate, by doing things like:

• Switching from gasoline to electric vehicles.
• Using more low carbon fuels.
• Using public transportation more, and driving less.

Current Legislation

CABA is currently supporting two pieces of legislation in the statehouse that if passed would put a price on carbon, SB1821 and HB1726. The bills collectively have 79 cosponsors, more than one-third of the legislature, and are currently before the Joint Committee on Telecommunications, Utilities, and Energy.

To find out more about how you can support carbon pricing legislation contact us at info@cabaus.org

About the author: Tim is an economics and politics student at Stonehill College. This past year he had the opportunity to study at Oxford University, exploring global governance, human rights law, and int’l economics. As a senior, Tim will serve as student-body president and continue to fight for sustainable initiatives such as fossil fuel divestment and expanding the college’s solar farm. He has interned at the State House and serves on the board of his local civic association. Tim enjoys reading The Economist, listening to podcasts, and exploring state parks in his free time.