Carbon tax plan calls for broad redistribution of $$$

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STATE HOUSE — Sen. Michael Barrett joined environmentalists and economists in calling for a substantial gas tax increase Tuesday, calling it a “user fee on pollution” and promoting rebates and payouts that would be delivered to all residents.

The proposal, backed by nearly four dozen House and Senate Democrats, would put a financial burden on those who use the most heat and hot water or burn the most gasoline, as the price of those fuels would have a charge added, and the state would then attempt a fair distribution of carbon rebates.

Ann Berwick, the former chairwoman of the Department of Public Utilities, and others took turns stressing the drastic impacts of global warming and what they said would be moderate and positive effects of putting a cost on the emissions contributing to the climate phenomenon.

“Carbon pricing really is just full pricing,” Barrett told the Committee on Telecommunications, Utilities and Energy. The Lexington Democrat said, “The result is to raise the price and that can be a heavy political lift.”

Berwick said every neighboring state except New Hampshire has a higher gas tax than Massachusetts and she said British Columbia has “prospered” after phasing in a similar fee on greenhouse gas emissions.

“We’re not British Columbia right now,” said Sen. Marc Pacheco, a Taunton Democrat who has championed environmental causes. “We have a very different administration that has actually said publicly that they will not adopt a new tax or fee.”

Gov. Charlie Baker has advocated for measures to reduce the cost of energy in Massachusetts, putting much of his focus on electricity, which would be exempt from the additional charge.

Pacheco advised proponents to think strategically about the legislation (S 1747) and their policy goals.

“Boy do I wish we could do it on an international basis,” said Pacheco, who has attended international climate summits. “Maybe ultimately that’s where we will get to it across the whole United States. But I agree we need to be a leader in this area.”

Putting a $10 price on a ton of carbon dioxide emissions in the first year, Barrett’s bill would ramp up the price-per-ton by $5 every year until it hits $40 in year-seven. The bill exempts electricity production plants, which are already under the Regional Greenhouse Gas Initiative’s cap-and-trade program, and it does not put a price on the carbon emitted by firewood, Barrett said.

While insisting that it would not be a tax because it would not pay for general government, Barrett said the policy when fully implemented would put the state’s levy on a gallon of gasoline at 36 cents and a fact-sheet said at that price each resident would receive a $225 annual rebate.

The state’s gas tax is 24 cents per gallon with an additional 2.5-cent fee that is linked to inflation.

Under the bill, the commissioner of energy resources would determine the charges and the rebates for residents and employers. In municipalities where people drive 130 percent or more than the statewide average, residents would receive an “additional motor vehicle fuel rebate.”

Barrett said about 151 towns have been identified as places where residents drive more than the rest of the state, and said the aim of the bill is to use economic pressures without taking a “heavy-handed” approach.

“We want all of us to be mindful users, but the idea isn’t to make life miserable for anyone,” Barrett said.

Barrett said the bill would target transportation, heating and other non-electrical fossil fuel usage that accounts for 80 percent of emissions.

The goal of increasing the cost of certain types of energy could run up against Baker’s goal of reducing energy costs. New England, which imports its fossil fuels, has higher energy costs than elsewhere in the country.

Asked about the effect on gas stations near the New Hampshire border where drivers might be encouraged to fill up over the line, Barrett said he is hoping to work with New Hampshire Gov. Maggie Hassan, a Democrat who is running for U.S. Senate, to implement a New England-wide program. Barrett said Hassan was a supporter of his years ago and he supports her.

The bill would prohibit the money raised from being spent on anything except the rebates and administration of the program, docking the salary of the governor and top cabinet secretaries if the dollars collected “unreasonably exceed” the rebates.

Members of the public packed the committee room, testifying in favor of the proposal before the energy committee chaired by Rep. Thomas Golden, of Lowell, and Sen. Benjamin Downing, of Pittsfield.

Jorge Colmenares, an entrepreneur in the renewable energy sector who said he worked for Exxon about 15 years ago, said European oil and gas companies have called for carbon pricing while American petroleum companies are seeking to prevent such a policy from taking place.

“Where are the U.S. oil and gas companies?” Colmenares asked the News Service.

Sonia Hamel, a former state environmental official, said, “The most important thing is to get a signal sent,” and she said once the business community detects a move toward carbon pricing “decisions start to shift, and that’s really what you’re looking for.”

“Nature doesn’t care whether we get the price right. Nature cares whether we get the emissions down,” said Frank Ackerman, an economist at Synapse Energy.

— Written by Andy Metzger

Copyright State House News Service