WNPR

Can A Carbon Price Really Catch On?

Feb 2, 2018

Legislators from nine states -- including five in New England -- are calling for a tax on carbon emissions. The idea is to make pollution part of the price of doing business.

The carbon price would slap a fee on fossil fuels like coal, oil, or gas. That fee could be economy-wide -- think at the gas pump -- or confined to one area like power plants.

The idea here is that when it costs more to pollute, people do it less.

Connecticut lawmakers floated this idea last year and it didn’t catch on. But state Representative Jonathan Steinberg said national and international climate trends are raising interest.

“We expect that with each given year we are able to both better educate people -- both consumers and legislators -- on what we’re trying to accomplish,” Steinberg said.

Steinberg and legislators from every New England state except Maine recently announced they’ll raise carbon pricing bills this session. It's something called the Carbon Costs Coalition.

Steinberg said he sees a carbon price as complementary to the Regional Greenhouse Gas Initiative, or RGGI, a cap-and-trade agreement aimed at curtailing power plant emissions.

“This is more of a cap and invest,” Steinberg said. “We want to obtain those funds -- and, ideally, return the most to consumers. But it’s also possible, we could take a small percentage of those proceeds and, for example, focus them on energy efficiency for low income houses.”

During the last session, lawmakers gutted several pools of funding for energy efficiency, sweeping millions of dollars in ratepayer money instead into the state’s general fund.

To date, no U.S. state has a carbon tax. But carbon pricing has taken hold in Canada.

Since 2008, British Columbia has re-invested billions of dollars of carbon revenue into personal income tax reductions, credits, and reductions in corporate income tax rates.

Ken Gillingham, an associate professor at Yale’s School of Forestry and Environmental Studies, said there’s a “clear logic" for American states to approach carbon taxes with an eye toward regionalism.

“Climate change is a collective action problem,” Gillingham said. “If anyone goes alone, the lone wolf isn’t going to be able to do too much. But when you make regional blocs and bring a lot of people together, you can actually make a difference on climate change.”

Representative Jonathan Steinberg said he expects another carbon pricing bill to come before legislators this session, although he’s unsure lawmakers will take it up.

“This is really a process,” Steinberg said. “Once we start knocking down a few states, I think we’re going to really have some momentum.”