A panel of experts examined how a carbon fee and rebate system could reduce greenhouse gas emissions and strengthen Massachusetts’ economy on Thursday, Nov. 20 in Johnson Chapel.
The panel’s objective was to hold the oil industry responsible for pollution, reduce greenhouse gas emissions and consider taxing carbon emissions at the state level.
The panel was moderated by Professor Jan Dizard of the departments of American studies, anthropology and sociology and environmental studies. The panelists included Representative Ellen Story, Representative Tom Conroy, Professor of Economics at the University of Massachusetts-Amherst James Boyce, Reverend Margaret Bullitt-Jonas and Dan Gatti, executive director of the nonprofit Climate XChange.
In January 2015, the carbon fee and rebate system proposal will be introduced to the state legislature. If passed, Massachusetts could become the first state in the country to adopt a tax on carbon emissions. The fee would target companies that produce gas, oil and coal, while the revenue from the tax would be returned to households, businesses, nonprofits and municipalities.
This system is labeled under several names: carbon fee and dividend, carbon cap and dividend and revenue neutral carbon tax.
“But the basic idea is the same; what we need to do is put a price on carbon, take the revenues and give it back to the people,” Gatti said.
According to Boyce, there are two ways to address burning fossil fuels: directly restricting carbon emissions and putting a price on emissions. In either case, the policy and message would need to command public support.
“Part of the reframing of the message means moving away from the message that the present generation needs to sacrifice for future generations. It’s a tough thing to pit your present welfare against future generations,” Boyce said.
Approving the carbon tax means that citizens of Massachusetts would have to adjust to the consequences of taxing carbon monopolies for fossil fuel emissions. In response to the carbon tax, Boyce predicted that oil companies will increase the cost of gasoline for consumers.
“We’re going to be jacking up gasoline prices by dollars per gallon over the course of this transition. It’s the most public price in America. How do you get citizens to think that it’s worth paying that price? I think that the rebate is the way to go,” Boyce said.
Members of the panel all agreed that there would need to be a visible flow of money back into the pockets of the citizens. The carbon tax negatively affects those who rely heavily on fossil fuels, while it would benefit those who do not. People who do not produce high carbon emissions will receive profits through the rebate, while the increase in prices will discourage reliance on fossil fuel for heavy users.
The panelists advocated for timely action on climate change and carbon emissions, beginning with the carbon fee and rebate.
“The life-giving air which fills our lungs is the same air into which fossil fuel companies are pouring greenhouse gases as if the climate were an open sewer,” Bullitt-Jonas said.
Boyce said that carbon is an open-access resource and questioned whether legitimate ownership of the limited carbon resources in the biosphere is possible.
“Putting a steep price on carbon and distributing the fee in a way that is fair and just is an essential step in moving toward a fossil-free economy and healing the devastation of climate change,” Bullitt-Jonas said.
Gatti speculated that the construction of a new energy infrastructure with a transition to clean energy would lead to job creation. He also said that a carbon fee and rebate would inspire a wave of investment in clean energy and financially benefit the working and middle classes.
However, the panelists did agree that the carbon fee may be an excessive tax, especially as the working class would spend a larger fraction of their income on fuel.
Audience members additionally asked for clarification on the allocation of the revenue and the fundamental changes that would result from passing this legislation.
Conroy said that the exact allocations are still up for debate, but he believes that a small percentage would be devoted to transportation and clean energy development, while the majority would be given back to the people in the form of rebates.
Story said that at the moment, her most important priority is making the issue something people can understand and talk about. Gatti noted the important role of residents of Massachusetts in this initiative.
“Massachusetts has a unique role in our commonwealth. We’re the state that first recognized gay marriage and put that issue on the national agenda. We believe that this state has a critical leadership role to fight,” Gatti said.
Furthermore, Boyce said that what people pay is based on their own use of fossil fuels and what they receive back is their share of the revenues from the carbon sink. While the payments will be proportional to individual uses of fossil fuel, the payments received will be a lump-sum rebate.
