BARRE — A tax on gasoline and heating fuels to cut greenhouse gas emissions could spur economic growth in Vermont, according to a consulting firm’s report.
A coalition of environmental, business, academic and other advocacy groups vowed to campaign and lobby in lock step for a carbon tax during a news conference at the Capstone Community Action low-income service agency’s headquarters in Barre on Thursday. A top Democratic lawmaker was on hand, promising to “push really hard” on the issue.
“For too long, we’ve allowed fossil fuel companies put their waste into our atmosphere for free,” said Paul Burns, executive director of the Vermont Public Interest Research Group, one of several environmental groups leading the carbon-tax charge.
The report found taxing carbon at $50 per ton would reduce emissions by 16 percent by the year 2040. Critics point out that Vermont, which emits less carbon dioxide than any other state, will not be able to turn the tide on climate change alone.
“It’s not about us alone solving the problem of climate change,” Burns said. “Somebody has to demonstrate that this is possible.”
Taxing carbon dioxide emissions at $50 per ton — which would add 45 cents to the price of a gallon of gasoline — would raise nearly $250 million annually by year 10, according to a report by Regional Economic Models, Inc., a Washington D.C consulting firm that assessed the economic impact of a Vermont carbon tax.
The advocacy groups propose that 90 percent of the revenue be used to cut taxes statewide and offer rebates to low-income residents. The remaining revenue would be invested in energy efficiency and electric heating and cleaner automobile technologies.
The excise tax is likely to be placed at the distribution or retail level, which will affect the price consumers pay for gasoline and heating oil, proponents acknowledged.
Matt Cota, executive director of the Vermont Fuel Dealers Association, a trade group likely to be hardest hit by additional fossil fuel taxes, said the policy will be a recipe for disaster, particularly in towns bordering other states.
“There used to be a grocery store in Bellows Falls. There’s no grocery store anymore. It’s sad,” he said. “And much of that has to do with the tax policy out of New Hampshire. People will cross a river for a nickel. They’re going to cross a river to save 45 cents per gallon.”
Gov. Peter Shumlin echoed Cota’s concern at a news conference on Wednesday.
“It’s much more difficult for a small state to do a carbon tax than a region or the country,” he said. “If you have a high carbon tax in a gas station on this side of the Chesterfield (N.H.) bridge and you have no carbon tax on the other side of the bridge, it’s pretty clear where you’re going to go to fill up your tank.
While Shumlin expressed support for a regional tax, he acknowledged that he has not spoken with other Northeastern governors about the idea.
Still, some lawmakers are more optimistic.
House Natural Resources and Energy Committee Chairman Rep. Tony Klein, D-East Montpelier, said he will push to pass a carbon tax in the upcoming legislative session.
“This kind of incentive is not going to cause the end of the world, just like our increase in the gas tax did not cause the end of the world,” he said. “I haven’t heard from legislators that the Connecticut River businesses have been substantially any more negatively impacted by cross-border trade and I don’t expect that that would happen with this initiative either.”
Klein said a carbon tax is a high priority this coming session. He suggested greenhouse gas emissions are at the root of Vermont’s most pressing financial challenges ahead.
“This really is about health care. This really is about property taxes. This really is about the future as you know it,” he said. “I’m going to push really hard on this.”
Rep. Janet Ancel, D-Calais, chair of the House Ways and Means Committee, said she is open to considering the policy. But she called it a complicated issue that is going to take time to understand.
“I think its one of those things that people talk about. But I’m not sure everyone of us understands how it would work and what the various issues will be,” she said.
Hal Cohen, executive director of Central Vermont Community Action Council, said low-income residents drive the least efficient automobiles, live in the oldest and least efficient homes, and often pay the highest amount for heating oil because they can’t or don’t buy ahead.
“[The] energy burden for low-income families is much higher than for other families,” he said.
Under the proposal, all residents would receive the same tax cut. Low-income residents would also receive a rebate, perhaps in conjunction with food stamps or fuel assistance checks.
“We’re looking for ways that this pollution tax will not adversely affect low income people, but would also give low income people the incentive to find ways to save energy.”
The proposal does not apply to electricity generated with fossil fuels. Burns said the the Regional Greenhouse Gas Initiative, a northeastern cap-and-trade program, already puts a price on carbon emissions, and thus it made sense to focus other sources of carbon emissions.
The proposal would only apply to the heating and transportation sectors, and fuel types would be taxed differently based on the quantity and nature of their emissions.
