Editor’s note: This commentary is by Steve May, of Richmond, who is a Progressive/Democratic candidate for the Chittenden-1/Richmond seat in the Vermont House. clinical social worker with an office in Burlington and is the director of VERBIX ‐ The Vermont Basic Income Exchange, a pro‐basic income advocacy organization.
[A]s a small business owner, predictability and cost certainty are essential. That isn’t always possible as a therapist — things can vary widely depending on what else is happening in my clients’ lives. In my work life I deal with the fluidity that goes along with chart reviews, co-pays and deductibles. That’s why the tax side of running my business needs to be transparent and ordinary. For years, plans at both the federal and state level have called for taxing carbon. Frankly, some of these proposals have been better than others. That is to say, better conceived of, in their impacts on ordinary Vermonters. Not every plan is created equal. Cost certainty is absolutely essential. That’s why I have signed on to Energy Independent Vermont’s carbon tax campaign.
Energy independence is a matter of national security. Having control over our energy future is essential in the face of an uncertain world. In order to avoid the kind of pipeline politics that have been all too present in recent years here in our state, we need to break with old frameworks for energy delivery and move to a 21st century energy infrastructure. That means not having to choose between oil trains, which could fall into the Winooski River and leach toxins across the valley, and oil pipelines, which tear up precious pasturelands and meadows in the name of progress. This is a false choice, and we all should name it as such.
One thing is certain — In attempting to assert control over our energy destiny, we are going to have to accept some kind of tax on carbon. It is inevitable that there will at some point be a system that will tax carbon, carbon production and carbon outputs. The proposal for a carbon tax rolled out by Energy Independent Vermont has some elements that are pretty exciting. The revenue raised from a carbon tax under their proposal would be earmarked for a designated fund that would spin off dividend payments to every Vermonter. It would also reduce other taxes (like our regressive sales tax), and create an energy independence fund to increase accessibility to low-income weatherization and energy-saving technology. In effect, this proposal makes all of us partners in a carbon reduction system. This is similar to the way Alaska residents get a dividend back in exchange for the disruption the Alaska pipeline causes to daily life in the state. Just as the Alaska model views oil as a public good belonging to every Alaskan, this Vermont model would identify the harm caused by carbon as a public loss which requires mitigation and that mitigation comes in the form of a dividend check and other incentives.
Taxing carbon also has the effect of turning carbon into a commodity, which with our economic system, may be the best way to deal with pollution more immediately.
The proposed tax is proportionate and should not result in large-scale capital flight out of the state or job losses. In fact, a deeper commitment to a green economy could be viewed as an economic driver. Today, one in 17 Vermonters are employed by the clean energy sector, according to the 2016 Vermont Clean Energy Industry Report, and a climate solutions-geared economy could attract more young people to the state. It also has the effect of creating a significant but not prohibitive effect with regard to travel patterns. If it is essential as part of your work that you need to travel a significant portion of the time or if you have a long commute you will pay more over time, but that’s already the case. On the other hand the more people triggering the carbon tax, the larger the dividend checks will eventually be. Taxing carbon this way will finally provide an economic incentive to adopting a more energy-efficient lifestyle, and add certainty to the business community. Because the carbon pollution tax would be phased in over a decade or so, business leaders will be able to plan for implementation smartly. Taxing carbon also has the effect of turning carbon into a commodity, which with our economic system, may be the best way to deal with pollution more immediately. It creates a value for both the actual carbon and the mitigation of carbon outputs. These two elements are essential to the eventual creation of any cap and trade system. Cap and trade could eventually result in an economic windfall. It is not inconceivable that a cap and trade carbon exchange could be based in Burlington. Setting up a trading floor is nowhere near as intensive or expensive as it was even five years ago. Transaction fees from this exchange could also go into a dividend already set up under the EIV proposed carbon tax bill.
As a matter of public policy we must commit to reducing our energy footprint. This measure is bold. It’s not punitive but it does create a meaningful deterrent to those who might be disproportionately taxing our transportation infrastructure, and it lowers financial barriers to solutions. I encourage Vermonters and candidates for office to educate themselves on Energy Independent Vermont’s principles, and get involved in the conversation to craft an equitable and effective carbon pricing system for the benefit of Vermont’s economy now and into the future.
