“More extreme weather is on its way due to climate change. Across the globe, businesses, homes and infrastructure is at risk,” Jen Kimmich, co-owner of the brewery, told a packed House Natural Resources and Energy Committee on Wednesday during a discussion on a carbon pollution tax.
Kimmich and about 200 other Vermont businesses want lawmakers to put a price on carbon pollution as a way to control human-caused climate change. She said she is willing to pay a small tax to help spur emission reductions and allow her business to survive over the long term.
“The key ingredients for making beer — hops, barley and water — are threatened by changing weather patterns,” she said. “The Alchemist’s future hop contracts may be threatened as our farmers prepare for future hop shortages in the Pacific Northwest.”
Carbon tax proposals would require companies to pay for their carbon pollution, which scientists link to global warming and extreme weather events. The price would be higher for dirty fossil fuels such as oil and lower for cleaner fuels such as natural gas. The costs would be passed onto consumers in order to drive the market away from fossil fuels and generate money for investments in renewable energy sources and conservation.
Rep. Tony Klein, D-East Montpelier, who chairs the House Natural Resources and Energy Committee, supports a carbon pollution tax.
“It will make the sector of the economy responsible for what we are experiencing help pay for the damage that they have done,” Klein said.
A carbon tax will not pass this year. Two bills were introduced this session to tax carbon emissions, H.395 and H.412. Klein hopes to vote on a bill by the end of the session. Gov. Peter Shumlin prefers that a carbon tax be levied at the federal level.
H.412, which has 27 sponsors, would use 90 percent of the tax revenue to reduce the sales and use tax, provide a refundable tax credit to personal income taxpayers, create a low-income taxpayer rebate and a per employee rebate to employers. The remaining 10 percent in revenue would fund low-income weatherization and a Vermont Energy Independence Fund (VEIF).
Advocates launched a campaign to gain support late last year, known as Energy Independent Vermont. Economists say the tax would grow jobs and the economy and reduce carbon emissions.
Fuel dealers oppose the tax. A $50 per ton tax on carbon dioxide, for example, is equal to a 45-cent increase on a gallon of gasoline. Dealers are concerned the tax will make gasoline, heating oil, diesel fuel and off-road diesel purchased in Vermont more expensive than in other states.
“A carbon tax is a blueprint for the complete economic devastation of Vermont border towns as consumers flock to the other side to purchase energy or anything which requires energy. Which is everything,” said Matt Cota, executive director of the Vermont Fuel Dealers Association.
Manufacturers who oppose the concept of a carbon tax say positive incentives could achieve the same economic and greenhouse gas reduction benefits as a carbon tax, such as incentives for efficiency measures. The tax could drive businesses out of the state, according to Bill Driscoll, vice president of Associated Industries of Vermont, who represents 500 members involved in Vermont manufacturing.
“If they see the cost of operating in Vermont relative to other locations, (and) the more you edge up the expected cost of operating, the more you are going to incent them to go elsewhere,” Driscoll said.
Businesses like Seventh Generation in Burlington, an environmentally safe household products manufacturer, and the ice-cream maker Ben and Jerry’s, are already planning to pay a price for carbon emissions.
Ben and Jerry’s prices carbon emissions internally at $10 per ton across the full life cycle of its products — from farm to packaging. The revenue has since been invested in electric vehicle charging stations, a solar array at the Waterbury plant and new technologies at dairy farms, such as biodigesters and manure separators, a company representative said.
“Our business has a sizable footprint: about 2 pounds or so of CO2 per pint that we produce. Almost half of the emission associated with each pint come from dairy farms,” said Christopher Miller, social mission activism manager for Ben and Jerry’s.
About 20 pounds of carbon dioxide is produced from burning a gallon of gasoline that does not contain ethanol, according to the U.S. Energy Information Administration.
Seventh Generation is including the potential price of carbon in its financial forecasts, according to Ashley Orgain, manager of mission advocacy and outreach for Seventh Generation.
Seventh Generation supports the tax. Orgain said the tax would not put the international company at a competitive disadvantage.
“We have not found this will be an issue for us dealing with our competition. It positions us to be a brand that is true and authentic and provides our consumers that are increasingly demanding green products with a solution that meets the market demand,” she said.
But Driscoll, of AIV, said many of his members’ products do not rely as heavily on Vermont’s “green” identity.
“Most manufactured goods, for lack of a better way of putting it, are fairly generic in that sense. It’s not relevant for the vast majority of manufacturers,” he said.
Disagreements exist over the cost and benefits of carbon pricing for Vermont businesses, but the tax would be state’s most aggressive attempt at preserving a warming planet, advocates say.
“We can’t have a healthy business on a sick planet,” Orgain said.
