Editor’s note: This commentary is by Roland Marx, who is the co-founder of Boardman Hill Solar Farm and the winner of the VECAN Energy Project of the Year in 2015 and the Governor’s Award for Environmental Excellence in 2016.
[T]his Green Fuel Cap plan addresses carbon pollution in Vermont’s biggest energy-use sectors — transportation and heating — through a “cap” on high-carbon-content fossil fuels that are imported into the state by major oil companies. This “cap” will result in a very significant decrease in greenhouse gas emissions of at least 30 percent, and will do so with absolute certainty, and with no tax, and at no cost to Vermonters. This plan also provides substantial funds for support, incentives and strengthening of Vermont’s clean energy and energy efficient economies.
• The policy to reduce greenhouse gases emissions is to put a “cap” on the fossil fuels imported into the state by “upstream” oil companies.
This plan targets the biggest energy-use sectors, transportation and heating, which account for over 70 percent of greenhouse gas emissions, which need to become much more efficient and renewable, and which will be made to be so.
The greenhouse gas emissions cap is on all fossil fuels in the transportation and heating sectors, all of which are high carbon content, and all of which are imported into the state by distributors for the major oil companies. This cap is a limit on the amount of fossil fuels that can be brought into the state. It is not a tax. It is a limit on the amount that can be brought in.
The Green Fuel Cap makes a progressive reduction in the fossil fuel cap of 4 percent per year, which is pegged to achieve the Paris agreement goal of -28 percent by 2025. This means there are less fossil fuels allowed to be distributed in Vermont each year, about 4 percent less than the previous year. And this reduction could be made even greater.
This cap applies to the amount in gallons of gasoline, diesel and heating oil imported from out of state by oil company distributors. So the cap limits the amount of fossil fuel brought into Vermont, which limits the fuel supply, and therefore limits greenhouse gas emissions.
This plan is uniquely a Vermont approach, as our state is rural, has little industry, and has no fossil fuel sources. All fossil fuels consumed in Vermont come from out of state, so all profits go out of state, with little benefit locally. Reducing Vermont’s dependency on these dirty fuels is both an economic and environmental necessity.
There are 100 or so companies that import and distribute fuel in Vermont, a very limited and manageable number to control, and they need to report the amount of fuel they bring in. This makes for administrative simplicity and cost effectiveness
This plan excludes an increasing percentage of polluting fuels from entering the state. That’s all to the good, right? Let’s be quite clear. This is not a tax. There is no tax. There is no assessment and no cost to Vermonters. It is pure and simply a cap or brake on the amount of dirty polluting fuel allowed to come into the state from outside.
The result is a guaranteed certainty that greenhouse gas emissions will decrease, that health concerns will diminish and that the Vermont economy will benefit.
We could leave it at that and know that we have made major progress against carbon pollution. Yet we suggest adding a revenue source.
• Oil companies should pay for “offsets” for carbon pollution they create, with revenues going to help grow Vermont’s clean energy and energy efficient economies.
Companies that distribute out-of-state fossil fuels from ExxonMobil, Gulf Oil, BP, Royal Dutch Shell and others will be required to purchase allowances to offset the carbon content and eventual greenhouse gas emissions from the gasoline, diesel and heating oil they distribute. These “offsets” could be priced at $10 a ton and increase over time until reaching the social cost of carbon of $40 a ton.
It is possible that the “upstream” oil company distributors would try to pass on some costs of offsets to “downstream” consumers, but at their peril, since this would be a price increase for the commodity, and not a tax, and adverse consumer reaction would reflect on them.
The proposed “offset” policy is similar to the cap-and-trade program used in the Regional Greenhouse Gas Initiative (RGGI), a cooperative effort in Northeastern states including Vermont to reduce greenhouse gas emissions by large fossil fuel electric power generators. A 2013 RGGI comprehensive review resulted in a revision to a 45 percent reduction in the emissions cap, evidence that the program is workable and effective.
Proceeds from the “offsets” program would be a huge stimulus to the Vermont economy, with funds available to support or provide incentives for many local Vermont clean energy and energy efficiency projects, including:
• increasing the number of electric vehicles in Vermont from 2,000 today to 55,000 by 2025;
• displacing fossil fuel heating with 40,000 advanced wood heating systems by 2025;
• displacing fossil fuel heating witn 60,000 cold climate heat pumps by 2025, retrofitting 50,000 buildings to be more energy efficient by 2035.
The Green Fuel Cap plan addresses carbon pollution in Vermont’s biggest energy-use sectors, transportation and heating, through a “cap” on high-carbon-content fossil fuels that are imported into the state by major oil companies. This “cap” will result in a very significant decrease in greenhouse gas emissions of at least 30 percent, and will do so with absolute certainty, and with no tax, and at no cost to Vermonters. This plan also provides substantial funds for support, incentives and strengthening of Vermont’s clean energy and energy efficient economies.
Author’s note: The Center for Clean Air Policy and the Pew Center for Global Climate Change, both lead advisers in this field, based in Washington, D.C., have provided helpful insight for this plan.
