Editor’s note: This commentary is by Joey Bergstein, CEO of Seventh Generation.
[F]rom Madrid to Montpelier, over 1 million young people in nearly 125 countries marched out of school last Friday in one of the largest environmental demonstrations ever. They are the face of a generation alarmed by the inaction of this generation. They are raising their voices, telling us that our “house is on fire” and asking us to help them save it.
Here in Vermont, our emissions rose 10 percent in the past two years, erasing the declining trend. We are essentially throwing gas on the already burning house, and it’s no wonder the next generation is frustrated.
As a company with the next seven generations in our view, we recognize that climate change is one of the greatest challenges facing our time.
Climate change threatens the health of our economy and of Vermonters.
As a business, Seventh Generation is reducing climate pollution through wide-ranging initiatives in product and packaging design, the use of plant-based materials, which have lower carbon footprints than their petroleum-based counterparts, and logistics initiatives. We work with our suppliers and employees to reduce carbon emissions across the spectrum – from manufacturing to transportation to how we heat our warehouses, offices and homes.
In the absence of regulation, Seventh Generation has instituted our own carbon pollution tax.
For every ton of pollution, we assess our business a small charge and use the generated revenue to invest in initiatives that lower our carbon footprint. In this way, our business divisions have an incentive to reduce pollution and the resources with which to implement low-carbon alternatives. It’s a virtuous circle.
Seventh Generation is hardly alone. It is estimated that at least 20 percent of the Global Fortune 500 use internal carbon pricing. Companies like Microsoft, Walt Disney and our parent company – Unilever – have internal carbon prices. Local institutions like Middlebury College have learned from business and are now designing their own programs.
Collectively, we have found carbon pricing to not only be an important tool to reduce emissions, but also a strong driver of economic growth. As we spend less on polluting fossil fuels, more revenue is available for investment in research and development, expanding to new markets and shareholder dividends.
But as hard as we have worked to reduce our carbon footprint, it’s clear change will not come from individual companies acting alone. It is clear we need a better statewide climate strategy and more commitment to that strategy than exists today. Protecting the health of this and future generations requires the governor and legislators to do more, faster, to address this crisis.
For example, Gov. Scott recently proposed offering incentives for about 300 electric vehicles. That sounds good. But, as a recent analysis by the Energy Action Network shows, we’ll need 90,000 EVs on the road by 2025 if we want to meet the governor’s commitment to the goals embedded in the Paris Climate Agreement. If we go at this suggested pace, we won’t reach 90,000 EVs for 300 years!
The same analysis by the Energy Action Networks indicates we’ll need to weatherize 90,000 homes and buildings in the next six years, but currently, we only provide funding for about 1,000 such projects a year.
Leadership on both sides in Montpelier needs to be thinking bigger. Much bigger.
One sensible step would be to take the advice of economists of every political stripe and join the business community in putting a price on carbon pollution. A small fee on the millions of gallons of fossil fuels Vermont imports each year could be used to fund incentives for the lower-carbon, lower-cost technologies Vermonters want and need, such as high-efficiency heat pumps and high-mileage vehicles. Climate policy can reduce income inequality. For example, under an ESSEX Plan scenario, the 60 percent of Vermont households at the lowest rungs of the economic ladder receive more in rebates than they would pay in costs.
The ESSEX Plan’s carbon pollution fee starts low – just $5 per ton of carbon dioxide. Which is roughly 4 cents on a gallon of gas. Over the next eight years, the price rises by $5 per year until it reaches $40. Why? Because $40 is what the U.S. government has calculated the “social cost of carbon” to be. The revenues from this pollution fee are where the ESSEX Plan differs from other carbon pricing plans you’ve probably seen. It proposes we return 100 percent of those revenues to Vermonters in the form of electricity rebates, slashing the amount of money Vermonters and Vermont businesses pay for electricity.
It is a virtuous circle that works in business and can work for the state, too.
We wouldn’t be acting alone. Quebec prices carbon pollution. New York is considering a price on carbon pollution. The largest gas and electric utility in Massachusetts is pushing for carbon pricing. Even New Hampshire legislators have introduced carbon pricing legislation.
In fact, Vermont already has a price on carbon pollution in the electric sector through our participation in the Regional Greenhouse Gas Initiative. And it’s working! Across the Northeast, carbon emissions are down while the region’s economy is growing faster than parts of the country without carbon pricing.
Policy makers in Montpelier should consider a fee on pollution an extension of the existing, bipartisan and successful RGGI program – and move rapidly to expand on that success.
Through carbon pricing, we will wean ourselves off of polluting fossil fuels and save money while protecting the environment for the next seven generations.
