A new coalition of environmental, business and advocacy groups has been launched in Vermont to push state legislators to impose a carbon tax. The coalition has released the results of a study that assessed the possible impact of a carbon tax on Vermont’s economy and carbon dioxide emissions.
TheEnergy Independent Vermont Coalition on Thursday released a white paper: The Economic, Fiscal, Emissions, and Demographic Implications from a Carbon Price Policy in Vermont, prepared by Regional Economic Models in Washington D.C. It was commissioned by the Vermont Public Interest Research Group, the Vermont Energy Investment Corporation and Vermont Businesses for Social Responsibility. It assessed the implications of a state-level carbon tax on the economy, budget and emissions levels. It only reviewed liquid and gaseous fuels however. The Regional Greenhouse Gas Initiative, of which Vermont is a participant, already applies a carbon tax to electricity.
VPIRG Executive Director Paul Burns says with Congressional inaction on climate change they wanted to assess if the state could effectively impose a carbon tax.
“The question for us was, knowing that this is the sensible policy to do, could we do it legitemately at the state level so that it would have a positive impact on economic growth and that it would have a positive impact on jobs? The analysis showed that yes it would be effective at reducing climate pollution. It would also improve Vermont’s economy and grow jobs here.”
Vermont House Natural Resources and Energy Committee Chair Democrat Tony Klein says a carbon tax will help get a handle on the impacts of climate change. He plans to push legislation through his committee.
“When you factor in that there’s a mechanism to mitigate the immediate possible hardships on the low income and middle income Vermonters in there plus the ability to invest in efficiency measures and the fuels of the future it’s a positive outlook for the state of Vermont.”
Vermont Fuel Dealers Association Executive Director Matt Cota says the concept is politically powerful in Montpelier, but rather than enhancing the state’s economy, he believes a carbon tax would have severe negative implications.
“A very powerful political philosophy is that we should raise the price of all energy in order to force them to use less. If you tax gasoline, diesel fuel, heating oil, propane you are destroying economies of rural Vermont. I cannot think of a more potent recipe for economic destruction in Vermont than a 45 cent carbon tax.”
VPIRG’s Paul Burns says a carbon tax would be targeted to reduce negative impacts on consumers.
“That’s those who are importing oil, gas, other petroleum products for use in heating and transportation in Vermont. It’s not at the gas station level. Though it is certainly possible that the costs will be passed on to consumers. And that’s part of why we have such a large tax cut envisioned as well so that 90 cents on every dollar raised would go right back into the pockets of Vermont taxpayers and businesses as well as municipalities, schools and the like.”
But Matt Cota says the coalition fundamentally does not understand how energy is sold.
“That’s what so disturbing about it. The state has only the power to tax the retail distributors of fuel. The state can’t go after major producers. They only have the power to tax the retail distributors which are, for the most part, small multi-generation family companies. These are the men and women who provide thousands of jobs and pay literally tens of millions in taxes already to the state. This is a policy that will destroy Vermont’s economy.”
