The time to act on climate change is now. Over the summer, the damaging effects of climate change occurred in Texas with Hurricane Harvey, in Northern California with extreme fires, and in many other places around the world. While these storms and fires have occurred in the past, the intensity of the recent extreme weather events are unprecedented and exacerbated by climate change. If Massachusetts residents don’t do our part to solve the climate change problem, our state and my future are also at risk.
Our economy is largely fueled by a carbon-based energy that contributes to climate change. Massachusetts can lead on climate by becoming a low carbon, state – boosting our economy and reducing our impact on climate change. One strategy to transition to a low carbon economy is to place a price on carbon.
Putting a price on carbon helps ensure we recognize its true cost – from the dirty air pollution it creates in Massachusetts to the long-term risks of sea level rise and other climate impacts. In Massachusetts, there are two proposed carbon tax bills to accomplish this, including, S. 1821, “An act combatting climate change.” The goal of the carbon tax is to reduce carbon emissions by increasing the price of carbon-intense goods and services. In effect, this will incentivize the integration of low carbon goods and services into households and justify investments in energy efficiency and renewable energy throughout the economy by. A tax or fee is a widely used economic tool to discourage consumption of a harmful good; examples of this policy tool include taxes on cigarettes or alcohol.
As a resident of western Massachusetts, I am aware of the necessity of driving as well as my contribution to climate change every time I get in a car. A carbon tax would raise the price of gas because auto fuel is very carbon intense and contributes 40 percent of carbon emissions in. For example, a $40 per ton carbon tax would result in about a 40 cent increase in a gallon of gasoline.
Fortunately, this was a key consideration in the design of SB1821, which proposes a higher rebate to rural residents (1.3 times the rebate to urban residents), to minimize the burden of higher gas prices on rural residents. The proposed bill, S. 1821, suggests a modest $10 per ton CO2e for the first year and a $5 increase for subsequent years until the rate is $40 per ton CO2e. This slowly increasing charge on carbon will act as a price signal to businesses and citizens to ease the transition to a low carbon economy.
In order to make the carbon tax policy more equitable and minimize the impact of higher prices of carbon goods and services, the revenue from the tax will be given back to the citizens and recycled into the economy. SB 1821 suggests a full revenue rebate through equal dividends to each citizen, minus the administrative costs, which makes the carbon tax more progressive.
Citizens could maximize their respective rebate by purchasing fewer carbon goods and services and thus reducing the amount they pay in carbon taxes while reaping the benefits of the carbon tax rebate. Ultimately, S. 1821, is a revenue-neutral carbon tax that is designed to encourage a behavioral change to a low carbon economy while giving equal dividends back to the citizens.
Right now, Massachusetts is in a unique position to affirm the state’s commitment to future generation and the environment. It can do so by remaining in the Regional Greenhouse Gas Initiative, the Northeastern and mid-Atlantic carbon cap and trade program for the electricity sector, and expanding the coverage of greenhouse gas emitting priorities through SB 1821, “An Act combating climate change.”
Breanna Parker is a resident of Northampton, MA. She studies Environmental Science and Policy at Smith College.