Five Questions Legislators Should Ask About the Carbon Tax

Feb 15, 2018

The new version of the carbon tax legislation, SB 6203, will be heard by the Senate Ways & Means committee today. Here are some (there are many more) questions they should consider:

1.       Why does the bill allow government to waste 95% of carbon-reduction funding? Right now, I could pay $10 and reduce one ton of CO2. The carbon tax bill, on the other hand, would pay up to ten times that amount for the same reduction. The bill says costs, “May not exceed one hundred dollars in 2017 dollars per ton of carbon dioxide equivalent...” This is extremely expensive. In California, the cost to reduce a ton of CO2 is $15. In the Northeast, the price is $5. Spending $100 to get $5 of benefit is a waste. There is no reason the price should be above $20. If climate change is a serious threat, there is no justification for wasting 95 out of every 100 dollars to cut CO2.

2.       Why does the bill prohibit effective, low-cost approaches? The new version of the bill is so beholden to incoherent environmental talking points that it could prohibit and mandate spending on the same project. Section 205 requires utilities to spend money on “clean energy investment.” That same section, however, removed the ability to “offset carbon dioxide emissions” by investing already-established and certified, carbon-reduction projects. The only difference is that one expenditure is managed and paid for by the utility and the other is managed by an independent certification organization and paid for by the utility. The result is that utilities spend more money to receive a smaller reduction of CO2 emissions. Why? There is no good reason.

3.       What is the priority for grants – CO2 reduction or politics? The legislation makes virtually all carbon-reduction funding subject to prioritization by the “environmental justice panel.” The panel would contain nobody with expertise in climate economics. Additionally, the panel would have no metrics for environmental effectiveness. Environmental results are not merely ancillary, they are not even measured.

4.       Is there any accountability for failure? Although the “environmental justice panel” is charged with evaluating the “projected performance” of expenditures, there is no accountability for the members of the panel if they fail to achieve targets. The bill claims to care about improving the environment and certain communities and yet, it would allow boards that failed to deliver either to continue serving without any accountability.

5.       Doesn’t the bill just encourage a more extreme ballot initiative? One argument used by proponents of this bill is that if this doesn’t pass the environmental community will put forward a bill that is truly extreme. The bill, however, actually encourages an initiative. Section 1107 says any initiative would supersede the carbon tax. In other words, if the carbon tax was passed, the environmental community and their out-of-state backers could run the most radical initiative they want and the worst that would happen is they would be left with the carbon tax. It sets up a no-lose situation for the extreme environmental left. By way of contrast, without the carbon tax, greens would have to offer something they believed could pass or risk being left with nothing. Far from preventing something more radical, the current bill provides a strong incentive for extremism.