Carbon tax resurfaces as electric power subsidy

The carbon tax is back again, but with a new name.

Local environmentalists unveiled the “Essex Plan” at the Energy Action Network annual meeting at Champlain College last week in Burlington.

The tax proposal, endorsed by Seventh Generation, focuses on adding costs to carbon-based fuels and transferring the tax revenue to electric utilities. It was promoted Saturday at the Climate Action Through Carbon Pricing event hosted by the Vermont Public Interest Research Group.

As envisioned by the plan’s 13 authors, the Essex Plan will “create jobs, attract new businesses, spur strategic electrification and provide the cleanest electricity at the lowest rates in New England.” The authors say the plan will lower utility bills “for every Vermonter and Vermont business” and offer refundable rebates for low-income and rural Vermonters.

According to the plan, carbon costs would increase over time, starting at $5 per ton of CO2 in 2018 and increasing by $5 per ton annually. The goal is reach  $40 per ton, or “the social cost of carbon” — an estimate of damages caused by greenhouse gas emissions as determined by the U.S. Environmental Protection Agency.

Mark Curran, founder and co-owner of Black River Produce based in North Springfield, is one of the authors of the report. His business provides local produce to schools, restaurants and hospitals.

“The one downside is we’re real energy hogs,” he said. “We have a fleet of 50 diesel trucks that are out there every day, and we have these big 60,000 square-foot coolers that require refrigeration, so our carbon footprint is considerable.”

To mitigate their carbon output the company installed 3,000 solar panels on their roofs to cover 80 percent of their electric. They also installed electric vehicle chargers for their employees.

Curran said his company made the investment in alternative energy back when oil and gas prices were expensive.

“But then all of the sudden oil came way back down and I thought, well, it’s cheaper for us to burn oil than it is to burn wood pellets that are made in Windsor, Vermont, 15 miles away,” he said.

He added that local industry needs a little nudge in the form of a carbon tax to help boost the economy while simultaneously curbing carbon output.

Matt Cota, executive director of the Vermont Fuel Dealers Association, has been tracking carbon tax proposals for years, but with a more critical eye.

“This is yet another version of the same thing we’ve been hearing for the past five years in Vermont, which is, ‘How can we make it harder for people to drive to work in fossil-fuel cars and make it more difficult for people to heat their homes with oil and gas?’” he said.

Cota said shifting the funds to Vermont’s electric utilities is a new approach.

“The idea is, if you are going to replace 200 million gallons of heating fuel in Vermont and 300 million gallons of motor fuel in Vermont, the way they want to do it is by everyone driving electric cars and everyone using electric heat,” he said.

“You’ll be incentivized to use that [electric power], and people who don’t adopt electric cars and heating will be penalized with a financial penalty of up to 40 cents a gallon — that’s what $40 a metric ton equals.”

Some electric cars have been selling in Vermont at nearly one-third their regular retail price, courtesy of a $7,500 federal tax credit and additional rebates from the manufacturer.

Cota said shifting to electricity has cost issues.

“Electric resistance heat [conventional electric heaters] is the most expensive way to heat your home, there’s no question about it,” he said.

While newer cold-climate heat pumps are more efficient, Cota said, they still don’t compete with low-cost heating fuels.

Rob Roper, president of the Ethan Allen Institute, a free-market think tank, criticized the Essex Plan.

“It’s a transfer of wealth from one industry to another,” he said. “And I think that if you look at it, what you are doing is you are subsidizing higher income people, because clearly what they are saying that they want to do in that report is they want people to buy more electric cars and they want people to buy more heat pumps.”

Roper added that he thinks many Vermonters can’t afford to switch from conventional vehicles to high-priced electric cars as envisioned in the plan.

Michael Bielawski is a reporter for True North Reports. Send him news tips at bielawski82@yahoo.com and follow him on Twitter @TrueNorthMikeB.

Image courtesy of Bruce Parker/TNR

10 thoughts on “Carbon tax resurfaces as electric power subsidy

  1. It’s not a carbon problem,it’s a number of people using carbon problem.

    There are too many people on the planet.Giving third worlders smart phones will mean the destruction of us all.They want what we got,and the single earth doesn’t have enough to provide it.

  2. “Redistribution” is the operative word of the Essex Plan.

    Take in 100% money and give back 100%?

    Are they joking?

    That is physically impossible.

    BTW, CO2 is not a pollutant.

    CO2 is piped into greenhouses to about 1000 ppm to promote herbicide-free, pesticide-free growth of vegetables, fruits and flowers all over the world.”The ESSEX Plan prioritizes working-class Vermonters through additional PER-PERSON REBATES for families earning less than 400% of the federal poverty level (about $90,000/year for a family of four).

    Why “per-person”?

    And rural Vermonters earning less than $75,000 annually ($150,000 per couple) will receive additional monthly rebates to cover their necessary travel expenses.”

    What about their unnecessary travel expenses? Who would keep track?

    The unilateral carbon tax would become about $280 million in 2025, and each year thereafter.

    About $140 million would be distributed as follows:

    50% to all residential rate payers
    25% to low-income households
    25% to rural households

    Thus a typical low-income household in a rural area would get all three rebates, which likely would reduce its electric bill by 50%.

    The DPS will determine the split of these rebates between households and businesses.

    The unilateral carbon tax of $40/ton by 2025 would generate about $120 million in commercial and industrial rebates.

    Vermont utilities collected about $440 million for commercial and industrial electricity sales in 2015.

    $120,000,000 ÷ $440,000,000 = 27% rate reduction by 2025; 8 years from now.

    Bureaucrats administering, collecting, counting, qualifying and distributing this huge pile of money each year would involve no effort and expense by government? About 5 to 10% of the intake?

    And the bookkeeping, filling out forms, etc., by 250,000 ratepayers to receive the rebates would involve no effort on part of ratepayers?

    This has everything to do with government doing more meddling (aggrandizement) and Vermont households and businesses having to jump through hoops to play the rebate games.

    The ideating/preaching Volvo liberals, writing clever, sugar-coated Essex Plans, have not a clue about economic realities.

    And to wrap all this as “fighting climate change” is a high order hypocrisy.

    The best thing for Vermonters is for government to leave them alone, to let them take care of their own affairs, as they have done for 250 years, instead of creating an evermore complex nanny state.

    Just look at all the high-priced people involved with writing the Essex Plan.

    The cost of them and of many other such plan writers is a wasteful drag on the Vermont economy.

    A carbon tax should not be unilateral, but nation wide.

    • A carbon tax should be NOT AT ALL! Humans are NOT the reason for any change in the climate or weather! This is nothing more than a global assault on developed countries and a way to redirect America’s resources to this foolish quest for climate control.

  3. There isn’t enough lipstick in Macy’s cosmetics department to disguise the fact that this proposal is still a pig.

    • Gotta wonder why they even try to disguise it. Better off to come right out in the open and tell Vermonters that they are going to cram a huge tax up our kazoo….because THEY think (fools and idiots that they are) they are going to save the world.

  4. ANY Carbon Tax will DEFINATELY affect those of us who are on a fixed income. Social Security does NOT provide enough of an increase to off set any Carbon tax. I now pay several cents per gallon of propane that I use for heat, hot water and Cooking. Does anyone HONESTLY believe the Electric Companies will Cut their Prices to us If given Carbon Tax Dollars??? How about Young families just starting out? Can they afford Rising rents as Land Lords pay the Tax???

    • Hey, I’m a young person here and I’m uncertain that becoming a “young family” will be possible in a future impacted by unaffordable climate changes. Just speaking for myself and echoing what my friends in their 20s and 30s say. Your concerns are valid, and I’m adding that climate change will “tax” everything that we need and it won’t give us credits in return. A carbon price in VT won’t fix the climate in a day but the fossil fuel era is coming to an end and it can either be intentional or nature and system collapse will force it. Thanks for listening.

      • When you realize that there is no such thing as climate change caused by humans, that fossil fuels are not the planet destroyer you think they are, and…when you can pull yourself from the lies and half truths the mainstream media is feeding you, you will realize that the only future impact to be sustained will be a Communist government that YOU helped install believing all this junk science (follow the $$ trail….)

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