By Guy Page
On Tuesday, a pro-carbon tax organization praised the new, state-funded carbon tax study as “a strategic road map for actions Vermont policy makers can take to strengthen the local economy, create jobs, lower the cost of living, reduce income inequality, improve public health and limit the pollution causing global warming.”
Did Vermont Businesses for Social Responsibility read the same Jan. 22 Joint Fiscal Office consultant’s report I read? Because “An Analysis of DeCarbonization Methods in Vermont,” the $120,000 report prepared by D.C. consulting firm Resources for the Future (RFTF) reveals more than a few pot holes and washouts on the road to decarbonization.
RFTF concedes that a carbon tax alone won’t do much to reduce emissions from transportation and home heat. “Vermont is unlikely to meet its emissions targets with a carbon-pricing-only strategy unless the carbon price is substantially higher than the prices modeled in this study,” RFTF said. That’s because “Vermont has a high share of emissions from transportation and heating fuel use; both sectors are difficult to decarbonize through carbon pricing or nonpricing policies.”
Let that last sentence sink in. The Legislature’s paid consultant says the proposed carbon taxes won’t work. Most Vermont emissions don’t come from a handful of power plant smokestacks; they come from hundreds of thousands of automotive tail pipes and furnaces and woodstove chimneys. They are the byproducts of keeping us warm and getting us to work. RFTF says heat and transportation “are difficult to decarbonize through carbon pricing or nonpricing policies.”
Well now they us.
What’s so surprising is to hear this gloomy talk from a carbon pricing cheerleader like RFTF, whose website shows study after study espousing carbon taxation as the best solution to the climate change problem. They pooh-pooh the jobs impact of a national carbon tax that would eliminate “only” 60,000 jobs. So Vermont must be tough sledding indeed for a carbon tax fan like RFTF to say, ‘eh, not so much in this state.’
But RFTF doesn’t say it’s impossible, and that’s what the pro-carbon tax folks are highlighting. Their “economic modeling” (e.g. what the computer said)says a carbon tax AND more electric cars and energy efficiency and etc. etc. can accomplish emissions goals without harming prosperity while making us healthier, too.
But the sunny prediction of economic and environmental wellness is based in part on an unrealistic scenario:
“Decarbonization will lead to reductions in local air pollutants that harm human health,” like nitrogen oxide, sulfur dioxide, and particulate matter, RFTF says. “Using estimates on the value of reduced mortality and morbidity….. reductions in these emissions are projected to provide annual benefits of $6.7–$38.9 billion (in 2015$) to Vermonters in 2025.”
Get that? Six years from now, RFTF says, cleaner air alone will make Vermonters $39 billion richer. That’s an awfully ambitious “economic modeling” windfall on which to justify an estimated $400 million in new taxes. Does RFTF even know that Vermont is already selling hyper-clean heating fuel? As of this July, all home heating oil sold in Vermont must be ultra-low sulfur and virtually devoid of “fine particulate matter.” Thanks to this fuel-industry inspired initiative, Vermont should already be half-way there to that alleged clean air financial windfall – if it exists. Vermont’s no-cost commitment to clean heating fuel makes a costly carbon tax redundant, if the carrot is the $39 billion clean air bonus.
But wait – wouldn’t the State be rebating revenue to low-income Vermonters? RTFT states: “Our analysis shows that impacts on economic measures such as Vermont’s gross domestic product (GDP) or total labor demand are likely to be negative under a rebate-only policy, but positive under other forms of revenue use—such as a reduction in the state’s tax on wage income. As a result, Vermont’s policymakers need to weigh the size of the overall economic costs with the distribution of those costs.”
In laymen’s language, investing tax proceeds in the economy would leave low-income people out in the cold. But rebating the money to the poor would hurt the economy. Sucking hundreds of millions of carbon tax dollar out of the economy would leave the State of Vermont with a Sophie’s choice: save the economy by sacrificing the poor, or vice-versa. Like Meryl Streep’s poor Sophie, you couldn’t save both.
To recap the RFTF study conclusions: a carbon tax won’t reach carbon goals, won’t reduce transportation or heating consumption much, would provide economic and health benefits if emissions reductions somehow generate $39 billion in health care savings in one year, and forces the State to choose between tanking the economy by rebating to the poor or helping the economy while stiffing the poor.
Last week, another new study called Vermont the least affordable state in which to retire. With Vermont already suffering an affordability crisis, one must wonder why carbon tax supporters continue to back a horse that a) won’t reduce emissions much and b) would make life less affordable. Reducing emissions remains a worthy goal, and can be accomplished without crashing our economy or environment. For details, see the Vermont Daily Chronicle for “10 Ways Vermont Can Reduce C02 Without Taxing Carbon.”
Guy Page is affiliated with the Vermont Energy Partnership; the Vermont Alliance for Ethical Healthcare; and Physicians, Families and Friends for a Better Vermont.