The Energy Independent Vermont coalition, led by the Vermont Public Interest Research Group, told legislators a year ago that “we can’t ignore the fact that these types of storms” (referring to Tropical Storm Irene) “are predicted to become more common and more intense due to climate change. We owe it our children to tackle this problem head on, and doing so will require significantly cutting Vermont’s carbon pollution from fossil fuels”.
The Coalition’s proposal is to tax carbon dioxide emissions from burning heating oil, natural gas, gasoline, diesel fuel and propane. The tax would make fossil fuel use much more expensive, so people would be motivated to switch to something else.
The initial tax would be $10 dollars per metric tonne of carbon dioxide emitted and would automatically increase until the tax reaches $100per tonne in ten years, when the revenues are projected to be about $500 million dollars. That would translate to another eighty eight cents per gallon of gasoline, and similar increases for the other fuels.
The Coalition bill provides that ninety percent of this large revenue flow would be returned to Vermonters collectively, through a reduction in the sales and use tax rate from six to five percent, prebates for lower income families, a per employee rebate to employers, and refundable tax credits for individuals.
The remaining ten percent would be distributed by the state as subsidies for weatherization and renewable energy products.
The sponsors believe this would create more than two thousand jobs and increase Vermont’s gross state product by nearly $100 million.
Critics insist that even eliminating all seven million tons of carbon dioxide that Vermonters emit each year would have no effect whatever on the global climate, let alone protect against extreme storms. They see this as a device to increase tax subsidies for weatherization and renewable energy, plus wealth redistribution to lower income people to get their support.
And they simply don’t believe that a chronically revenue starved state government would ever keep the promises made in the bill. The sponsors themselves have said that “based on legislative priorities, carbon tax revenues could of course be used for other purposes” implying that carbon tax revenue might indeed be redirected to other state programs.
Current legislators will have to balance these opposing arguments, but an eventual $500 million a year tax may not look politically attractive to many, especially in an election year.
