[Note: I have copied here the text of a letter submitted earlier today to the House Committee on Environment and Natural Resources for Rhode Island. It aims to outline major concerns about the structure of a bill titled Energize Rhode Island: Clean Energy Investment and Carbon Pricing Act.
A small portion of the funds collected by the carbon tax would be used for energy efficiency improvements for small business and low income residents. No problem there. But the bulk of the money turns into a massive and unfair money transfer system which does not have any useful purpose in regard to carbon emissions. There are many alternatives to carbon taxes which produce more immediate and more lasting benefits for our economy. Let’s shift our focus away from this dead-end policy and towards forward looking approaches that help all of us build a better (and less carbon intensive) future.]
March 7, 2016
To the honorable members of the Rhode Island House Committee on Environment and Natural Resources.
Rep. Arthur Handy, Chair
Rep. David Bennett, Vice Chair
Rep. Jeremiah O’Grady, Secretary
Dear Sirs and Madame,
As a resident of Portsmouth, Rhode Island, I write to express my observations and concerns about House Bill 2016 — H7325, otherwise known as the Energize Rhode Island: Clean Energy Investment and Carbon Pricing Act.
Let me state from the beginning that I do accept the science of climate change, and realize that human society around the globe must engineer an enormous transition in energy production, storage and portability, so we do not destabilize the habitability of our planetary home. I also acknowledge the sense of urgency and frustration which many in the scientific and environmental communities convey as they advocate for climate policy change. Governments have had access to climate change information for decades, but only now have we begun to formulate the first round of substantive plans.
This may seem a dereliction of duty at first glance, but we must remember that governments have always been designed to react slowly to new ideas, so that fads and temporary manias do not destabilize daily social function. Now we have arrived at the turning point, where law makers such as yourselves, have accepted the realities of climate change and begin to deliberate the appropriate response. So let us choose wisely our initial steps. Time is of the essence, we should not adopt rules inadequate to the scope and desired outcome in addressing these global challenges.
As I understand the content of H7325, the bill levies a tax on purchases of fossil fuels within the state at the rate of $15.00 per ton of potential carbon dioxide emissions contained in those substances. These funds are then redistributed according to a specified formula. In terms of gasoline, this means a levy of slightly less than 15 cents per gallon; a rather modest penalty in terms of curbing fuel use. Be that as it may, I think it is more important to look closely at the other mechanics of the bill. Does this law accomplish the stated goal of promoting the general welfare of the people of Rhode Island (page 1, line 16) and does it truly help us address the challenges of climate change?
Of course the first 25% of the fund’s purpose seems sensible enough. Few can argue with the goal of boosting climate resilience and energy efficiency programs for low income residents and small businesses, and 5% seems reasonable for administrative costs. But what happens with the other 70%, how do those dollars help “strengthen Rhode Island’s position in advancing efficient use of energy, make Rhode Island a nationally recognized leader in energy efficiency, stimulate job creation and enhance innovation-based economic growth”? (page 2, lines 25-27)
From what I can gather, the rest of the bill is designed to take money out some citizens’ and businesses’ pockets and then deposit that money into the bank accounts of others; a state-wide money transfer system that has nothing to do with building a more resilient and efficient economy. In practical terms I believe the outcome is something like the following:
- Those citizens who depend on personal transportation for work and those who happen to have limited choices in the heating of their homes (a gas or oil furnace they cannot afford to replace for instance) will make an automatic contribution to the livelihoods of retirees who happen to already live in high-efficiency housing. Overall this dollar-shifting seems counter productive to the stated purpose of the bill. Those who need the money most to make personal investments in high efficiency alternatives, will actually have their incomes lowered by this act. To me this looks like a punishment for circumstances beyond most people’s control rather than an aid to transform our citizen’s lives.
- Inequities would also hurt the business community. Companies with preexisting high energy footprints would end up supplementing the profits of other kinds of business—those that by their nature happen to require less energy to function. We might say that restaurants, construction companies and dry cleaners will have profits taken away to help lawyers, accountants and call centers get a bonus; not because any of them did anything different, simply because of the inherent energy disparities between different kinds of work. I see nothing fair or even sensible in the outcomes of such a money transfer system.
Truly we could cut the levy to $5 per ton, fund only the first 30% of the bill, and accomplish just as much or more than the entire carbon tax proposal would do for our state. The remaining 70% would only tend to chase away citizens and businesses over time, as they sought more equitable places to live and operate.
Please consider carefully the total outcome of this bill, and consider as well the peer reviewed literature which consistently describes carbon taxes as a cause of lower economic output. Even British Columbia—the oft cited “success” story for carbon taxes—shows signs of economic decline after the 2008 carbon tax enactment, and in recent years total fuel use has returned to pre-carbon tax levels. We must find better ideas than this, otherwise we risk wasting valuable time and resources pursuing an ineffective solution.
So what might we do instead? Time and space will limit the extent of my suggestions, but here are a few thoughts for further consideration.
- Energy and the economy are quite literally one and the same, so we must expand energy availability in Rhode Island with the aim of making fossil fuels simply irrelevant. Wind turbines, solar panels, wave and tide generation, all of this and more will be required. And during the transition we will have to work very hard to help energy investors navigate the financial challenges of building a new economy while displacing the old. This will require some foresight but we are up to the challenge.
- Make Rhode Island the easiest place in the world to own and operate electric transport. We are a small state better suited than most to the current operating limits of electric vehicles. Let us encourage businesses and home owners to install charging stations by the thousands state wide. Wouldn’t it be wonderful if companies like CVS and Dunkin’ Donuts got involved so that wherever people traveled, they would not have to worry about a drained battery keeping them from getting home at the end of the day? Make it easy for municipalities to purchase and use electric transport in their fleets, so that more and more used vehicles become available to the general public in the years ahead. Make our electric transportation commitment an international drawing card (Elon Musk are you listening?), then push our neighboring states to get on board so that we become the corner stone of a regional electric transport initiative. Private investment, reinforced by tax incentives would get this transition underway in no time.
- Draw in alternative energy companies and researchers. Make Rhode Island a hot bed of energy experimentation and innovation.
- Help people replace fossil fuel based equipment in their homes and businesses. Everything from lawn trimmers to oil furnaces needs to be retired from service. Citizens will need grants, rebates and tax incentives to accomplish these changes.
- Foster public awareness and training in regard to building a new energy future for our state. Expand community outreach. Encourage the development of courses and majors at our public and private colleges and universities which will provide a properly trained workforce for the new energy systems we seek to encourage.
- Educate our children. Help them envision and pursue the new energy future we all must share.
- Modify building codes and zoning ordinances to ensure buildings are designed and sited with renewable energy systems in mind.
- Encourage research into new building techniques and materials which reduce the use of concrete and other carbon-intensive inputs.
We have many forward-thinking and downright exciting things we can do to put Rhode Island at the forefront of a new world of carbon independence. Let us rapidly begin.
Mr. Chairman, I respectfully ask that you include this letter as part of the testimony related to H7325, and consider carefully the unintended consequences of a carbon tax constructed in the form now under consideration. I will also make myself available to speak about this letter to the entire committee during the March 10th public hearing, if you care to extend an invitation.
Needless to say, I have a great passion for the future of our world, and at the same time I have a devotion to sustaining and improving the society in which we live. Please let me know if I can be of assistance to yourself and your committee as you deliberate this matter.
Sincerely and respectfully yours,
William “BT” Hathaway
Items added to the letter presented during the committee hearing.
- Sponsor electric boat races and/or an electric boat show on Newport Harbor. Encourage research and development in and among our marine contractors and builders.
- The military is actively pursuing alternative energy research and development. Ask our congressional delegation to bring some of that work to our state.