Last week, Gov. Phil Scott took the oath of office and issued his first executive order. It’s a good one. He directed every state agency and department to focus on three strategic priorities:
• strengthening the economy;
• making Vermont more affordable;
• and protecting the most vulnerable.
That’s exactly what cutting carbon pollution would do.
The nations and states that price carbon emissions in order to reduce pollution have stronger economies than their neighbors that don’t.
Since California’s carbon pricing program went into effect in January 2013, the state has created over 1.5 million new jobs. That’s twice as many new jobs in California as there are people in Vermont.
In British Columbia, Canada, the center-right political party passed North America’s first carbon pollution tax in 2008, and growth in British Columbia’s gross provincial product has outpaced every other Canadian province the last three years running. The model has been so successful that all of Canada will implement a carbon price next year.
Denmark, Sweden, Norway, the UK – and many more – price carbon pollution and all have vibrant economies.
But it’s not just distant states and countries that price carbon pollution.
Vermont has a carbon pollution price. Thanks to former Gov. Jim Douglas’ leadership joining the Regional Greenhouse Gas Initiative, Vermont has charged for carbon pollution emitted from electricity generation since 2008. In that time, RGGI states have seen 3.6 percent more economic growth than states outside the compact.
Carbon pricing also makes Vermont more affordable.
When it comes to energy, we have to acknowledge that fossil fuels make Vermont more expensive. As the Vermont Comprehensive Energy Plan notes, “All petroleum products consumed in Vermont are imported; the state has no known petroleum reserves. In 2013, the state spent nearly $2.3 billion annually — about 8% of Vermont’s GDP — on petroleum products that are extracted and refined elsewhere … this is a significant flow of financial resources away from the state’s economy.”
Carbon pricing helps reverse the economic drain fossil fuels cost Vermont, incentivize locally-generated clean energy and spur job creation – and jobs are essential to affordability.
Vermont’s energy efficiency programs – funded by RGGI – will save Vermonters at least $100 million in energy bills. Our utilities have largely made the transition to low-carbon energy while holding rates steady. Residential electric rates in Vermont are among the lowest in the Northeast and lower than all of our neighboring states.
And RGGI is spurring demand for renewable power in southern New England, which will benefit Vermonters in the years ahead. Payments from the Clean Power Link project that will carry renewable energy from Canada to points south will start in 2018 and add up to over $400 million over the next 40 years. These funds will keep electric rates down and help clean up Lake Champlain.
Finally, carbon pricing, done right, protects and prioritizes the most vulnerable.
The current situation, where many low-income Vermonters are dependent on fossil fuels for heating and transportation, is terribly regressive.
On average, low-income Vermonters use less energy — because many drive smaller cars, don’t drive lots of discretionary miles, have smaller homes to heat and keep the thermostat down – but they pay a higher percentage of their income on energy than wealthy Vermonters.
A Vermont Law School study released in 2013 found that the 10 percent of Vermonters with the lowest household incomes spend $2,431 on energy a year – or 27.7 percent of their annual income. The top 10 percent spend $4,042 on energy, but because their household incomes are so much higher their energy burden is just 1.9 percent of their income.
As Gov. Scott knows from his leadership launching Wheels for Warmth, when the energy burden is 15 times higher for some Vermonters than others, it is a huge roadblock for those working to escape poverty.
Carbon pricing can help bridge that gap, because it can fund much-needed low-income weatherization, public transportation, and the transition to lower cost, low-carbon solutions for home heating and transportation.
As Gov. Scott noted in his inaugural address, “Doing things the way we’ve always done them and hoping for a different result, will not bring about the change we need.” True. And, “If we want a system that draws people to Vermont, we can’t be paralyzed by fear of change.” True again. Those sentiments are a good place to start.
Energy Independent Vermont looks forward to working with Gov. Scott, the General Assembly, and all Vermonters to build on those sentiments and find new ways to clean our environment, strengthen our economy, make our state more affordable, and protect the most vulnerable Vermonters.