BARRE, VT— Vermont could dramatically reduce its climate pollution while improving the state’s economy and growing jobs, according to a new economic study released today by a diverse coalition of environmental, business and low-income groups. The benefits would be achieved by putting a price on carbon pollution and returning the revenue to Vermont citizens, businesses and municipalities through tax cuts and investments in clean energy.
The “Energy Independent Vermont” coalition released the Vermont-specific study, conducted by the non-partisan Regional Economic Models, Inc. (REMI). REMI is an economics and policy analysis firm specializing in services related to modeling regional economies. Within Vermont, REMI clients include the Vermont Agency of Commerce and Community Development, the Vermont Department of Public Service, and the Vermont Legislative Joint Fiscal Office. A copy of the study is available for download at https://www.energyindependentvt.org/wp-content/uploads/2014/11/2014-11-REMI-Vermont-carbon-pricing-report.pdf.
The REMI study makes clear that by putting a price on carbon pollution – in this case, fossil fuels used in heating and transportation – the State could afford to help Vermonters cut their energy bills and fossil fuel use by helping them invest in efficiency and renewables, while cutting hundreds of millions of dollars in personal and corporate taxes and growing jobs and the economy at the same time.
“There’s no doubt Vermonters care about global warming and feel a sense of responsibility to take action,” said Paul Burns, executive director of the Vermont Public Interest Research Group (VPIRG). “Putting a price on carbon pollution gives us the opportunity to slash our state’s global warming emissions while keeping more money in Vermonters’ pockets.”
Tropical Storm Irene wreaked havoc on Vermont just over three years ago, in what many believe was a foreshadowing of future climate-related super-storms and extreme weather events. Rochester resident Jon Graham, whose home was destroyed by Irene, said “for us, climate change stopped being abstract, and became a material reality – one that needs to be addressed now.”
“The Alchemist nearly got wiped off the map by Irene,” said Jen Kimmich, co-owner of the Alchemist Brewery in Waterbury. “I’ve seen the science that tells us that more extreme weather is on its way because of climate change. I support putting a price on the pollution that causes global warming because I want to do everything I can to keep other Vermonters from losing their homes and businesses, before it’s too late.”
The REMI report – The Economic, Fiscal, Emissions, and Demographic Implications from a Carbon Price Policy in Vermont – takes an in-depth look at how a carbon pollution tax would work in Vermont. A Vermont-specific price on carbon beginning at $5 per metric ton of carbon dioxide and rising to $50 per ton over ten years would yield:
- More than 1,000 new jobs in the state by the 2030s
- An increase of Vermont’s Gross State Product of more than $40 million annually
- An increase in disposable income for each class of wage earners in the state, and
- A reduction in Vermont’s CO2 emissions of more than one million tons per year
The study also suggests that both the economic benefits and reduction in greenhouse gas emissions are greater as the price on carbon pollution increases. For instance, a carbon pollution tax of $150 per metric ton of CO2 phased-in over 15 years would ultimately slash emissions by more than 3 million metric tons per year. It would also create more than 3,000 new jobs and improve the Gross State Product by more than $150 million per year.
“There is widespread agreement among economists that taxing carbon pollution is the best option for addressing climate change,” said Jon Erickson, an economics professor at the University of Vermont’s Gund Institute for Ecological Economics. “We have decades of experience with pollution taxes that shows positive environmental outcomes alongside stronger economies.”
“Climate change is the defining challenge of our time, and responding to that challenge starts with putting a price on carbon pollution,” said Scott Johnstone, Executive Director of the Vermont Energy Investment Corporation. “The good news is, this initiative won’t only reduce carbon pollution in Vermont, it will also benefit the state’s economy and create jobs.”
The organizations making up the Energy Independent Vermont coalition stressed their commitment to protecting the well-being of all Vermonters.
“Vermonters struggling to make ends meet have the most to lose from the status quo,” said Hal Cohen of Capstone Community Action, where the event took place. “Not only do they need more help cutting their dependence on fossil fuels and saving money – which this plan would provide – they’re the ones most likely to be impacted by climate change.”
Under the scenario put forth by the coalition and modeled by REMI, 90 percent of revenues raised by putting a price on carbon pollution would be returned as tax cuts to individuals, businesses and other institutions. A $50 per metric ton price phased in over ten years would raise approximately $35 million in the first year and just over $250 million in year ten. An individual would receive somewhere between about $200 and $450 per year in a personal income tax exemption or direct payment under the scenarios modeled.
The coalition is calling for a portion of the carbon pollution revenues to be made available to low income Vermonters to ensure they can participate fully in the economic benefits of this transformation. A low income family with two adults could see an additional rebate of up to $700 and, combined with the general rebate above, around $1,600 in total (or more) in rebates.
The other 10 percent of the revenue raised would go to Vermonters and Vermont businesses to help them make investments in energy efficiency, renewable energy and other clean alternatives to fossil fuels for transportation and heating. For example, using just a fraction of the polluter-funded Energy Independence Fund, Vermonters could weatherize or install super-efficient cold climate heat pumps in nearly 45,000 homes in just the first 10 years of the policy.
“More and more Vermonters and Vermont communities are taking their energy future into their own hands, becoming more energy independent and helping ensure long-term affordability and security,” said Brian Shupe, Vermont Natural Resources Council’s executive director. “Putting a price on pollution and reinvesting those dollars right here in Vermont will help.”
“Global warming pollution is the biggest environmental challenge of our generation. Taxing carbon pollution allows Vermonters to take control of our energy future. Instead of growing our dependence on fossil fuels we can grow our economy and reduce pollution,” said Sandra Levine of the Conservation Law Foundation.
Energy Independent Vermont is a growing coalition of environmental organizations, Vermont businesses and business associations, academic leaders, low-income advocates and Town Energy Committees all dedicated to a simple goal: address the problem of climate change by putting a price on pollution here in Vermont. Members include BROC-Community Action in Southwestern Vermont, Capstone Community Action, Champlain Valley Office of Economic Opportunity, Inc. (CVOEO), Conservation Law Foundation, Gund Institute for Ecological Economics, Northeast Employment and Training Organization (NETO), North East Kingdom Community Action, Inc.(NEKCA), Sierra Club – Vermont Chapter, Southeastern Vermont Community Action, Inc.(SEVCA), Vermont Businesses for Social Responsibility, Vermont Conservation Voters, Vermont Energy Investment Corporation, Vermont Natural Resources Council, Vermont Public Interest Research Group and 350 Vermont.