Environmental, business, low-income advocates push for Vermont to adopt a carbon tax

Economic Indicators Associated Press

A coalition of environmental, business and low-income advocates called Thursday for Vermont to adopt a carbon tax as a way to encourage emission reductions and to use the money both for energy efficiency and for tax cuts elsewhere.

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Among the speakers at the event held at the headquarters of the Capstone Community Action low-income service agency was Jen Kimmich, co-owner of the Alchemist Brewery in Waterbury, maker of the award-winning Heady Topper Double IPA beer.

"I support putting a price on 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," said Kimmich, whose restaurant was wiped out by flooding during Tropical Storm Irene of 2011.

She was joined by representatives of groups ranging from Vermont Businesses for Social Responsibility to the Sierra Club to the Gund Institute for Ecological Economics at the University of Vermont in calling for legislation to implement the tax.

The event coincidentally came a day after President Barack Obama and Chinese President Xi Jinping announced in Beijing a groundbreaking agreement between the world's two biggest polluters to curb carbon emissions.

One of those in attendance was Rep. Tony Klein, chairman of the Energy and Natural Resources Committee in the Vermont House, who said legislation was already being drafted to implement a carbon tax in the state. He said he would push it as a top issue when lawmakers begin their new session in January.

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Backers said the tax would be charged as a fee per metric ton of carbon dioxide emitted and would be imposed on distributors of gasoline, home heating oil, propane, natural gas, and other fossil fuels. Electric utilities, which already effectively pay a tax under a system in the Northeast that caps emissions and allows pollution credits to be sold, would not be included.

Carbon tax supporters acknowledged costs would be passed through to consumers, saying that would create an incentive to burn less fuel.

Each $10 per metric ton of carbon would translate in the case of gasoline to a tax increase of about 9 cents per gallon. In one scenario, the coalition described phasing in a $50 per ton tax over 10 years, which would mean about 45 cents on a gallon of gas and which the groups said would generate about $250 million in the tenth year.

Ninety percent of the money "would be returned as tax cuts to individuals, businesses and other institutions," the groups said, with the remainder going to energy efficiency measures like insulating homes.

Questioned about a possible carbon tax at a news conference Wednesday, Gov. Peter Shumlin said he was skeptical Vermont could go it alone without losing gasoline sales and other business to neighboring states. The Democratic governor said he would prefer to see a regional or national carbon tax.

The idea, which also has been floated in states including Massachusetts, Oregon and Washington and is in place in several European countries and British Columbia, drew immediate fire from business groups including the American Petroleum Institute to the Vermont Fuel Dealers' Association.

"Raising the cost to heat our homes and drive to work is not a recipe for economic success. It's a recipe for economic disaster," said the Fuel Dealers' executive director, Matt Cota.

Supporters of the measure said they based their projections on a 40-page study by the economic consulting group Regional Economic Models Inc., of Amherst, Mass., and Washington. They said the analysis showed the tax would boost the state's economy by, for example, keeping more of the $1.2 billion currently spent each year in Vermont on gasoline in the state.