Climate Council Eyes Transportation Carbon Tax on Top of S.5 Home Heating Tax

Even better, how ‘bout an “economy wide” carbon tax!

Fresh off the veto override and passage of S.5, the Clean Heat Standard bill that best estimates say will raise the price of home heating fuel by $0.70 to $4.00 per gallon, the Vermont Climate Council discussed ideas for doing something similar with transportation fuels – gasoline and diesel.

“To meet our statutorily required transportations emissions reductions, it’s really going to require either a ‘cap and invest’ and ‘cap and reduce’ approach or a ‘performance standard’ or some combination thereof,” said Johanna Miller at the June 15 meeting of the Cross Sector Mitigation Subcommittee (a.k.a. The Cool Kids’ Table). In clearer terms, ‘cap and invest’ is a euphemism for ‘tax and spend’. The state sets a cap on greenhouse gas emissions, charges a fee (tax) for those who exceed the cap, and spends the money on state-approved or state-run programs. ‘Performance standard’ is a euphemism for ‘government regulation.’

In order to meet the total greenhouse gas reduction mandates of the Global Warming Solutions Act, emissions from the transportation sector must be reduced roughly as much as those from the home heating sector. If you thought we were done after the Unaffordable Heat Act, you were sadly mistaken. And if you think we’ll be done after the coming gas and diesel tax you’ll be mistaken again as we still have to deal with things like cow flatulence in the agricultural sector, but back to the issue at hand….  

Miller went on, “Realistically for Vermont there are only two cap and trade options, the Western Climate Initiative and then potentially New York’s work now to stand up its own cap and invest program…. So I think we’re looking at three options: joining the Western Climate Initiative…, looking to New York…, or a performance standard.”

What is she talking about?

The Western Climate Initiative is basically a West Coast version of the multi-state New England/Mid Atlantic Transportation Climate Initiative program (TCI-P) that imploded when every state in New England and the Mid-Atlantic except, seemingly, Vermont came to its senses and rejected the idea of a massive gas tax on its citizens. Similarly, almost all of the original WCI states jumped ship when reality set in, the difference there being that California, never a state to pay much attention to reality, was big enough to go it alone and did. Oregon and most recently Washington have also signed onto WCI, though it doesn’t seem practical for Vermont to enter into this kind of pact with states 3000 miles away. (Though it is important to remember that “practical” has never been a consideration for Vermont climate warriors. So who knows?)

Miller’s reference to New York is about that state’s newly minted carbon tax program. It’s not just for transportation fuels, but rather is an “economy wide” carbon tax. Governor Kathleen Hochul’s press release announcing the initiative describes the concept as thus:

Large-scale greenhouse gas emitters and distributors of heating and transportation fuels will be required to purchase allowances for the emissions associated with their activities. By applying to each metric ton of carbon emissions, the Cap-and-Invest Program will incentivize consumers, businesses, and other entities to transition to lower-carbon alternatives. Proceeds will support the State's critical investments in climate mitigation, energy efficiency, clean transportation, and other projects, in addition to funding an annual Climate Action Rebate that will be distributed to all New Yorkers to help mitigate any potential consumer costs associated with the program.

So, it’s basically S.5 that covers all carbon emissions, not just home heating, at least as far as we can tell. As with Vermont’s leftist politicians, New York’s leftist politicians have learned to sell the hype, obfuscate the fine print, and hide entirely the costs from the voters. Details for the plan are scarce and, as with our own Clean Heat Standard, are conveniently being worked out post passage of the law. The Climate Council is reaching out to a policy expert on New York’s plan with a request to come and explain it, especially how it will work in regard to transportation. We eagerly await their presentation! Should be a hoot.

However, all other details aside, at least one prominent Climate Council member was enamored of the detail we do know – New York’s carbon tax is “economy wide.” Jared Duval wants to make sure that when we do get the full skinny on New York’s carbon tax scheme we don’t just limit the possibilities to taxing gas, diesel and heating fuels. “I think, personally, we need to keep open the option of an economy wide cap and invest, not just sector specific,” said Duval. Time will tell how many of his colleagues share his go big or go home dreams.  

Since the implosion of TCI-P the Vermont Climate Council has been unable to figure out – or more likely has just been unwilling to put forward and subject to public criticism -- any specific recommendations for a replacement policy or policies that can reduce our transportation emissions in line with the GWSA. Authors of the New York carbon tax admit that their ultimate goal is to “further catalyze a nationwide movement towards carbon pricing” (that’s another euphemism for ‘carbon tax’), so getting some dumb state that shares a border to cheerfully climb aboard would be a welcome development from the Ne Yorkers’ perspective. And, adopting an unpopular policy they didn’t themselves have any responsibility for writing (don’t blame us!) is a key selling point for the Vermont folks. A win/win for the politicians on both sides of the lake. For the Taxpayers, of course, it’s lose, lose, and lose some more.

• Rob Roper is a freelance writer with over twenty years’ experience in Vermont politics and policy.