Mixed Signals from Governor on Carbon Tax Bill

Videos and text by TIM FAULKNER/ecoRI News staff

PROVIDENCE — A carbon-pricing bill is back for a third year in the General Assembly, but it may face a challenge from Gov. Gina Raimondo. Last year, Raimondo changed her position from backing state legislation to supporting a federal program for taxing fossil fuels.

“I think it ought to be done at a federal level and you have my full support to make that happen,” Raimondo said to Sen. Sheldon Whitehouse, D-R.I., during an Oct. 20 environmental forum in Providence last year hosted by Whitehouse (video above).

Last July Whitehouse sponsored the American Opportunity Carbon Fee Act, with support from the conservative think tank the American Enterprise Institute. The bill was touted for having backing from blue-chip corporations and moderate Republicans who endorse an economic approach to combating climate change. But the bill has yet to have hearing and faces unlikely  prospects of advancing in a Congress dominated by climate deniers.

In early August of last year, two months before the Oct. 20 environmental forum, Raimondo said she would support carbon-tax legislation if passed by the General Assembly (video above), but she then quickly shifted her support to efforts led by a dysfunctional Washington, D.C. She says a carbon tax needs to “balance affordability with clean energy.”

Rhode Island, she said in late October, is too small to adopt its own program. “I don’t think it’s a thoughtful approach and I don't think it will be successful," she said.

Nevertheless, the governor said a carbon tax is the “right answer” to address climate change and said she would help raise money “philanthropically” to pay for a carbon-tax study approved by the General Assembly (S108/H6305) in 2017. The state Executive Climate Change Coordinating Council (EC4), which is overseen by the Rhode Island Department of Environmental Management, is charged with implementing the study but, so far, hasn't taken up the project because of a lack of funding.

Proponents of a bill written by the EnergizeRI Coalition, a carbon tax advocacy group with roots at Brown University, support an EC4-led study, but its members expect the findings will conclude what they have found from their own research. A 2015 analysis done on behalf of EnergizeRI by the Regional Economics Models Inc. of Cambridge, Mass., found that a fee on all carbon-based fuels distributed or sold in the state would create some 4,000 jobs and cut greenhouse-gas emissions by nearly 30 percent by 2040.

About 70 percent of all money raised through the tax would be dispersed as a dividend to families and businesses. The annual dividend pays a family of four about $200 a year, while each business would receive $84 per employee. Nearly 30 percent of the tax revenue would fund renewable-energy and energy-efficiency projects, especially in low-income neighborhoods. Proponents of the fee on carbon say the state’s economy is further enhanced by keeping most of the nearly $4 billion Rhode Island spends annually on fossil fuels within the state.

During a Jan. 31 press event at the Statehouse for the bills, Kevin O’Neill, owner of the Cumberland-based Conference Exchange, said a carbon tax and dividend would help his software business of 50 employees. Any business that opposes the program, he said, hasn't done its homework.

“This bill will not kill our economy,” O’Neill said. “We can handle this.”

The sponsor of the House bill, Rep. Aaron Regunberg, D-Providence, noted that he joined a conference call that morning with lawmakers from nine states to launch the Carbon Costs Coalition. The group promotes state-level legislation for carbon-pricing programs. In addition to Rhode Island, the states include Connecticut, Massachusetts, Maryland, New York, New Hampshire, Oregon, Vermont, and Washington.

“We’ve seen in this country that people are dying because of a lack of action on climate,” Regunberg said. He chided President Trump for ignoring climate change during his State of the Union address and noted that Trump instead bragged about “beautiful clean coal.” Any action on climate change, Regunberg said, must come from state initiatives.

One of the primary selling points for the bill is that it includes a “trigger clause,” meaning that it only takes effect if Massachusetts and another state in the Northeast adopts a similar program. Specifically, one of the states must be a member of the Regional Greenhouse Gas Initiative (RGGI), a nine-state coalition that raises revenue for cleaner energy projects by placing a fee on carbon dioxide emissions from power plants.

Raimondo frequently touts the success of RGGI and seems inclined to support a carbon-fee program that’s linked to the regional coalition. But, so far, Raimondo hasn't endorsed a specific plan.

“The governor is committed to tackling the problem of climate change with every tool at her disposal. A carbon pricing plan needs a regional approach that cooperatively addresses the benefits and impacts of such a policy. She supports the concept of a carbon-pricing system, but would need to review any final legislation once it reaches her desk,” said a governor's spokesperson after the Jan. 31 press event.

During the previous two years, hearings were held for the matching House and Senate bills, but were ultimately passed on to their respective finance committees to die. Business groups such as the Rhode Island Public Expenditure Council opposed the bills, claiming higher energy costs for businesses.

But supporters of the legislation say the benefits to the economy are immediate, with a $140 million annual infusion, while long-term public health and the fiscal toll of climate change are lessened.

“It creates thousands of jobs and really allows us to control our future,” said Brown University professor J. Timmons Roberts, a leader with the EnergizeRI Coalition.

The bills are expected to be introduced in the House and Senate this week. No hearing dates have been scheduled.