HR 17 ignores global trends and local carbon cashback benefits
John Gage of Windham is an NH State volunteer coordinator for the Citizens’ Climate Lobby.
Say no !” to a tax may seem like a no-brainer in New Hampshire, but things aren’t always what they seem. HR 17, a New Hampshire House resolution against carbon pricing, is fatally flawed in three ways:
The most supported carbon pricing bill in Congress in 15 years, the Energy Innovation and Carbon Dividend Act, gives the proceeds of a pollution charge paid by fossil fuel producers and importers to all families Americans equally – it’s not a tax.
By the end of this decade, the United States will either price carbon pollution (and potentially hand the money back to families) or pay our trading partners for our free riding (and put American manufacturers in a competitive position increasingly disadvantageous).
If we fail to reduce global climate pollution by 50% in this decade, we will place enormous burdens on ourselves, on nature and on future generations.
As a bonus, carbon pricing takes away profits from the sale of fossil fuels, so it’s also a powerful way to counter Russian aggression.
The state of New Hampshire is ranked 47th in carbon emissions (EIA). During the HR 17 committee hearing, a co-sponsor said our relatively small contribution means we are already doing enough. She must not realize that if Congress passes the Energy Innovation Act, residents of states with low carbon emissions per capita will benefit the most. Citizens in our region will enjoy an average annual per capita gain of $1,000 in after-tax income (twice the national average) by year ten (REMI report). Couldn’t most people use a little extra cash these days?
Likewise, since the United States produces less carbon emissions per unit of economic output than developing countries, a border-adjusted US carbon price will make our manufacturers more competitive in trade with most other countries. . For example, a price on pollution will make cleaner American steel cheaper than dirty steel from China. Perhaps more importantly, border adjustments are the only way to hold other countries accountable for their pollution, and WTO GATT trade rules say they can only be used in combination with a price. explicit carbon.
More than 100 countries have pledged to reduce their carbon emissions to net zero by 2050. Almost all economists agree that pricing carbon is the most cost-effective way to reduce this pollution, and 64 carbon pricing systems covering 21% of global emissions are active. However, the full potential of carbon pricing remains untapped because prices in most countries are too low (World Bank). A high price can be achieved by using the approach that nearly all of the major US economists believe is the fairest: carbon pricing with cashback. Watch Dartmouth College economics professor Charles Wheelan explain how it works at carboncashback.org/carbon-cash-back. You can also sign up to see it on March 28 at newhampshirenetwork.org/events.
Some regions are on the right price track. The EU carbon price recently reached $110 per tonne of CO2 from fossil fuels. The EU will start using a border adjustment in 2026 to charge its price on imports from free-riding countries. Canada is using cash-back carbon pricing to reach $135 in 2030 and is considering adding border adjustments. The United Kingdom and Japan are too.
Why should New Hampshire care? As long as the United States does not have a price on carbon, we are free-riding. On this path, our exporters will soon be paying other countries for our free carbon pollution when we participate in their markets. That’s money we could keep in our own economy by pricing carbon here. If we don’t, these countries will decarbonize faster, which will make our producers less competitive over time. The writing is on the wall: carbon pricing is coming soon.
How should we do it? Economists recommend imposing an ever-increasing, border-adjusted federal carbon tax on fossil fuel production and imports (carbon tax and dividend), and we should start now. The IPCC’s minimum global target carbon price is $135 in 2030 for the 1.5˚C goal. We can either get there gradually like Canada (in annual $15 increments) or all of a sudden later this decade. The blanket approach would shock the American economy, American businesses and New Hampshire families, and a delay would necessitate an even higher price to make up for lost time.
HR 17 attempts to remove the political will from federal carbon pricing just when our state legislature should be helping Congress act. The Energy Innovation Act was a bipartisan bill in the previous two sessions of Congress and now has 95 co-sponsors (more than ever before). New Hampshire leaders can help achieve this with personal endorsements and with a resolution asking Congress to do so.
We also need to prepare. A request to Governor Sununu offering ideas on how to proceed that recommends implicit carbon pricing, increasing investment in energy efficiency and electrification, accelerating support for clean energy deployments, and discouraging gas heating or cooking expansion.
HR 17 is a test for the New Hampshire State Legislature. Will he oppose this resolution and instead defend solution number 1 recommended by the experts, bipartisan, beneficial and comprehensive to deal with a serious threat of pollution? If our representatives listen to the overwhelming public opposition to HR 17 expressed at the hearing (149 to 4), they will.