By John McClaughry

The Vermont House is struggling to deliver a Clean Heat Standard bill to comply with a carbon dioxide emission reduction mandate that the legislature itself declared in 2020.

In that year, in the Global Warming Solutions Act (GWSA), the legislative majority mandated that Vermonters take large, painful steps to drive down their carbon dioxide emissions by eighty percent just 27 years from now. That reduction would be Vermont’s share of the global reductions enthusiastically agreed to by President Obama and 193 other nations in Paris in 2016, to combat “climate change.”

John McClaughry is vice president of the Ethan Allen Institute.

In December 2021 the GWSA-created Vermont Climate Council — our climate government within the government — produced its Climate Action Plan. It proposed urgent steps to drive down emissions from transportation and heating, that together constitute around 75% of emissions.

The 11-state Transportation and Climate Initiative was supposed to tax gasoline and diesel fuel to stimulate people to switch to electric vehicles. That grand scheme soon collapsed when the governors involved learned that businesses and motorists would not accept a hefty and rising carbon tax on motor fuel.

The climateers then turned to the heating sector. The obvious way to drive down heating fuel emissions is to levy a punitive and steadily increasing carbon tax on heating oil, propane, natural gas, and kerosene. But most voters want nothing to do with carbon taxes on their heating fuel (or anything else).

So the Vermont Climate Council rolled out the Clean Heat Standard. Instead of an actual tax, this ingenious scheme relies on extracting millions of dollars through higher prices paid by heating fuel users, to subsidize people to replace heating fuel with electric heat pumps and pellet stoves. The bill requires heating fuel distributors to somehow identify and protect lower income customers from the higher fuel prices.

Vermont Gas Systems, a regulated monopoly, supports CHS because its customers’ rates are set by the Public Utility Commission chaired by an outspoken climate warrior. Green Mountain Power supports it because of all the electricity to be sold to heat pump purchasers. Both are pleased to see over a hundred Vermont-owned heating fuel distributors take the heat for the CHS-imposed higher fuel prices required to buy the PUC’s credits or pay a “noncompliance penalty” of four times any shortfall. Both VGS and GMP are owned by energy giant Energir of Montreal.

The climateers weren’t clear how this complicated PUC credit system would work, but they pushed CHS to a vote last May. Gov. Scott vetoed the bill. When his veto was sustained by a single vote, the disappointed climateers vowed to go all out to win in 2023.When the Senate took up the CHS bill last month, its members were swamped by disapproving phone calls and emails.
Nonetheless the Democratic leadership and its majority on the Vermont Climate Council continue to drive the CHS through, after relabeling it the “Affordable Heat Act.” (That was so obviously fraudulent that the now Senate-passed CHS bill bears a new 22-word title.)

Live-streamed deliberations in the Senate Natural Resources and Energy Committee revealed that the members had little grasp of how the intricate CHS could be made to work in practice, or where the skilled workforce could be found to install new equipment and upgrade electrical circuits.

As independent reporter Rob Roper observed, “the labor force does not exist in Vermont to perform the work on the timeline required by this law. The social equity requirements in the bill protecting low income Vermonters are unsupported and unenforceable. The guidelines for creating a financial market for establishing and managing ‘Clean Heat Credits’ are wildly unrealistic and ripe for fraud and abuse.”

On March 3 the Senators approved the CHS 18-10 and sent it to the House. The one salutary amendment was a “checkback” provision that requires a recorded vote by legislators before this mighty engine of fuel price inflation can be launched in 2025. Their House counterparts may not be so responsible. That provision may well be the crucial issue in play when the two chambers meet to reconcile their different versions of the measure.

Gov. Scott has now gone well beyond observing that no one clearly understands how this complicated credit scheme can be made to work. In a March 1 news conference he said “we cannot ignore the fact that there are significant upfront costs which could be regressive and harmful to low-income Vermonters.” He might well have included the vast middle class.

Even veteran environmental activist Annette Smith, head of Vermonters for a Clean Environment, has taken to describing this stumbling, heedless rush to cut emissions, no matter what the cost, as the work of “a religious cult. … The Statehouse is populated by a climate claque whose only villain is carbon emissions. Nothing else matters to these true believers. They are driven by the fear that if the monster of fossil fuel emissions is not vanquished, the world will end.”

No, the world won’t end, but if they can override a likely Scott veto, the Democratic legislative majorities will commit to extracting over $2 billion in tax dollars from Vermont’s heating fuel customers, to advance an unworkable scheme that even its advocates can’t explain — unless thousands more emails and phone calls jolt them back to reality.

John McClaughry is vice president of the Ethan Allen Institute.