Roper: ‘Non-pricing’ carbon reduction relies on carbon pricing

By Rob Roper

The House Appropriations Committee heard testimony last week on what is being billed around the Statehouse as “Non-Pricing Approaches to Reducing Carbon Emissions.” “Pricing” is the euphemism for carbon taxes. “Non-Pricing” approaches refers to government programs, such as weatherization, building electric vehicle infrastructure, etc. What we learned is, not surprisingly, non-pricing options require — drumroll, please — pricing! A carbon tax to generate the revenue to pay for these programs.

Rob Roper

Rob Roper is the president of the Ethan Allen Institute.

This testimony follows the off-session study of Vermont’s carbon reduction options, which found that a carbon tax — even one as draconian as the VPIRG 88 cents per gallon on gasoline/ $1.02 per gallon of heating oil — would have practically zero impact on Vermont’s carbon footprint. This is because there are no ready substitutes for vehicle and home heating fuels for people to switch to and Vermonters still have to get to work and stay warm in the winter. They can’t change their behavior even if they wanted to. Moreover, if the promise is to cycle all the tax revenue back to taxpayer through rebates, lower taxes elsewhere, or some other such scheme (a revenue neutral tax), there is not enough pain generated to force a change in behavior.

So, what the climate change activists are now arguing is for programs — subsidies for electric vehicle purchases, building electric vehicle charging stations, more weatherization subsidies, 100 percent renewable energy standards — which the study claims would be more effective in lowering our CO2 output. None of this, mind you, would have any impact on future climate trends. It’s all just ‘cuz.

Nevertheless, testimony from the Regulatory Assistance Project argued for more $600 million in new program funding over the next ten years. And, where will they get that $600 million? Carbon taxes.

“Carbon revenue is required,” said Richard Cowart, director of the Regulatory Assistance Project. “In my opinion we should be using carbon revenues [new carbon taxes] to pay for a carbon reduction program.”

For the past two years the sweetener pitch to Vermonters from the carbon taxers was that it would be revenue neutral. We never really believed that, arguing that with a huge pile of money pouring into Montpelier it wouldn’t take long before the politicians decided that, despite past promises, it would be better if they just kept the cash and spent it themselves. That time, judging by the fluttering, sugar-high-excited reaction of the money committee, appears to be now.

Rob Roper is president of the Ethan Allen Institute. Reprinted with permission from the Ethan Allen Institute Blog.

Image courtesy of Public domain

2 thoughts on “Roper: ‘Non-pricing’ carbon reduction relies on carbon pricing

  1. A carbon tax would just decrease VT’s population from 650,000 to around 200,000.For every Vt. student in elementary school you will have a teacher and an assistant.Laying off teachers is just unthinkable!

    On the upside,Vt. will emit less carbon with 2/3 of the population gone.

  2. Vermonters need carbon taxes like another hole in their heads.
    What are these legislators thinking?
    Don’t they know tens of thousands of Vermont households outside of the havens of Burlington and Montpelier already are severely stressed in the near zero growth Vermont economy.
    Every time The economy shows some life, a new tax is imposed like a wet blanket.

    The Vermont Comprehensive Energy Plan, CEP, goal aims to “transform” the Vermont economy. It would require investments of about $33.3 billion, about $1 billion per year for 33 years, during the 2017 – 2050 period, per Vermont Energy Action Network 2015 Annual Report. The CEP could not be implemented without a very high carbon tax and other taxes, surcharges and fees of at least $970 million per year for 33 years.

    Carbon Tax Impact On A Typical Vermont Family, as reported on VTDigger:

    Any tax, including a carbon tax, passing through the hands of government suffers from “the sticky fingers syndrome”, 2 dollars go in about 1.5 dollars come out. The difference stays to feed the growing government bureaucracy.

    The key word missing in most discussions is UNILATERAL. VT’s government imposing on Vermonters a unilateral carbon tax is like shooting them in the feet.

    If the carbon tax were nationwide, I would support it.

    The carbon tax would:

    – Impose a $10/ton tax of carbon emitted in 2017, increasing to $100/ton in 2027.
    – Generate about $100 million in state revenue in 2019, about $520 million in 2027.
    – Be added to the fuel prices at gas stations and fuel oil/propane dealers.
    – Drivers should expect a tax increase of 9 c/gal of gasoline in 2018, increasing to about 89 cents in 2027.
    – Homeowners, schools, hospitals, businesses, etc., should expect a tax increase of 58 c/gal of propane and $1.02/gal of heating oil and diesel fuel in 2027.
    – A typical household (two wage earners, two cars, in a free-standing house) would pay additional taxes in 2027 of about:
    – Some of the carbon tax extortion would be at the pump, some when the monthly fuel bills arrive, and some as higher prices of OTHER goods and services.

    Driving = $0.89/gal x 2 x 12000 miles/y x 1/(30 miles/gal) = $712/y
    Heating = $1.02/gal x 800 gal/y = $816/y
    Total carbon tax in 2027 = $1528/y
    Sales tax reduction 5/6 x 1400 = $233/y
    Net tax increase = $1295/y

    – The hypocritical sop of reducing the sales tax from 6 to 5 percent would save that household about $233 in sales taxes, for a net loss of $1295 in 2027. That means such households, the backbone of the Vermont economy, would have about $1300/y less to make ends meet.
    – Many of these households have had stagnant or declining, spendable real incomes (after taxes, fees, surcharges; other recurring expenses, etc.), plus dealing with a near-zero, real-growth Vermont economy, since 2000.
    – With less real income, and higher real prices for goods and services, they also would have to make their own energy efficiency improvements.

Comments are closed.