Details on all carbon taxes proposed by all six New England states are out!
Raised Bill 1064, An Act Establishing a Carbon Price for Fossil Fuels Sold in Connecticut, is proposing a carbon tax scheme identical to carbon tax billed raised the previous two years in Connecticut and may be viewed here.
Massachusetts has two bills in play, House bill H-2810 and Senate bill S-1924. Each imposes different levels of carbon taxes, and spend the money differently. Please see the MA tab for details.
In New Hampshire, H.B. 735 is a similar bill in construct, thought the tax formula is somewhat different from Connecticut's. See the NH tab for details on this bill.
Maine's bill, H.P. 343, takes a rather different tack. While imposing a carbon tax on various fuels, it carves out electricity from the tax, unlike CT and NH. That's because it's trying to promote the electric utilities; and in fact the bill proposes that electric utilities be the beneficiaries of all the taxes collected, for them to dispose of in some undisclosed manner to ratepayers. See the ME tab for details.
Rhode Island's bill is also out. Though outwardly similar to other New England states, it seems to leave a lot of discretion to state officials controlling the taxes collected. Evidently they can change the tax rate, and how the money is distributed at their whim, without any enabling legislation. Please see the RI tab for more details.
For Vermont, we show two bills. Like Maine, Vermont saves the electric utilities from having to pay the tax. One of the proposed bills even gives the tax money to the electric utility to let them disburse credits to ratepayers. Given the way this is structured, there's no connection between how much you pay in tax and how much you get back from the utility. See the VT tab for details.
The titles for all these bills is a misnomer - it has nothing to do with the pricing of fossil fuels. Rather, the bills establish a new tax, plain and simple, to be collected by the state taxing authority at the first point of sale in the state of energy products.
How much is the tax?
The Connecticut tax starts at $15 on each ton of carbon dioxide (CO2) emitted or used by various energy sources to "produce heat, electricity or motion." The only energy sources exempted are electricity generated from hydro or nuclear sources, and some biofuels. That means the tax is imposed on all gasoline, diesel, electricity (other than noted above), heating oil, propane, kerosene, and natural gas. See the respective tabs for how Vermont, New Hampshire and Maine work.
How long will the tax last?
As mentioned, the tax starts at $15 per ton of carbon dioxide, and then increases every year, forever. The increase is $5 per ton of CO2 every year; so that while it starts at $15/ton in the first year, 2021, it's $35/ton in year 5, and $60/ton in year 10, ad infinitum! No other tax in the world is structured like this, not even Maine's or New Hampshire's.
The only purpose of these bills is to force consumers to stop using gasoline, diesel, heating oil, propane, natural gas and even electricity (that isn't fueled by wind or solar), while the rest of the country doesn't have to. The radical ideologues who support these bill won't be satisfied until we're living back in Stone Age conditions.
Note in the case of Connecticut's bill, some portion of the tax is refunded as a tax credit every year to residents and businesses. What this means is that throughout the year, everyone in the state is paying the tax, and only will receive a partial refund at the end of the year. This will impose a cash hardship on people, especially low-income residents of the state. The refund is the same for everyone, regardless of how much fuel one uses or one's income. Thus the tax is highly regressive. And since you are getting a partial refund, you will be less inclined to stop using fuel and pay the increasingly higher prices, and businesses are likely to pass on to consumers the increased costs imposed on them from the tax, even if they're getting a partial refund as well. That means the tax is highly inflationary, and the partial refund defeats the purpose of the tax of forcing people to stop using fuel entirely.
What does this mean for me in dollar terms?
If you heat with fuel oil, the carbon tax in Connecticut will cost you 16.80 cents per gallon in the first year, 39.20 cents per gallon by the fifth year, and 67.20 cents per gallon by year 10. And since the tax continues to go up forever, it will eventually cost you an infinite number of dollars, strange as that may sound. In dollar terms, your heating costs (based on 800 gall. annual consumption) will go up $134 in year 1, $314 in year 5, and $538 in year 10. See the tabs for Maine and New Hampshire for the effect of the taxes in those states.
The tax on gasoline in Connecticut will be 14.70 cents per gallon in year 1 costing you an additional $96.43; 34.30 cents per gallon in year 5 costing you $225.016, and 58.80 cents per gallon in year 10 costing you $385.73. This is in addition to the 25 cent/gallon state excise tax on gasoline, the 18.4 cents/gall. federal excise tax, the 8.81% state gross earnings tax on gasoline, and any tolls you may have to pay.
The cost of diesel for trucks in Connecticut will go up 16.80 cents per gallon in the first year, costing a $490 per truck, increasing to almost $2,000 per truck by 2030. That increased transportation cost will be passed on to consumers in the form of higher prices for food, prescription medicines, clothing, and more.
Heating your home with propane in Connecticut will cost you 9.53 cents/gall. with the tax in year 1, or $95.25 (on 1000 gall consumption); and 22.23 cents/gall. in year 5 or $222.25 more; and 38.10 cents/gall. more in year 10 or $381.00.
If you heat your home with natural gas in Connecticut, its carbon content is about 11.71 lbs of CO2 per ccf. A typical home uses 1000 ccf per year, so the tax in year one for gas users will be about $87.82; in year five it will be $204.92; and in year ten it will be $351.30.
And remember, while these numbers only project the tax burden out ten years, the tax in fact will increase arithmetically forever.
According to ISO-New England, about 49% of electricity is generated at power plants with natural gas, about 1% with coal, and 1% with diesel. These all will result in a pro-rated carbon tax of of about $0.00156/KWhr in year 1, increasing to abut $0.00626/KWHr in year 10, resulting in a carbon tax bill for the average residential consumer of $18.77 in year 1 and $75.08 in year 10.
EXAMPLE: Suppose you heat with heating oil, drive two cars, and use electricity. Your tax in year 10 (2030) will be $538 for heat, $771 for gasoline, and $75 for electricity for a total tax bill during the year of $1,384! And that's just the tax, not the cost of any of the fuels or electricity themselves, nor the cost of every product you purchase which will all go up as merchants pass on the tax costs to you.
More breaking news
Some mayors in the northeast have come out in favor of carbon taxes. The mayors include Burlington, VT; Somerville, MA; Salem, NH; Winooski, VT; Ithaca, NY; Montpelier, VT; and Middletown, CT, whose mayor, Dan Drew, is a failed gubenatorial candidate who is not running for re-election. Article can be found here. There's no indication whether this position is just a personal view of these mayors, or is the official view of their towns.
In related news, Vermonters rallied against carbon taxes on January 9, 2019. Article here. Like the protesters in France, many wore yellow safety vests. According to organizers, 75 people protested the tax.
Though known as a very liberal state, even Vermont rejected a carbon tax earlier last year, known as the Essex plan. Article here.
Please click on state tabs above for state-specific information
Breaking news: Boston Globe Op-Ed
Boston Globe Opinion-Editorial: Published on April 27, 2019
NO ON CARBON TAX LEGISLATION
President, Massachusetts Energy Marketers Association, based in Burlington; Essex resident
Authors, cosponsors and supporters of legislative proposals on Beacon Hill to establish a carbon tax on fossil fuels maintain the tax is the remedy for combating climate change, but any such tax will substantially increase the cost of living for every resident in Massachusetts, hurt small business owners, damage the state’s economy, and provide no proven impact on reducing greenhouse gas emissions.
The two key proposals before the Legislature – Senate 1924 and House 2810 – would levy a tax on most energy resources in Massachusetts - including home heating oil, propane, natural gas, gasoline, and diesel fuel to discourage fossil use resulting in reduced carbon dioxide. H-2810 exempts electricity but = it’s unclear to us whether the already sky-high electric rates in Massachusetts would be impacted by a carbon tax under Senate 1924.
Using carbon dioxide emissions coefficients published by the US Energy Information Agency, my organization calculates that homeowners using heating oil statewide would pay an additional $487 annually by 2030 under Senate 1924, and $582 more per year if House 2810 becomes law. Furthermore, we estimate that carbon taxes will add an additional $700 to $835 to annual household costs for gasoline in the state.
Addressing climate change and the requirements mandated by the state Global Warming Solutions Act of 2008 are laudable goals that our industry supports. But there are more sensible pathways to achieving these goals without burdening residents with additional taxes on the necessities of life. Let’s focus on improved energy efficiency in homes and businesses to further reduce the volume of heating oil, natural gas, and propane currently being used; producing more electricity through renewable sources; and continuing to expand the use of clean, renewable biodiesel blended with heating oil.
In recent months a fuel tax increase in France - effectively a carbon tax - caused petroleum prices to spike and gave rise to nationwide protests and the creation of the international “yellow vest movement.” And carbon tax legislation has yet to win approval in any other state in the nation.
Lawmakers on Beacon Hill should be mindful of these developments and reject draconian carbon tax proposals.
Breaking News: New Infographic on carbon tax effect in Connecticut
Infographic can be downloaded here.
French President Macron backs down on carbon tax on fuel
From the Wall St. Journal, December 4, 2018
France’s violent Yellow Vest protests are now about many domestic concerns, but it’s no accident that the trigger was a fuel-tax hike. Nothing reveals the disconnect between ordinary voters and an aloof political class more than carbon taxation.
The fault line runs between anti-carbon policies and economic growth, and France is a test for the political future of emissions restrictions. France already is a relatively low-carbon economy, with per-capita emissions half Germany’s as of 2014. French governments have nonetheless pursued an “ecological transition” to further squeeze carbon emissions from every corner of the French economy. The results are visible in the Paris streets.
President Emmanuel Macron and his Socialist predecessor François Hollande targeted auto emissions because they account for about 40% of France’s carbon emissions from fuel combustion compared to 21% in Germany. But this is mainly because France relies heavily on nuclear power for electricity. Power generation and heating account for only 13% of French emissions, compared to 44% across the Rhine. French road-transport emissions were a mere 0.4% of global carbon emissions in 2016, when overall French emissions were less than 1%.
Yet Paris insists on cutting more, though transport emissions are notoriously hard to reduce. Cleaner engines or affordable hybrids have been slow to emerge. Undeterred, Mr. Macron pushed ahead with a series of punitive tax hikes to discourage driving.
The protesters in Paris will be expected to pay much of the up to €8 billion annual tab for a minuscule global benefit—that’s how much tax revenue Mr. Macron thinks his levies will raise. This is preposterous in an economy that still has an 8.9% jobless rate (21.5% for the young) and will struggle to hit 2% annual GDP growth. Yellow Vests from less prosperous rural areas, who depend on cars for daily life, know it. They’re insulted when Mr. Macron tells them to wait for better public transport or to carpool—yes, he really said that. They also assume that Paris will waste a fuel-tax windfall on boondoggles such as unreliable renewable power to replace zero-emissions nuclear plants.
The carbon tax revolt is world-wide. Voters in Washington state last month rejected a carbon tax that would have started at $15 per ton of emissions and climbed $2 a year indefinitely. Washington ranks 25th among American states in carbon emissions and when we tried to estimate its contribution to global emissions our calculator couldn’t handle a number that small. Gov. Jay Inslee and green activists nonetheless wanted voters to pay $2.3 billion in taxes over five years.
Ontario province in Canada is suing to block a federal carbon tax, and the issue could topple the Alberta government and perhaps Prime Minister Justin Trudeau. Ontario Attorney General Caroline Mulroney warned that the federal tax grab “takes money from families’ pockets and makes job creators less competitive.”
German Chancellor Angela Merkel’s Energiewende—a transition to renewables that has increased dirty coal emissions and caused household energy costs to soar—has become a political liability.
A carbon tax is in theory a more efficient way than regulation to reduce carbon emissions. But after decades of global conferences, forests of reports, dire television documentaries, celebrity appeals, school-curriculum overhauls and media bludgeoning, voters don’t believe that climate change justifies policies that would raise their cost of living and hurt the economy.
Contact your legislator personally
Despite worldwide opposition to a carbon tax, you can expect the new Lamont administration in Connecticut to favor it. Given the popularity of the idea of a carbon tax among many Democrats (as noted on this site, Democrat legislators have proposed a carbon tax this year as well as in each of the last two years) in the legislature, only you can stop the tax.
Your state senator or state representatives are public servants and they want to hear from you on this subject. We urge you to testify against a carbon tax in any hearing, and to submit written testimony. You can be sure the proponents of carbon taxes are lobbying their legislators heavily. Watch this site to see what the incoming Lamont administration favors.
Photos: The photo at the top of this page is from an actual session of the Connecticut General Assembly. Photos on other tabs show the respective legislatures of each state.