Most people recognize that climate
change is happening, that it is caused by burning fossil fuels, and
that it has serious environmental and health consequences. The
challenge to our generation is how to counter the trend of increasing
concentrations of CO2 and other greenhouse gases (GHGs) in
the atmosphere. The most obvious action is to reduce our consumption
of fossil fuels.
Our economy and lifestyle depends
heavily on fossil fuels for electricity, heating and transportation.
We successfully continue to transform our electric generation to
renewable, clean sources, making Vermont's electric supply among the
cleanest in the country while keeping our electric rates the second
lowest in New England. However, despite our goal of reducing
Vermont's GHG emissions by 25% compared to 1990 levels, our GHG
levels have instead increased by 4%. We cannot be successful
unless we address fossil fuel consumption in heating and
transportation.
A proposal currently being considered
called the ESSEX Plan, an Economy Strengthening
Strategic Energy EXchange,
was developed by a group of environmental advocates, business people
and legislators over the last summer and has been introduced as
Senate bill S.284. The goal of the plan is to move dependence on
dirty fossil fuels to Vermont's clean electric energy by discouraging
use of fossil fuels and encouraging a transition to electricity for
heating and transportation. Here is how the plan works.
The EPA during the Obama administration
calculated the “social cost of carbon pollution” to health and
the economy to be $40/ton. Based on this number the plan starts at
$5/ton of CO2 (5 cents/gallon) and rises steadily to
$40/ton (40 cents/gallon) over an 8 year period. The revenue
generated goes back to Vermonters in the form of a rebate on electric
bills. About $30M would be raised the first year and grows to $240M
when the price tops out in eight years. This money would go into a
special fund which would be drawn on for the rebates. Each month the
amount collected would be allocated to each utility based on its
electricity consumed for that month. That share would then be
allocated based on whether the revenues came from the commercial,
industrial or residential side of fossil fuel consumption. The
rebates would be based on the amount of a customer's electricity
usage. The revenues from the commercial and industrial customers
would be rebated to them. The revenues from the residential customers
would be divided based on income and geography.
Of the residential revenue 50% would be
rebated to all residential customers, 25% would be rebated to
customers in rural areas, and another 25% would be rebated to low
income customers. Low income Vermonters in rural areas would get both
bonus rebates. This formula is in recognition that Vermont is a rural
state that requires longer commutes for rural residents and that low
income residents pay a proportionally higher share of their income on
energy costs. This strategy should encourage Vermonters to use less
fossil fuel by transitioning to technologies like cold climate heat
pumps, electric vehicles, mass transit, carpools and other strategies
to reduce their carbon footprint.
So, how does this strengthen the
state's economy? First of all, it makes Vermont more affordable.
While electric rates themselves won't be affected, the carbon
rebates, itemized on consumers' electric bills, will significantly
decrease the net cost of electricity. Vermont's already low rates
relative to our neighboring states will be even more attractive to
businesses. Secondly, Vermont is not a source of fossil fuels, so 80
cents of every dollar spent on fossil fuels leaves Vermont. On the
other hand, Vermont's electricity is increasingly sourced within the
state or region, keeping millions of dollars of energy spending in
Vermont. Third, transitioning from fossil fuels to electricity will
add more well-paying green jobs to the 17,500 already created in
Vermont. Finally, we are not alone. Vermont's New England neighbors
and New York are poised to introduce their own carbon pricing
legislation in the coming weeks making this a regional effort.
This method of carbon pricing is
innovative and environmentally and economically beneficial. I look
forward to a productive dialog about this plan and will host an
informational forum on the topic at the Charlotte Senior Center on
February 12 at 7:00 PM. I hope to see you there.
As always, I can be reached by phone
(802-233-5238) or by email (myantachka.dfa@gmail.com).
