People, Planet & Peace
The Massachusetts Affiliate of the Green Party of the United States
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Mass. Carbon Tax and Policy Forum, January 2015

Shepherd: Brian Cady briancady413>at<yahoo>dot<com

Cosponsors: Elie Yarden & Daphne Stevens

Vetting Committees: Platform

Explanatory Background:

A carbon tax by referendum was sought last year by the Committee for a Green Economy (CGE). StateComm found the proposed law flawed. By sponsoring a forum on a second carbon tax and policy proposal to Massachusetts, and supplying a panel speaker, the GRP can help shape this policy, and help Mass. avoid Australia's disasterous and unpopular carbon tax, which fell along with the government that passed it. Meanwhile, in British Columbia, a successful carbon tax remains popular and effective.

Brian Cady is exploring the possibility of a forum with Gary Rucinski, as well as with David Doucette and a few others. Gary worked on last year's MA revenue-neutral carbon tax proposals, and helped get an economic forecast of the costs and benefits of a MA carbon tax done. David Doucette has critiqued this MA carbon tax proposal study by REMI, and evaluated the popular British Columbian and unpopular Australian carbon taxes and policies, and put together interesting thoughts on what makes the B.C. one work so well. Here's a  40 minute youtube of Dave presenting on this.

Here is a presentation as a .pdf, by Dave on Carbon Taxation in MA. Here is David Doucette's comparison of Brit. Colombia and Massachusetts, and here is his critique of the Mass. carbon tax concept.

Overall StateComm had serious reservations about the MA Carbon Tax legislation proposed by Comm. for a Green Economy last year. I imagine some within GRP would have contributions to this year's discussion, and that all together we could help form an effective state carbon policy.

I picture two forum foci;
1) What should MA carbon tax or policy be?
2) How best enact such a policy?
Under 'What...', I imagine addressing:
Carbon tax or not? Why?
Revenue-neutral or not?
Is the REMI forecast useful?
Is mass. carbon release increasing or decreasing?
Have recent MA carbon price hikes reduced carbon use, like a carbon tax is expected to?
How can recent discoveries in behavioral economics help create good carbon policy in MA?
Under 'How best...' I envision:
Referendum or legislatural route?


Please feel welcome to contact me about this.

Summary:  The GRP co-sponsors a Mass. state carbon tax & policy forum the evening of Monday, Jan 5th. in Boston, in conjunction with other organizations.

Cost: To be recovered by door donations, Site/Venue $200? Outreach $200? Panelists expenses $500?

Implementation: Brian Cady will gather other organizational co-sponsors, inquire after venues/sites, seek a host/Master of Ceremonies, and a Green Party representative to serve on the forum's panel. Brian will, before any commitments are made, get approval from adcom. Brian will invite Mass. legislators and elected officials, too.

 

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Showing 14 reactions


commented 2014-10-05 10:35:34 -0400 · Flag
The successor to the Committee for a Green Economy appears to be Climate-Xchange. I attended a presentation at the Coop-Power Sustainability Summit by Dan Gatti, Executive Director of Climate XChange (and resident of Northampton). This time around, they are talking about a revenue-neutral plan where the carbon tax would be returned in equal per-person payments (half payments for each child), instead of as reductions in other taxes. I had a long discussion trying to convince Dan Gatti that any tax on carbon-based fuels needed to include all carbon-based fuels — he had excluded wood and biomass on the fallacious idea that wood is carbon neutral. The reality is burning wood doesn’t plant trees, and trees don’t care where the carbon they pull out of the air (as CO2) came from. The overnight release of carbon by wood burning and 100 year (re)sequestration of carbon by tree growing need to be treated separately. We’ll see if their proposal changes to include wood, as their tax mechanism only taxed fuels coming from out of state. http://www.climate-xchange.org
commented 2014-10-01 23:06:50 -0400 · Flag
Hi Joanna,

Thanks for your note. The REMI study has been critiqued by David Doucette. His crtique originally interested me in such a forum. Now Doucette isn’t a green.
Wayne Clark is, and is an economist and may serve on the panel or even host the panel.
Frank Ackerman recommended Elizabeth Stanton, Marc Breslow and James Boyce to me.
You raise interesting questions about why the REMI study looked at certian forecasts and not others. I don’t know whether these were arbitrarily chosen by REMI or by CGE, the committee for a green economy, the group that commissioned REMI.
There is a carbon tax info website: Carbon Tax Center – Pricing carbon efficiently and equitably
It may answer some questions on what is revenue neutrality ususally defined as.

Brian
commented 2014-10-01 20:54:30 -0400 · Flag
Would like to comment that what concerns me most is the assumptions of the REMI study. The economic modeling is surely based on standard (i.e. of conventional professional ecomists’) econometric assumptions. Why were variations limited to level of carbon tax imposed rather then how funds received were distributed? Specifically, where the study might have looked at distribution (percentages allocated to reductions in income tax, sales tax, corporate tax—these were not part of the inquiry. The figures were run only on the amount of tax levied. )

Maybe models couldn’t show it, but I would like to know what might happen if carbon taxes were strictly revenue neutral. This, I would assume, would mean that revenue would not be allocated by the government, but returned to taxpayers. Not clear to me whether the modelling of 50% corporate tax reduction fulfills this. Does corporate tax represent 50% of state tax income. There may be other reasons why this is not the best model, however.

Joanna
followed this page 2014-10-01 20:26:23 -0400
commented 2014-09-26 05:56:16 -0400 · Flag
There’s an interesting article on revenue-neutrality by Ben Adler at:

http://www.motherjones.com/environment/2014/08/stop-dreaming-republicans-wont-back-carbon-tax

‘Stop Dreaming. Republicans Are Not Going for a Carbon Tax.
They don’t accept climate science. And a payroll tax deduction would only entice them if they cared about the tax burden on poor people.’ Ben Adler

Another possible discussion surrounds whether recent carbon price hikes, with little reduction in Massachusett’s fuel use, together show that a carbon tax wouldn’t reduce carbon release.

I have attracted the interest of some economists (some of whom will be in Boston in early January for the Amer. Econ. Ass’n.’s annual meeting). Economist and lucid author Frank Ackerman of Boston is considering, as are Elizabeth Stanton, also of Synapse-Energy, Nicolaus Tideman of Virginia Tech, Mason Gaffney of UCal Riverside, and Marc Breslow of Boston, as well as futurist Hazel Henderson, author of Ethical Markets.

I picture two foci;
1) What should MA carbon tax or policy be?
2) How best enact such a policy?

Under ‘What…’, I imagine addressing:
Carbon tax or not? Why?
Revenue-neutral or not?
Is mass. carbon release per capita increasing or decreasing?
Have recent MA carbon price hikes reduced carbon use, like a carbon tax is expected to?
How can recent discoveries in behavioral economics help create good carbon policy in MA?

Under ’How best… enact" I envision:
Referendum or legislatural route?
Would MA Republicans support even a revenue-neutral carbon tax?

I look forward to talking with you all about this, and hope to work together.

Brian Cady
commented 2014-09-26 05:37:37 -0400 · Flag
HI John and Gus,

The language of the proposal does include that one panel speaker will be selected to represent the green perspective. I am in contact with the Green Shadow Cabinet’s T. Burmester about who might well represent the green perspective, and Hazel Henderson has expressed willingness to serve on a panel, at a considerable cost, by telecast/ remotely via internet video connection. Other suggestions are welcome.
commented 2014-09-25 22:01:06 -0400 · Flag
I agree; at a minimum the tax needs to be gradually increasing to drive our society off fossil fuels over time. I also like the idea of a “dividend” akin to what CCL has proposed, although I could support a well-structured plan that guaranteed the money went into infrastructure and/or public services for our communities.
Those are crumbling from years of severe under-funding despite the fact state tax collections keep growing. For ex, the state allots about $200M a year to Chapter 90 (local road aid), but knows there are $300-$350M above that in unfunded repair needs EVERY YEAR. In other words, it’s impossible for towns to catch up.
I wasn’t advocating H. 2532, just posting it so people knew what it said.
commented 2014-09-25 21:31:03 -0400 · Flag
Support for a carbon tax is already in the Green Party platform. But a tax of only $5 per ton is not going to be effective in shifting energy use. Also, it is important to note that shifting to natural gas, which is often cited proudly as reducing carbon emissions, is in reality achieving nothing for the climate since methane releases before combustion negate any benefit. I’d like to see the GRP have a forum that is completely honest and in which a true Green position can be advanced.
commented 2014-09-12 21:18:55 -0400 · Flag
GRP should definitely be involved in this.
FYI, here’s the text of a carbon tax (a bit long) aimed largely at funding infrastructure needs that was sent to “study” (i.e killed) during the current Legislative session. It was sponsored by, among others, Tom Conroy & Jamie Eldridge:

H. 2532

The General Laws are hereby amended by inserting after chapter 64M the following chapter:

CHAPTER 64N: TAXATION ON CARBON EMISSION

SECTION 1: DEFINITIONS

As used in this chapter, the following words shall, have the following meaning:

“Carbon-based fuel”, coal, natural gas, petroleum products and any other product used for fuel that contains carbon and emits carbon dioxide when combusted; provided, however, that carbon-based fuel shall not include any product used for fuel that is derived from a resource that is less than 1,000 years old in its natural state.

“Commissioner”, the commissioner of revenue.

“Fuel”, shall have the same meaning as in section one of chapter sixty-four A, except shall also include diesel motor fuel.

“Non-carbon tax”, a tax imposed pursuant to any chapter in the general laws other than this chapter.

“Person”, shall have the same meaning as defined in section seven of chapter four.

“Petroleum products”, propane, gasoline, unleaded gasoline, kerosene, number 2 heating oil, diesel fuel, kerosene base jet fuel, and number 4, number 5 and number 6 residual oil for utility and non-utility uses, and all petroleum derivatives, whether in bond or not, which are commonly burned to produce heat, power, electricity or motion or which are commonly processed to produce synthetic gas for burning.

“Renewable Biomass”, shall have the same meaning as defined in section one of chapter sixty-four A.

“Retail Customer”, a person who purchases carbon-based fuel for his or her own consumption.

“Retail Purchase”, a purchase of carbon-based fuel made by a person for his or her own consumption.

“Secretary”, the secretary of administration and finance.

“Tax”, the tax imposed pursuant to this chapter.

SECTION 2: SUBJECT TO TAXATION

Any person who is licensed to sell fuel in the commonwealth pursuant to section two of chapter sixty-four A; or distributes any type of carbon-based fuel or renewable biomass for the retail purchase of residential or commercial building heat, is subject to the tax of this chapter.

SECTION 3: DETERMINATION OF TAX

a) The tax shall be imposed at a rate of $5 per ton of carbon in any carbon-based fuel that is sold to retail customers in the commonwealth as follows:

(1) The department of revenue shall calculate the tax liability associated with any retail purchase by multiplying the rate designated in this section by the total amount of carbon in each carbon-based fuel sold to retail consumers in the commonwealth.

(2) The department of energy resources shall assist the department of revenue in calculating the tax liability associated with any retail purchase by determining the average amount of carbon used in the usage of carbon-based fuel and renewable biomass as taxed in this chapter. For the purpose of calculating the tax, the department of energy resources shall determine the percentage of carbon in each carbon-based fuel and report those percentages to the department of revenue.

(3) The department of revenue and the department of energy resources shall inform the secretary of their findings, and provide any information or data that the secretary requests to carry out of his responsibilities pursuant to section six of this chapter, by January 1 of each year.

(4) The legislature may vote to increase the tax at any time after the secretary’s presentation to the legislature pursuant to section six of this chapter; provided, however, that the legislature may not vote to decrease the tax; provided further that the tax shall increase by at least the rate of annual inflation plus 1 percent for the first ten years that this chapter is in effect, and by at least the rate of annual inflation thereafter.

(5) The legislature may vote to increase the revenue cap described in subsection 6(a)(3) by more than the rate of annual inflation at any time after the secretary’s presentation to the legislature pursuant to section six; provided, however, that the vote to increase the revenue cap must also increase the tax by more than the rate of annual inflation.

(6) The department of revenue and the department of energy resources may adopt any rules necessary for the calculation and collection of the tax imposed under this section.

SECTION 4: MONTHLY RETURNS AND PAYMENT OF EXCISE

a) Any person licensed to sell fuel in the commonwealth pursuant to section two of chapter sixty-four A, who is required to file a return pursuant to subsection (a) of section 16 of chapter sixty-two C, shall pay to the commissioner an excise at the tax per gallon determined by the department of revenue pursuant to section 3 of this chapter, upon each gallon of fuel sold by such person in the commonwealth during the calendar month covered by the return.

b) Any person who distributes any type of carbon-based fuel or renewable biomass for the retail purchase of residential or commercial building heat shall pay to the commissioner an excise at the tax per gallon determined by the department of revenue pursuant to section 3 of this chapter, upon each gallon of carbon-based fuel sold by such person in the commonwealth during the calendar month covered by the return, in the same manner and at the same time as those returns and excises described in chapter sixty-two C.

c) Notwithstanding the revenue disbursement requirement pursuant to subsection 8(b) of this chapter, the commissioner shall deposit the revenue from the tax into the Carbon Tax Revenue Fund, as established in section 7 of this chapter.

SECTION 5: PURCHASER TO BEAR TAX

The tax in every instance shall be borne by the retail customer, and no person offering carbon-based fuel or renewable biomass for sale shall sell, advertise or offer for sale said carbon-based fuel or renewable biomass separately from the tax imposed by this chapter.

SECTION 6: PLANS AND REPORTS RESPECTING THE CARBON TAX

The secretary must annually prepare and present a carbon tax plan and report to the legislature in the following manner:

a) The carbon tax plan must cover a 3-year period beginning with the start of the fiscal year following the fiscal year in which the plan is presented to the legislature, and must include the following information for each fiscal year covered by the plan:

(1) a forecast for the carbon tax revenues to be collected;

(2) a forecast of the reduction in the non-carbon tax revenues as a result of the carbon tax revenues; and

(3) a forecast that specifies a manner by which the carbon tax will be revenue-neutral for the first fiscal year of the plan, and revenue-positive by no more than $100 million dollars for each subsequent fiscal year of the plan. The revenue cap of $100 million shall increase each year at the rate of annual inflation plus 1 percent for the first ten years that this chapter is in effect, and by at least the rate of annual inflation thereafter.

b) The carbon tax report must cover a 2-year period that ends at the end of the the fiscal year before the fiscal year in which the report is presented to the legislature and must include the following information for each fiscal year covered by the report:

(1) the actual carbon tax revenue collected;

(2) the reduction in non-carbon tax revenues as a result of the carbon tax revenues; and

(3) any difference between the actual carbon tax revenue collected and the reduction in non-carbon tax revenues; provided that any such difference shall be included in the carbon tax plan.

c) The secretary must present the carbon tax plan and report to the House and Senate Ways and Means Committees and to the Joint Revenue Committee before March 1 of the fiscal year in which this chapter takes effect.

SECTION 7: ESTABLISHMENT OF A CARBON TAX REVENUE FUND

a) There shall be established and set up on the books of the commonwealth a separate fund to be known as the Carbon Tax Revenue Fund, consisting of amounts transferred to the fund in accordance with the provisions of section 4© and section 8 of this chapter, and income derived from the investment of amounts so transferred. The purpose of the fund shall be to maintain a reserve which shall be used only in the manner as provided herein:

(1) A decrease in the rate of tax for general corporate income, pursuant to subsection 39(a)(2) of chapter sixty-three, shall be provided, subject to appropriation, for the taxable year ending on the succeeding December thirty-first to the extent that 80 percent of the amount in the Carbon Tax Revenue Fund generated by commercial and industrial emitters plus 50 percent of the amount in the Carbon Tax Revenue Fund generated by retail customers of fuel equals an integer multiple of one-tenth of one percent of the rate of general corporate income taxes which will not be collected for said taxable year on account of said rate reductions.

(2) An increase in the amounts of the personal exemption allowable on the income tax, pursuant to subsections 3(B)(b)(1)(A), 3(B)(b)(1A)(A), and 3(B)(b)(2)(A) of chapter sixty-two, shall be provided, subject to appropriation, for the taxable year ending on the succeeding December thirty-first to the extent that 20 percent of the amount in the Carbon Tax Revenue Fund generated by commercial and industrial emitters plus 40 percent of the amount in the Carbon Tax Revenue Fund generated by individual emitters plus 30 percent of the amount in the Carbon Tax Revenue Fund generated by retail customers of fuel equals an integer multiple of five percent of each respective exemption, the result of which is the amount of the personal income taxes which will not be collected for said taxable year on account of said increased personal exemptions.

(3) An increase in the amount of exempt income of individuals of the income tax, pursuant to section 5(a) of chapter sixty-two, shall be provided, subject to appropriation, for the taxable year ending on the succeeding December thirty-first to the extent that 60 percent of the amount in the Carbon Tax Revenue Fund generated by individual emitters equals an integer multiple of five percent of the exemption, the result of which is the amount of the personal income taxes which will not be collected for said taxable year on account of said increased exempt amount.

(4) An increase in the amount of the potential tax credit (the so-called “senior circuit breaker”), pursuant to subsection 6(k)(2) of chapter sixty-two, shall be provided, subject to appropriation, for the taxable year ending on the succeeding December thirty-first to the extent that 10 percent of the amount in the Carbon Tax Revenue Fund generated by retail consumers of fuel equals an integer multiple of five percent of the total credit, the result of which is the amount of the personal income taxes which will not be collected for said taxable year on account of said personal credits.

(5) An increase in the rate of the earned income tax credit (the so-called “Massachusetts Match”), pursuant to section 6(h) of chapter sixty-two, shall be provided, subject to appropriation, for the taxable year ending on the succeeding December thirty-first to the extent that 30 percent of the amount in the Carbon Tax Revenue Fund generated by retail consumers of fuel equals an integer multiple of one percent of the rate of the state credit, the result of which is the amount of personal income taxes which will not be collected for said taxable year on account of said personal credits.

SECTION 8: CARBON TAX REVENUE REQUIREMENTS

a) In the first year of the tax, the treasurer shall disburse the full balance of the revenue from the tax into the Carbon Tax Revenue Fund.

b) In each subsequent year in which the tax is imposed, excluding the first year, the net annual commonwealth revenue from the tax shall be $100 million, and shall increase by the amount of inflation plus 1 percent each year for ten years, and the rate of inflation for each year thereafter. The treasurer shall disburse the commonwealth revenue from this subsection, to the schedule of disbursements described in section 9, and shall deposit the remaining balance of the revenue from the carbon tax into the Carbon Tax Revenue Fund.

SECTION 9: COMMONWEALTH DISBURSEMENTS

a) The treasurer shall disburse the commonwealth revenue pursuant to subsection 8(b) of this chapter according to the following schedule:

(1) 90% towards one or more of the following needs and measures:

i. eliminating the Central Artery/Tunnel debt that resides on the balance sheets of the Massachusetts Department of Transportation and Massachusetts Bay Transit Authority; or

ii. Preventing an increase in tolls on the Massachusetts Turnpike; or

iii. Massachusetts Bay Transit Authority operating and capital needs to limit fare and parking increases to no more than 3 percent per year; or

iv. Massachusetts Department of Transportation for road and bridge repair and maintenance; or

v. Massachusetts association of regional transit authorities

(2) Ten percent towards the Renewable Energy Trust Fund, administered by the Massachusetts Clean Energy Center, as described in section nine of chapter twenty-three J.

b) The treasurer shall make such disbursements under this section after the secretary’s presentation pursuant to section six of this chapter.
commented 2014-09-09 18:04:33 -0400 · Flag
I will co-sponsor this proposal.
commented 2014-09-08 11:17:06 -0400 · Flag
It is essential that a GRP speaker be on the panel. I.e.someone who views Carbon Tax as one element in a program to cope with the consequences of catastrophic climate change, who can provide the ecological context and thus make it work. Otherwise the GRP runs the risk of appearing as one more me-tooer on the electoral scene. This does not build the alternative.
tagged this with Good 2014-09-08 11:03:11 -0400
posted about this on Facebook 2014-09-08 02:18:33 -0400
Fall 2014 proposals: Mass. Carbon Tax and Policy Forum, January 2015
published this page in Fall 2014 proposals 2014-09-08 02:17:04 -0400