Nate NelsonResearch PaperC. Ross Environmental Service PracticumProfessor Ginger5/13/16

Mitigating Carbon Emissions In North America

Introduction

One of the largest issues that Vermont faces today is the amount of carbon dioxide

emissions released into the atmosphere. The four sectors of energy consumption that

contribute to these emissions are commercial, residential, industry, and transportation.

Transportation is the biggest source of emissions in the state. As much as we need to focus

our time and efforts on reducing emissions from transportation, I believe we need to start

by structuring a carbon fee program that appeals to the public interest. We need to show

that a carbon fee will benefit the general public while holding companies that import fossil

fuels accountable for their actions. In brief, we need to recapture the externalized public

cost of private benefits. The basis of a carbon fee is the “polluter pays principle,” which was

incorporated into international law at the 1992 Rio Summit Principle Sixteen of the

Declaration on Environment and Development (UN, 1992). It is a basic economic idea that

oil companies pay the social and environmental costs of polluting.

Multiple places within North America have successfully implemented a version of a

carbon pricing. These include British Columbia, California and Quebec, Boulder, Colorado,

and the Regional Greenhouse Gas Initiative (RGGI) states in the northeast region of

America. In this paper, I summarize key aspects of these carbon-pricing programs. I also

describe Vermont’s energy plans and goals that have been implemented, in order to gain a

broader perspective for what can be amended to the proposed carbon fee bill, H.412. I also

consider proposals from the Vermont Climate Change Economy Council’s “Platform of

Action” report. Given the two carbon pricing, and three energy efficiency programs

available through home utility products, along with the established energy plans within

Vermont, I believe a carbon fee bill has a future in Vermont legislation.

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British Columbia’s Revenue Neutral Carbon Program

As of 2008, British Columbia was the first territory in North America to successfully

implement a revenue-neutral carbon tax as part of their Climate Action Plan (CAP). It is

mandatory by law that all the money collected from the tax is to be recycled back into the

province’s economy in the forms of tax rebates. To ensure this, the Ministry of Finance is

required by law to annually prepare for the Legislative Assembly a three-year plan for the

recycled revenue, and how it will be balanced with the other tax reductions (British

Columbia CAP, p.12). How this tax works is that the amount of greenhouse gases emitted

when a unit of fossil fuel is burned depends on how much carbon dioxide is actually

present in the fuel. This allows for a generally simple administrative process for regulating

the carbon fee because it is applied and collected at the wholesale price. This makes it

regulated about the same way that motor fuel taxes are applied and collected in Canada.

The only exception here is natural gas and propane, which is regulated at retail price, the

same way as their sales taxes are (British Columbia CAP, p.13). In 2008 the tax rate started

at a base level of $10 per ton of carbon dioxide equivalent emissions, and then increased by

$5 per ton each year for the next four years until it reached $30 per ton in 20121 (British

Columbia CAP, p.13). Gradually increasing the tax rate, gave people and companies time to

reduce make adjustments to their fossil fuel consumptions.

British Columbia’s commitment to a carbon-neutral public sector applies to all

government ministries and agencies, educational institutions, health authorities,

businesses, and crown operations. It requires all public establishments to report the

baseline amount of greenhouse gas emissions they produce in a “business as usual”

scenario, reduce their emissions as much as possible, and offset the remaining emissions

(British Columbia CAP, 22). This reported information is made public, as are future plans to

become one hundred percent carbon neutral. The budget allocated for this program is $100

million, with the majority of the budget appropriated to efficiency upgrades and incentives

to help make buildings more sustainable. The commitment also requires that all owned or

leased buildings be LEED certified by a gold or equivalent standard (British Columbia CAP,

22). Through these commitments British Columbia has taken over the years, it has paid off

1 Amounts are in Canadian currency

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in terms of reduced carbon emissions with a revenue-neutral policy. However, for a carbon

pricing program to be successful it does not have to be based on a revenue-neutral policy.

California and Quebec Cap and Trade Linkage System

A system that is not revenue-neutral but has the same end goal of a carbon fee

program is the California-Quebec cap and trade linkage system. The term “linkage” is

defined by the Environmental Defense Fund as the “approval of compliance instruments

from an external greenhouse gas emission trading system to meet compliance obligations…

and the reciprocal approval of compliance instruments issued by California to meet

compliance obligations in an external program” (Carbon Market California, 2014, p.26).

The linkage system was established by the California Air Resources Board and began in

2014 under the Western Climate Initiative, which is a “non-profit corporation formed to

provide administrative and technical services to support the implementation of state and

provincial greenhouse gas emissions trading programs” (Carbon Market California, 2014,

p.11, 27; WCI, INC, 2014). The board of directors for the Western Climate Initiative includes

officials from Quebec, British Columbia, and the state of California.

The purpose of the linkage system is to expand the carbon market to provide

regulated entities greater flexibility in accomplishing their compliance goals in the most

cost-efficient way. Activities of the Initiative include developing a compliance system to

track allowances and offsets certificates, administering allowances, conducting market

monitoring of allowance auctions, and allowance and offset certificate trading (WCI, INC,

2014). The linkage system can open up the market to initiate other possible linkage

systems to be implemented. This could generate greater environmental and economic

benefits all over North America (Carbon Market California, 2014, p.9).

To ensure the success of the cap and trade system California enacted the Global

Warming Solutions Act (AB 32). This act established the Emissions Market Assessment

Committee, and the Economic and Allocation Advisory Committee to aid in the regulation

development of the linkage system. As well as establishing these committees, California

conducted research to gather lessons from the European Union Emissions Trading System,

and the Regional Greenhouse Gas Initiative, which is currently implemented in nine of the

northeast states in America (Carbon Market California, 2014, p.11).

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California’s cap and trade program works by setting a stringent cap at the state

level. The cap tells independent company owners their carbon emission allowance for the

calendar year to be in compliance with the mandated regulation. The allowance is

distributed to the regulated companies within the state, which are either given for free or

sold through an auction (Carbon Market California, 2014, p.12). If a company does not

reach compliance then penalties can and will be awarded to the companies that release a

higher amount than their cap allows them to. Each company is allowed to purchase

additional allowances external to the ones they receive for free from another companies in

order to be in compliance. This can incentivize companies to invest in emission reduction

technology. That is because a company is allowed to sell unused emission allowances; they

can make an extra profit from other companies while saving money through energy

efficient technology. One of the reasons companies may be motivated to do this is because

at the end of the calendar year, they have give back any leftover allowances; they are not

allowed to have allowances carry over to the next year (Carbon Market California, 2014,

p.12).

The amount of allowance in California’s cap and trade program is designed to

decline every year. From the first to the second year the program was implemented the cap

tightened by about 3 Million metric tons of emission, or 1.9% (Carbon Market California,

2014, p.12). In 2015, when suppliers of transportation fuels, natural gas, and various other

fuels were brought into the regulation, it regulated up to 1.5 times more of carbon

pollution. After these new fuel sources got mandated into the statute, the cap began

tightening by approximately 12 million metric tons of emissions each year, which is an

average annual decrease of 3.3% (Carbon Market California, 2014, p.12). The cap will

continue to decrease as the years go by, making it harder for companies to be in

compliance with the regulation. This will push the larger companies to make changes with

their infrastructure and transition to “best available practices” in order to reach the state

carbon levels.

Regional Greenhouse Gas Initiative

A regional program that multiple states within the Northeast region of America have

implemented is called the Regional Greenhouse Gas Initiative (RGGI). It is the first market-

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based regulatory program in the United States that aims to reduce greenhouse gas

emissions from the electricity power sector. The nine states that are apart of this program

are Connecticut, Delaware, Maine, Maryland, New Hampshire, Massachusetts, New York,

Rhode Island, and Vermont (rggi.org/Design). RGGI is a cap and trade model that works by

states selling the majority of their emission allowances through auctions; this is done very

similarly to the cap and trade program between California and Quebec. If you recall some of

the roots in which the linkage system is built upon, you will recognize that it comes from

the RGGI model. The proceeds from the cap go towards investments in energy efficiency,

renewable energy, and various consumer benefit programs aimed to spark innovation in

the clean energy economy, while producing employment opportunities in the RGGI states

(rggi.org/Benefits).

How the RGGI program works is each individual state is composed of Carbon

Dioxide Budget Trading Programs that set emission limits for electric power plants, issues

the carbon allowance, and establishes participation in the regional allowance auctions. This

is policed through independent regulations that are based on the RGGI Model Rule of 2013

and the changes that have occurred within the rule over the years (rggi.org/Design). For

Vermont specifically, the Vermont Public Service Board and the Vermont Agency of Natural

resources are responsible for participating and regulating the RGGI program under statute

30 V.S.A section 255. This title mandates how to implement the allowance auction

provisions and regulations under RGGI. More specifically, under 30 V.S.A section 255, states

that the Board must “establish a process to allocate the carbon credits that Vermont

receives as part of its participation in RGGI” as well as “authorize to appoint a Trustee or

Trustees to receive, hold, bank, and sell tradable carbon credits under this program”

(Vermont Public Service Board, 2016). Pursuant to 30 V.S.A section 225, under statute 30

V.S.A section 209(d)(3) an electric energy fund was created to deposit all of Vermont’s

auction revenue, in order to provide funding for a variety of services and incentives that go

towards improved building infrastructure and efficient heating systems. The purpose of

this is to create jobs while saving Vermonter’s money on home heating costs, with the end

goal of reducing greenhouse gas emissions (Vermont Public Service Board, 2016).

The benefits of a RGGI model is more than clear on the amount of carbon dioxide it

has helped mitigate over the years. RGGI as a whole has mitigated over 40% of the carbon

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dioxide pollution since 2005, while at the same time the northeast regional economy as

grown by a total of 8% (rggi.org/Factsheet). In April 2015, RGGI released a report called

“Investment of RGGI Proceeds through 2013” that tracked the investment of the RGGI

proceeds and the benefit it gave the region over the past two-three years through the

various programs statute 30 V.S.A section 209(d)(3) has helped implement. The report

estimates that more than $395 million have been saved in terms of energy bills but lifetime

savings could be as high as $2.9 billion to the 3.7 million households and 17,800 businesses

that are currently participating in the programs. In terms of energy and emissions, to date

1.3 million short tons of carbon dioxide have been avoided which is equivalent to taking

245,000 cars off the road, 1.8 million megawatt hours have been saved, as well as 2.9

million mmBTU’s saved. In terms of creating employment, to date 3,700 workers have been

trained in the field of clean and renewable energy (rggi.org/Benefits). All in all more than

$1 billion in RGGI auction revenue was invested in programs that revolve around energy

efficiency, greenhouse gas abatement, direct bill assistance, and renewable energy. The

largest sum of money continues to be allocated towards energy efficiency because it has

proven to be the one of the most cost effective ways to reduce carbon emissions while

boosting the economy in a positive direction (rggi.org/Benefits). In addition to the energy

and emissions mitigated in terms of numbers, investment in energy efficient systems can

provide benefits to people who do not participate in the programs. As the overall energy

demand decreases it will lower the wholesale price of electricity saving people money on

their energy bills overtime. This can provide additional economic benefits in local regions

because instead of sending those dollars out of state or to a large corporation, they can be

spent within the local economy (rggi.org/Factsheet).

Boulder, Colorado’s Climate Action Plan

After looking at carbon reduction programs on a regional level, it is time to see what

independent states are doing in terms of mitigating pollution. An example of this through

Boulder Colorado’s Climate Action Plan with their strong carbon fee they implemented in

2007. The revenue from the fee Boulder generates is allocated towards city funded

programs and services that are designed to reduce local greenhouse gas emissions by

encouraging people to reduce energy waste, save money on costs of appliances and utilities

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overtime, and to minimize reliance on external energy companies (Climate Action Tax,

2016). The fee levied is based on the amount of electricity city residents, commercial and

industrial businesses consume. This has approximately generated just under $2 million and

has lead to avoid 50,000 tons of emissions between 2007 and 2015. Boulders overall goal

through their fee is to reduce emissions by 80% before 2050 (Climate Action Tax, 2016).

This goal has kept their level of pollution generally consistent despite a growth in

population, jobs, and economic activity.

The city allocates the revenue in four different sections being residential programs,

market innovations, climate commitment, and commercial programs. Within these sections

a variety of effective efforts have been made to meet their goal. Currently, a portion of the

2015 revenue is being allocated to a program called EnergySmart, which is an energy

advising services and rebates for residents. In this program over 7,500 housing units have

been involved since 2010, with about $1.5 million in rebates paid back to the people, as

well as almost $11 million in private investments have been made (Climate Action Tax,

2016). To put it in terms of electricity savings, it is like taking 1,325 cars off the road since

the start of the program through September 2015 (EnergySmart Progress Report, 2015).

Another program that has been successful is SmartRegs, which states energy efficiency

requirements for rental properties that residents and landlords have to be in compliance

with by December 2018. SmartRegs passed their initial “Stretch goal” by reaching 3,000

compliant rental units between 2014 and 2015, and currently 74% of all units evaluated

are in compliance with efficiency requirements (Climate Action Tax, 2016; SmartRegs

Progress Report, 2015). The electricity savings from this program is equivalent to taking

647 cars off the road each year (SmartRegs Progress Report, 2015).

Green Leasing

A part of EnergySmart and SmartRegs is this component called “green leasing,”

which is the process of “integrating green elements into lease agreements between the

landlord and tenants” (Energysmartyes.com). Parts of the negotiations that are

incorporated into the lease are resource and energy efficient building designs, equipment,

and operations. The main purpose of the “green lease” is to be in an agreement that, “it is in

their [landlord and tenant] mutual best interest that the buildings and premises be

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operated and maintained in a manner that is environmentally responsible, fiscally prudent,

and provides a safe and productive work environment” (Energysmartyes.com/greenlease).

In the “terms and conditions” section of the lease it lists multiple aspects both

parties agree upon to reduce their environmental impact. For instance, the section

“Environmental Performance Objective” states that both parties are to give reasonable

efforts to minimize direct and indirect energy consumption and greenhouse gas emissions,

water consumption, the amount of waste they produce, and negative impacts regarding

indoor air quality and around the premises of the property. Another section called “Energy

Saving Improvements” states that the cost of any capital investments made by the landlord,

such as improvements with utilities, can be included in the “operation costs” of the housing

lease agreement. The costs of the improvements will be paid off over the minimum period

acceptable for federal income tax purposes at the current market rate, which is determined

by the Landlord’s accountants. The next aspect of the lease called “Utility Providers” says

that if the building requires more than one service provider than the landlord as the right

to make a judgment call on whom to hire. To make this decision they take account for the

environmental impacts of each alternative provider as well as the cost of service. By letting

the landlord make the decisions of who to hire, it keeps it consistent and forms exclusive

arrangements for long-term partnerships. The next section called “Environmental

Performance Regulations” states that the landlord has the right to adjust or fully change the

service provider in order to be in compliance with the mandated laws, rules, or regulations

they are facing. This covers the landlords liability of maintaining the compliance level if the

current tenant does not agree with the new decision the landlord has to make

(Energysmartyes.com/greenlease). It is generally the whole point of the lease to have the

landlord and tenants on the same page because they both want to cut down on energy

costs, while cutting down on carbon emissions at the same time. There are other terms and

conditions listed in the “green lease” but these are generally the important ones in relation

to utilities and cutting down on energy consumption. An implication to the “green lease” is

the potential for rent prices to increase. This will make it harder for low-income families to

be able to afford living in these rental units that are compliance under SmartRegs and

EnergySmart.

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Pilot Programs

In addition to the previous programs, Boulder has created pilot projects aimed at

sparking market innovations and local renewable energy generation. For instance one of

the projects is the “Boulder Energy Challenge” which is a grant program that provides

$300,000 to fund innovative solutions to cut emissions (Climate Action Tax, 2016). The

Climate Action Tax revenue funds five to ten projects, and will range from $10,000 to

$100,000 per project depending on the application proposal you submit. Some of the past

projects the grants have been awarded to are the Boulder Housing Partners: Affordable

Housing Energy Empowerment and Evolution7 Labs: Solar-Plus-Storage Demonstration

Project (Boulder Energy Challenge, 2016). The success of the Climate Action Tax in

generating approximately $1.8 million each year is the reason why Boulder, Colorado has

been able to cut down on level of emissions released since the start of the program

(Boulder Energy Challenge, 2016).

Vermont Energy Plans and Goals

After looking at what other states and regions in North America have implemented

in terms of reducing carbon emissions and mitigating energy costs, it is time to narrow in

on what Vermont is doing as a state to reduce energy consumption. Luckily for Vermonters,

we have energy plans and goals we are trying to accomplish to reduce our carbon footprint

in all of the four energy sectors noted earlier in the paper. For instance, the 2016 Vermont

Comprehensive Energy Plan, developed by the Vermont Department of Public Service in

collaboration with other agencies, provides a guideline-template of solutions to achieve

Vermont’s goal of using 90% renewable energy by 2050. The main focus of the 2016

energy plan is to “provide a framework to advance our goals, along with specific plans and

recommendations for action by the public and private sectors” (Vermont Comprehensive

Energy Plan, 2016, p.2). The goals to which this statement refers are: to reduce total energy

consumption per capita by 15% by 2025, and by more than one third by 2050; to meet

25% of the remaining energy need from renewable sources by 2025, 40% by 2035 and

90% by 2050; as well as the end-use sector goals by 2025, which is 10% renewable

transportation, 30% renewable buildings, and 67% renewable electric power (Vermont

Comprehensive Energy Plan, 2016, p.2). Solutions that this report proposes to meet these

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goals include energy efficiency with home utility products through education, regulation,

and incentives.

Strategies for Implementation

The comprehensive energy plan describes four types of strategies in order to

promote change to help reach the energy goals noted above, these being market-based

policies, information and access, strategic investment, and code and standards (Vermont

Comprehensive Energy Plan, 2016, p.7). The market-based policies take an incentive

approach to establish a new market, or reconfigure the pricing in an existing market to

promote change. Some examples of these policies are cap-and –trade programs, renewable

portfolio standards, and carbon fees, which is discussed earlier in the paper. The

information and access policies serve to educate consumers about efficient markets and

products so they can create their own incentives by having information provided to them,

technical assistances, or access to capital, in order for them to make effective decisions on

the lowest lifecycle costs. This approach gives the consumers the knowledge they need to

make the best cost-efficient purchases with utilities and other household products in order

to save money on electricity. Strategic investment is a long-term goal approach that aims at

changing early adopted programs and technology, through research and development, to

build upon markets aimed to achieving Vermont’s energy goal by reducing the prior costs.

The codes and standards strategy is a regulatory-based approach that aims to decrease the

loss of efficiency within buildings, such as companies and households, in order to reduce

the amount of energy that is consumed per capita. This approach is more applicable to

long-lived products such as toilets and refrigerators, and other infrastructure like heating

units that with the right technology can save a consumer a lot of money over the years.

Great examples of this strategy are the SmartRegs and EnergySmart programs that have

been implemented in Boulder, Colorado. If we incorporate these four strategies into

programs such as a carbon fee, then I believe it can reduce the amount dirty energy we use

on a large scale, while putting money back in the hands of the consumers.

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Platform of Action

The Vermont Climate Change Economy Council developed a report and action plan

for a more sustainable energy economy. In this report they established a “platform of

action” which lists seven steps to advance economic activity. In step number five titled

“Carbon Pricing,” the report addresses various provisions and considerations that the

council encourages the Vermont legislature to investigate. The first aspect is to ensure

equity throughout Vermont. The report identifies the concern that putting a price on

carbon could negatively affect low-income people. A provision to address this is to provide

an offset for any regressive burden that may affect low-income families and those

vulnerable to the low-income tax rebates, and to ensure a smooth transition for these

people (VCCEC Report, 2016, p.30). Providing an offset could balance the negative effects

that carbon fees will have on Vermonters, farms, manufacturers, and regional commerce

around the border areas of Vermont. For example, this would help support local

businesses while providing benefits to the local people through investments with energy

efficient products.

Another consideration the Council proposes is to leverage capital through a revenue

bond against the projected carbon pollution fee in order to gain immediate economic

benefits within the first year of the implemented program by expanding opportunities with

job creation and efficiency programs (VCCEC Report, 2016, p.30). There is five proposed

ways in which a carbon fee could create job and economic opportunities. These being

residential and business rebates, transportation shifts, expand small business

development, and farm and forest enterprise support. The residential rebate is a tax rebate

that gives incentives for clean energy development for single and multi-family homes,

which could be coordinated by the Vermont Comprehensive Energy Efficiency Partnership

and/or the Climate Economy Finance Collaborative (VCCEC Report, 2016, p.31).

The Vermont Comprehensive Energy Efficiency is a proposed partnership between

Efficiency Vermont, Burlington Electric, and Green Mountain Power, which focuses at

advancing innovative new efficiency services and initiatives with both public and private

companies. The goal is to advance research and development to identify and implement

new key ideas that go from “innovation to market transformation” while providing a stress-

free and consistent change for their customers (VCCEC Report, 2016, p.22).

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The proposed Clean Energy Finance Collaborative would be led by Efficiency

Vermont through the Vermont Energy Investment Corporation, in collaboration with

various utility companies, banks, and the Vermont Economic Development Authority. This

collaboration aims to simplify making rational decisions regarding cost-effective

investments for home and business weatherization and energy projects. The Governor and

the Vermont state legislator would appoint the collaborative with an executive leader, a

board, and funding by the state (VCCEC Report, 2016, p.28). The business rebates would

give incentives for them to make the changes they need to invest in efficiency

improvements and to help develop new energy sources to be more sustainable by

supporting them financially. For the business development, the revenue generated by the

carbon fee could be invested into small business opportunities within the climate economy

sectors, which are led by the Climate Economy Network Development Initiative (VCCEC

Report, 2016, p.31). The purpose of the proposed developmental initiative is to “invest in

the economic future by strengthening the network of businesses that reduce our need for

carbon-based energy sources and the enterprises that support those businesses” (VCCEC

Report, 2016, p.24). This initiative will be an expansion of the Clean Energy Development

Fund and will driven through statutory authority and investment capacity (VCCEC Report,

2016, p.24). The transformation shifts would be in the forms of tax credits or incentives

that support the change to electric vehicles, advancement with public transportation, and

encourage shared mobility. The farm and forest enterprise support encourages a transition

to sustainable management on farms through smart tillage practices, manure digestion and

energy development, composting, as well as other natural resource practices that prevent

the use of fossil fuel price increases that may potentially effect their economic viability

(VCCEC Report, 2016, p.31). Through the proposed provisions and considerations the

Council has suggested through offsets and rebates, along with the various agencies it has

proposed to create, the carbon pricing “Platform of Action” has provided significant

potential for the state of Vermont to implement a carbon fee, while making job creation and

economic opportunities a priority.

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Implications for the Next Steps in Vermont

After looking at the success that British Columbia, California, Quebec, and Colorado

had over the past decade, along side Vermont’s ambitious energy and economy goals they

have set, I believe there is a bright future for a carbon pollution fee program. The resources

are generally there for Vermont to implement or join forces with an already existing carbon

fee model. One way could be joining the cap and trade linkage system with California and

Quebec, and/or amending the RGGI program to take on other sectors of the energy

industry such as transportation and heating because of how similar the models are to each

other. A second way could be to create their own “Climate Action Plan” at the state level

that is similar to Boulder, Colorado’s while implementing programs similar to SmartRegs

and EnergySmart, and/or by forming new agencies such as the Vermont Climate Change

Economy Council has proposed in their “Progress for Vermont” report. In addition Vermont

could combine their Weatherization Assistance Program (WAP) with SmartRegs and

EnergySmart because they all serve to accomplish the same goal. This could enforce the

strength of the WAPs by expanding the role it plays. Either one of these options included

aspects from the Vermont Comprehensive Energy Plan in terms of how to accomplish the

states energy goals through market-based policies, information and access, strategic

investment, and codes and standards. Same with the Vermont Climate Change Economy

Council in terms of it’s considerations and provisions with rebates, offsets, transportation

shifts, and by expanding small and local businesses. Either option you look at is aimed at

creating employment opportunities, boosting the economy, and reducing the amount of

carbon emissions that is being released.

Policy Prospectus

In relation to the current H.412 bill that was introduced and then not passed, I

propose to change a specific aspect to the bill as introduced. What I am proposing to change

is the offset revenue percent from a 90-10% split to a 70-30% split that transitions over

time. Originally the 90% was going to be given back to Vermonter’s in the form of tax

rebates and the other 10% was going to be allocated to the Vermont Energy Independence

Fund (H.412 As Introduced, 2015). The reason I propose the shift is to allocate more money

for the home weatherization fund, as well as other programs that incentivize a transition to

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more energy efficient products and utilities. The revenue split will start at 90-10% the first

year but then the split will transition incrementally and gradually over the next 10 years,

along side the proposed tax increase. By starting with this percent split it will prove to the

people that they will actually get their money back by refunding the dividend through an

in-hand check delivery system. Then on the 3rd year move to an 85-15% split and transition

to a tax filing process. This would only be leveraging existing bureaucracy because

collecting and returning the money will still be done through the already implemented tax

department; it just may require for a few more personnel to be added to the pay roll, which

is not a negative aspect because it just calls to hire more people within the agency. In the 5th

year, the rate will move to a 80-20% split, then a 75-25% split on year 8, and finally end at

a 70-30% split on year 10, the same time when the tax rate will be $100/ton of carbon

dioxide. The issue with this percent change is that it will decrease the amount of tax

revenue people will be receiving directly back through the in-hand delivery system and

then the tax filing process. While a lot of policy is about persuading public opinion to

enhance change, the split I proposed may be less attractive to the general public because it

is aimed to benefit low-income households.

In H.412, the original amount of money allocated for weatherization programs is $8

million but with this new revenue split I propose to increase the fund by a total of

approximately $1.7 million at a flat rate each year. The reason for choosing the increase of

$1.7 million is because at a compounded rate with the increase from 10-30% over 10 years

that $8 million would switch to $9.7 million. At the end of the ten-year period, a grand total

of $87,412,550 will be allocated to the home weatherization fund, but like I said before, it

will level off at that ten-year period a constant amount of $9.7 million. The purpose of this

is to jump-start the home weatherization programs. Currently 20% of energy that heats

Vermont homes is renewables but the state is trying to increase that number to 30% by

2025. To help reach this goal Vermont wants to weatherize 80,000 homes by 2020, while

installing 35,000 cold-climate heat pumps by 2025 (Vermont Comprehensive Energy Plan,

2016, p.8). This will significantly help the transformation from building heat to renewable

energy within households and industries.

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Conclusion

If a carbon fee program were to be implemented in Vermont, it would open the

doors for a clean and bright future. The numbers listed above go to show just how much we

could improve our low-income infrastructure, while transitioning the state of Vermont to

an all around higher quality of life. Granted there is a lot of work that needs to be done with

our energy industry, but if we could adopt a similar carbon fee model as California, Quebec,

or British Columbia it would be a huge step forward. This is a step that Vermont needs to

take, and we need to take it now. In the words of the current Speaker of the Vermont House

of Representatives, Shap Smith, “We [Vermont] need to have carbon pricing, no two ways

about it but is a regional approach better than Vermont doing it alone?” Speaker Smith

went on to say that he thinks Vermont trying to implement it alone is not the best option.

Senator Virginia “Ginny” Lyons also had a similar perspective on this topic as well. She said

that a regional approach for a carbon fee could be a better option than Vermont trying to

implement a program alone. Senator Lyons said you could write a bill for all of the RGGI

states and see if it passes through any of the committees. Whichever ones it does pass

through, then you could implement it those states. Although these perspectives come from

creditably people within the Vermont Statehouse, it is just two perspectives out of a whole

municipality. Either way, through the examples that I have provided about various

programs in North America, it is proven a carbon fee can be done either on an individual

level or as a combined effort.

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References

British Columbian Government. 2008. “Climate Action Plan (CAP)- Province of British Columbia.” http://www.gov.bc.ca/premier/attachments/climate_action_plan.pdf Pages 12-13, 22. Accessed April 18th, 2016.

City of Boulder Colorado, 2016. “Boulder Energy Challenge.” https://bouldercolorado.gov/lead/boulder-energy-challenge. Accessed March 27th, 2016.

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