A time-traveler speculates on how Vermont might have successfully implemented a tax on fossil fuels, back in 2016
This commentary is by Rick Wackernagel. Rick is a member and facilitator of the Carbon-tax Working Group at the Burlington Node of 350 Vermont.
It’s December 2026; snow now covers the ground. That’s right: 2026.
I’m filling the tank of my plug-in hybrid for the fourth time this year and reflecting on what we’ve accomplished with the carbon-pollution tax I’m about to pay.
First of all, it wasn’t an easy tax to pass.
More than a decade earlier, the state had set goals for reducing greenhouse gas emissions.
The intermediate goal for 2012 was to reduce emissions to 25 percent below 1990 levels. In 2012, although our emissions had mostly declined for eight years, they were still two-percent higher than in 1990.
Existing programs and prices weren’t accelerating adoption of low-carbon practices and technologies. Fossil fuels were still the short-run cheaper alternative.
Vermonters finally decided that taxing carbon pollution would make fossil fuels more expensive and low-carbon alternatives more attractive.
However, establishing a carbon tax, by itself, wasn’t enough. We had wrinkles to smooth out. Among them: finding public support for the tax, determining the costs to Vermonters — especially impacts on low-income and rural households.
In November 2014, I surveyed about 100 of my neighbors in Burlington’s Ward 6 to find out if they would support a carbon tax. A large majority did.
I also asked how they would like the revenues to be used.
The respondents’ preferences were, in order of support:
- Energy-efficiency programs
- Public transportation and other low-carbon infrastructure
- Developing and disseminating new low-carbon technologies
- Returning money to Vermonters through tax reductions and rebates
- Establishing those priorities helped persuade the Legislature in 2016.
Adding an educational campaign on low-carbon living, launched the year before the tax took effect, also helped. That program promoted no- and low-cost practices and technologies designed to reduce our carbon footprint by 25 percent.
Another deal-maker: Legislators agreed to phase in the tax over 10 years, from 2016 to now — a strategy that gave people time to adjust and heavily polluting vehicles years to wear out.
Energy-efficiency programs already in place subsidized improvements to homes and businesses, such as reducing air leakage and adding insulation.
As advocated in Vermont’s 2015 Comprehensive Energy Plan, our public, private and non-profit sectors partnered in developing financing tools to overcome the upfront costs of replacing oil and gas heat with air-source heat pumps, photovoltaic power systems and other low-carbon technologies.
Refundable tax credits and rebates helped low-income and rural households make the decade-long transition. Tax credits helped businesses adjust.
Expanding the Solarize program introduced by Vital Communities, town energy committees all over the state played a vital role in educational programs, vetting vendors, and arranging bulk-purchase discounts for Vermonters.
The Comprehensive Energy Retrofit Program of Building Performance Professionals Association of Vermont trained contractors, energy consultants, suppliers, and homeowners in best practices for combining energy efficiency with renewable energy.
An economic model of our post-carbon-tax economy, constructed 11 years ago for Energy Independent Vermont, showed that by using 90 percent of that tax’s revenue to reduce other taxes, economic growth and employment would increase.
It achieved that growth primarily by reducing the flow of money out of the state to pay for fossil fuels.
We looked at Vermont’s climate economy as another growth opportunity, building on private and non-profit green-tech communities; and exporting the low-carbon products and services they had developed.
By thinking through how to make it work, we’ve gotten back on track for reducing our greenhouse-gas emissions and have made it beneficial for Vermont and Vermonters, as well as the climate. Our carbon-pollution tax has played a key role — money well-spent — in preserving our grandchildren’s world. We’ve accomplished a lot.
Vermonters are doing their part to stop global warming. We’ve done it in a way that’s good for us and makes a useful model for others.
“Click!” The pump stops. My tank is already full.
This essay was first published online Sunday, Jan. 10, 2016
Download the REMI – Carbon Pollution Tax Viability Study