The world is changing, but this isn’t anything new. Dating back to the 1950’s, citizens started raising concerns over the effects of soil destruction, deforestation, industrial waste, and emissions. This issue, which is described by some as the largest crisis humans have ever encountered, was put on the back burner during the 2008 financial crisis. Today, the issues of global warming and environmental destruction are returning to the forefront as a major topic in local, national and international politics.
Massachusetts has already established itself as a leader in the war against global warming, but a bill, “S.1747: An Act Combating Cimate Change,” put forth by State Senator Michael J. Barrett, could be the first of its kind in the USA. The bill would establish what is commonly referred to as a carbon tax, although what is truly a fee because the money does not enter the general revenue and is directly returned to taxpayers. The fee would be levied upon the wholesale price of fossil fuels, thereby increasing the price of heating and transportation for Massachusetts residents. However, residents would then receive a check from the state government from the incomes of the carbon fee. Under this plan, people who rely heavily on fossil fuels would lose money overall, and those with fewer emissions would come out ahead.
The Committee for a Green Economy, an environmentalist group, hired a bi-partisan economic consulting firm, Regional Economic Models Inc., to study the impacts of a carbon fee on the Massachusetts economy. The study concluded that a carbon fee would boost the state’s economic activity by as much as $8 billion by lowering income, sales, and corporate taxes.
While Barrett’s current plan returns revenue to citizens slightly differently, through a direct check instead of lowering taxes, the study does show strong support for a carbon fee. Another report sponsored by the Department of Energy Resources concluded that a “revenue neutral” carbon fee like Barrett’s would be an effective way of cutting carbon pollutants, lowering emissions by five to ten percent and helping Massachusetts achieve its goal of reducing emissions by 80% from 1990 levels by 2050. Barrett’s bill continues to gain support, with 40 senators or representatives, a fifth of the Legislature, co-signing the bill.
Currently, S.1747 is being debated by the Massachusetts Committee on Telecommunications, Utilities and Energy, and many locals are pushing for a favorable vote. A crowd of business and faith leaders, citizens, environmental groups, civic organizations and economists, including Tufts economist Frank Ackerman and MIT economist Chris Knittel, voiced support for Barrett’s bill on November 5.
Candidates’ support or opposition to the deal will be an important indicator for voters in 2016. The candidates are divided on this issue. Some candidates, such as Vermont Senator Bernie Sanders, have made the environment and sustainability a key issue in their platform, and others, such as former Florida Governor Jeb Bush, have a history of support for environmental policies—but there are candidates that would oppose many extreme efforts to combat climate change.
The upcoming weeks have the potential to change environmental policies locally and globally, and as these policies change, so will business. If a carbon fee is enacted in Massachusetts, consumers and businesses will change their spending habits. If a truly influential commitment is set by 190 nations around the globe, then large corporations will have to commit to reducing greenhouse gas emissions.
With Massachusetts considering the nation’s first carbon tax in the state legislature and with the Paris Environmental Summit just around the corner, the decisions made in the next few months will impact business, and the world, for decades.