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Our Turn: We can’t afford a carbon tax



For the Monitor
Sunday, December 03, 2017

The authors of the op-ed headlined “It’s time to put a price on carbon” (Monitor Opinion, Nov. 13) want to put a tax on fossil fuels. They hope that making these fuels more expensive might make people buy less, which in turn might reduce carbon dioxide emissions. Fewer emissions theoretically could lessen the impact of climate change.

Most carbon tax proposals try to soften the idea of a new tax by returning the proceeds to taxpayers in the form of a cash payout or by eliminating or reducing an existing tax. These carbon tax proposals often use $40 per ton of carbon emissions as their starting point (and then go up each year). At that level, a carbon tax would directly add 16 percent to the cost of carbon-based fuels, and indirectly add as much as 20 percent to the cost of everything produced by someone who uses these fuels.

A carbon tax would start by adding 40 cents to every gallon of gasoline, heating fuel, aviation fuel, and unit of natural gas and its derivatives. If your car has a 17-gallon tank, that tax adds an extra $6.40 every time you fill up (at today’s prices). If you heat your house with oil or propane, expect to pay an extra $80-$100 per fuel delivery. These extra costs would total $500 to $600 each year.

Next, your monthly electric bill would rise sharply. The generators who make the electricity will pay the tax and pass that along in the price of wholesale power. The utilities that sell you that power will charge more to fuel their line maintenance trucks and to pay for their other operating expenses. If you pay $100 a month today, expect to pay $120 with a carbon tax. That’s another $240 per year.

The price of groceries would be an indirect cost and would go up even more. Farmers and wholesale grocers who supply individual stores would pay higher fuel costs for their tractor and truck fleets. The airlines that deliver food from coast-to-coast or from overseas would need to increase their prices, which would end up affecting each bunch of asparagus or quart of blueberries. An $800 a month bill for groceries today will be over $1,000 with a carbon tax.

By now you get the picture: Whether it’s a loaf of bread, a new pair of shoes or a trip to the movies everything you buy will cost more. Will New Hampshire families be able to cope with $1,000 to $1,500 per year in higher living costs? You could ask for a raise at work but good luck there, since your employer will be struggling to make ends meet in a world where everything costs 16 to 20 percent more, particularly if you work in an energy intensive industry like manufacturing, one of the most productive parts of our economy.

Pyramiding cost inflation would result in products too expensive for many people to buy. Businesses would have to cut back, lay off employees and scuttle plans to expand. Increased unemployment would depress wages. The Economist recently used the phrase “asphyxiate the economy” to describe such a process.

New Hampshire contributes 0.0001 percent of the world’s carbon emissions. Crippling our state’s economy with a 16 to 20 percent carbon tax will have no effect on our global climate. But it will have a major impact on every New Hampshire family’s standard of living.

(Rep. Michael Vose of Epping and Rep. Herb Vadney of Meredith serve on the House Science, Technology and Energy committee.)