John Gage of Windham is volunteer NH state coordinator for Citizens’ Climate Lobby.
Saying “No!” to a tax might seem like a no-brainer in New Hampshire, but things are not always as they seem. HR 17, a New Hampshire House resolution against carbon pricing, is fatally flawed in three ways:
The most well-supported carbon pricing bill in Congress in 15 years, the Energy Innovation and Carbon Dividend Act, gives the proceeds of a pollution fee paid by fossil fuel producers and importers to all American families equally – it’s not a tax.
By the end of this decade, the U.S. will either be pricing carbon pollution (and potentially rebating the money to families) or paying our trading partners for our free-riding (and putting U.S. manufacturers at a growing competitive disadvantage).
Failure to reduce global climate pollution by 50% this decade will impose enormous burdens on us, nature and future generations.
As a bonus, carbon pricing takes the profit out of selling fossil fuels, so it is also a powerful way to defund Russian aggression.
The state of New Hampshire is ranked 47th in carbon emissions (EIA). In the HR 17 committee hearing, a co-sponsor said our relatively small contribution means we are already doing enough. She must not realize that if Congress passes the Energy Innovation Act, residents in states with lower carbon emissions per capita will benefit the most. Citizens in our region will net an average $1,000 annual per-capita gain in after-tax income (twice the national average) by year ten (REMI Report). Couldn’t most people use some extra cash these days?
Similarly, since the U.S. produces fewer carbon emissions per unit of economic output than developing countries, a border-adjusted U.S. carbon price will make our manufacturers more competitive in trade with most other countries. For example, a price on pollution will make cleaner U.S. steel cheaper than dirty steel from China. Perhaps most importantly, border adjustments are the only way we can hold other countries accountable for their pollution, and WTO GATT trade rules say they can only be used in combination with an explicit carbon price.
Over 100 countries have committed to reducing their carbon emissions to net-zero by 2050. Nearly every economist agrees carbon pricing is the most cost-effective way to reduce that pollution, and 64 carbon pricing systems covering 21% of global emissions are active. However, the full potential of carbon pricing remains untapped because most countries’ prices are too low (World Bank). A high price can be achieved using the approach nearly every leading US economist agrees is the most equitable: cash-back carbon pricing. Watch Economics Professor Charles Wheelan of Dartmouth College explain how it works at carboncashback.org/carbon-cash-back. You can also register to see him on March 28 at newhampshirenetwork.org/events.
Some regions are on the right price path. The EU’s carbon price recently hit $110 per tonne of CO2 from fossil fuels. The EU will start using a border adjustment in 2026 to charge its price on free-riding countries’ imports. Canada is using cash-back carbon pricing to reach $135 in 2030 and is considering adding border adjustments. The UK and Japan are too.
Why should New Hampshire care? As long as the U.S. doesn’t have a price on carbon, we are free-riding. On this path, our exporters will soon be paying other countries for our free carbon pollution when we participate in their markets. This is money we could keep in our own economy by pricing carbon here. If we don’t, those countries will decarbonize faster, making our producers less competitive over time. The writing is on the wall: carbon pricing is coming soon.
How should we do it? Economists recommend putting a federal, steadily rising, border-adjusted, cash-back carbon fee on fossil fuel production and imports (Carbon Fee and Dividend), and we should start now. The IPCC’s minimum global target carbon price is $135 in 2030 for the 1.5˚C goal. We can either get there gradually like Canada (in $15 annual increments) or all at once later this decade. The all-at-once approach would shock the U.S. economy, U.S. businesses, and New Hampshire families, and a delay would make an even higher price necessary to make up for the lost time.
HR 17 attempts to take political will away from federal carbon pricing just when our state’s legislature should be helping Congress act. The Energy Innovation Act was a bipartisan bill in the two previous sessions of Congress, and now has 95 co-sponsors (more than ever before). New Hampshire’s leaders can help make it happen with personal endorsements and with a resolution asking Congress to do it.
We should also prepare. A request to Governor Sununu offering ideas on how to do that recommends shadow carbon pricing, increasing investments in energy efficiency and electrification, accelerating support for clean energy deployments, and discouraging gas heating or cooking expansion.
HR 17 is a test for the New Hampshire State Legislature. Will it oppose this resolution and instead champion the #1 expert-recommended, bipartisan, beneficial, and comprehensive solution to address a serious pollution threat? If our representatives listen to the overwhelming public opposition to HR 17 expressed at the hearing (149 to 4), they’ll do just that.