My Turn: Is it time for carbon cash-back?

For the Monitor
Published: 1/3/2020 6:00:58 AM
Modified: 1/3/2020 6:00:35 AM

The U.S. debate on carbon pollution falls into two categories: the people who accept the science and fear climate disruption, and the people who view the science as unsettled and think it is cheaper to ignore the buildup of emissions in the atmosphere.

The effect of this ongoing political dispute is that we no longer discuss our options. But isn’t that our job, to uncover the options and give you a chance to weigh in on policy that affects you? Perhaps we can start by agreeing that pollution does not fix itself and carbon pollution is no exception.

In 2007, 164 New Hampshire towns passed warrant articles calling for our political leaders to take action on climate change. The warrants called for protecting New Hampshire’s people from the predicted economic and environmental impacts of “doing nothing.” The people spoke, but the question remained: What should we do?

Well, it turns out people all over the world have already figured out the most effective way to rapidly bring down harmful pollution: Stop making it free.

When pollution is free we get too much of it. In a Jan. 17, 2019, Wall Street Journal article, 3,354 U.S. economists argued for a carbon fee and dividend program in the United States. Their idea: charge fossil fuel polluters to correct a market failure that externalizes the costs of their pollution, then rebate equal shares of the money collected to consumers to shield them from any resulting increase in costs. They argued that only a market-based approach could both address the scale of the pollution problem and support consumers during the economic transition.

So while New Hampshire is not often a leader in New England energy policy, we have the chance to pass a carbon cash-back bill (House Bill 735) that finally responds to those 164 town warrants with a proven solution. We could be the catalyst for all the pending bills at the state and federal level, just as Ottawa led the way for all of Canada in 2018.

The New Hampshire bill proposes charging a penny a pound for pollution (or $20 per ton) to fossil fuel producers importing into the state. The carbon price will generate approximately $300 million in year one based upon New Hampshire’s estimated emissions (roughly $300 cash back per adult). HB 735 proposes the fairest distribution method: equal shares to every Granite Stater over 18. The carbon price increases $10 per year for 10 years. As emissions go down, individual cash-back payouts go up, giving consumers more energy investment options while the air gets cleaner.

New Hampshire’s carbon cash-back (CCB) program would use an opt-in process, like the petroleum dividend enjoyed by Alaskan residents, administered as a revenue neutral pass-through, not a tax, from the fossil-fuel producer to the energy consumer.

Carbon pricing has been adopted in 46 countries, but the places delivering cash back have had the best overall results. Independent studies show the lowest three-fifths of households by income break even or receive more cash back than they pay out. In terms of economics, investments in clean energy spur new jobs and accelerate community and business innovation.

Though naysayers have dominated the policymaking for some time, we really do have to find a way for New Hampshire to transition to a new energy economy that will keep it competitive in the 21at century.

Critics often cite higher gas prices as a reason to maintain the status quo (as though we have ever had any real control over OPEC’s price per barrel). But, when we paid higher gas prices in the past, we received no annual rebate and gained no benefit to our economy or the environment.

The Congressional Budget Office estimates that the per-gallon increase due to a carbon cash-back program would be approximately 18 cents per gallon in 2021. (Gas prices have risen more than 18 cents just this year and it hasn’t registered in the news.)

Arguments against carbon cash-back center on the idea that fuel costs will remain low if we do nothing or that they will be inordinately high if we take action. But the 3,354 U.S. economists disagree. Fossil fuel costs will rise as our emissions problems worsen, and fossil fuel dependence will rise if market prices continue to be kept artificially low. So, if we don’t break the cycle, our current course leads to more cost, more pollution and more dependence. In fact, our most costly course of action is to keep ignoring the problem.

Help us continue the discussion at town meetings across the state as HB 735 moves through the legislative process in 2020. To learn more and help build support for your town’s warrant article, please check out the Carbon Cash-back Coalition at

Happy New Year!

(Kat McGhee of Hollis represents Hillsborough District 40 in the New Hampshire House of Representatives, where she serves on the Science, Technology and Energy Committee.)

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