New Carbon Pricing Bills Introduced in MA Senate and House

Client Alerts · January 24, 2017

Carbon pricing bills were filed last Friday, January 20, 2017, in both the Massachusetts Senate and House for the current session. Senator Michael Barrett (D – Third Middlesex) has introduced a “revenue neutral” bill, similar to the very popular legislation he filed in 2016. In the House, Representative Jennifer Benson (D – 37th Dist. Middlesex) has filed a “revenue-positive” bill.

Sen. Barrett’s bill, titled “An Act combating climate change” (Docket Number SD.1021), is similar to last year’s bill (SD285). With this proposal, a “carbon charge” would be added to the price of each coal, petroleum, and natural gas fuel in proportion to the CO2 emitted as a byproduct. The CO2 charge, which is endorsed by many economists, is not a tax, but rather is “revenue neutral.” The goal is to encourage individuals to be more thoughtful about their use of fossil fuels, not to generate revenue. Each state resident would receive an equal share of the total CO2 charges collected in an annual or quarterly check. Households could then spend some of this rebate money improving the energy efficiency of their homes and vehicles, and using cleaner, renewable energy instead. Revenue neutral carbon pricing provides an incentive to individuals and businesses to reduce fossil fuel consumption.

Rep. Benson’s bill, titled “An Act to promote green infrastructure, reduce greenhouse gas emissions, and create jobs”(House Docket Number HD. 1504), is a revenue-positive bill. This means that a portion of the CO2 taxes could be used to fund other state programs, unlike with the revenue-neutral CO2 charge.

Many economists believe that such carbon pricing is the single most effective step to reduce greenhouse gas emissions and fight global warming. Having bills introduced in both chambers may increase the likelihood of passage of a carbon pricing bill. Co-sponsors for both bills are being recruited, with a February 3rd deadline for House co-sponsors.

Prince Lobel hosted a panel discussion on last year’s bill by Sen. Barrett. For more information and materials on CO2 pricing, visit: http://www.princelobel.com/publications/making-the-case-for-a-co2-charge-on-a-snowy-day-in-ma/

If you have any questions or would like to learn more about how the new carbon pricing may affect you, please contact Partner, Julie Barry at jbarry@princelobel.com or (617) 456-8090.