Here Comes the Carbon Tax Again

By John McClaughry

The carbon tax warriors are promoting yet another version of “carbon pricing”. This new version is the “Transportation and Climate Initiative” (TCI), promoted in nine Northeastern states by the Georgetown (University Law School) Climate Center.

A December 19 report by Mark Johnson in Vermont Digger described the TCI as a “pricing mechanism” that “caps the amount of greenhouse gas emissions that are allowable in particular industries or across the economy, and then creates a carbon market that allows entities to trade pollution allowances, benefiting those who cut pollution faster and imposing an increasing financial burden on heavy polluters.” Got that?

Let me make it easier to understand.

According to carbon tax backers, the planet is imperiled by the Menace of Climate Change caused by humans recklessly burning fossil fuels to get to work and school, earn their paychecks, and heat their homes and businesses.

The carbon dioxide that that combustion emits is “carbon pollution” (despite being essential to plant and human life.) Forty percent of the total emissions are produced by transportation – gasoline and diesel. This is intolerable.

The TCI coalition states will agree to limits on how much gasoline and diesel fuel the suppliers of gasoline and diesel fuel in those states can sell. The coalition will distribute funny money emission allowances to its nine governments – for free.

If using its products emits more carbon dioxide than the allowed cap, a supplier will have to buy funny money allowances from firms that are under their caps, and of course from the nine state governments that awarded themselves the allowances for free. The suppliers will add the cost of the allowances purchased to the prices they charge their customers.

The coalition governments will spend the proceeds from selling the allowances on whatever their legislatures approve. That could include subsidizing motor fuel for lower income and/or rural people to ease the burden of the higher fuel prices, subsidizing (further) the purchase of electric vehicles, or (least likely) paying for highway and bridge maintenance, toward which the electric vehicles pay… nothing.

Make no mistake: this cap-and-trade scheme is a carbon tax. The governments make motor fuel suppliers pay them for allowing them to sell each gallon of gasoline and diesel. The suppliers have no choice but to make their customers pay the extra cost. The motorists pay, and the governments collect.

Does this TCI cap-and-trade idea sound familiar? In August 2016 the Democratic gubernatorial candidate Sue Minter offered precisely this multi-state plan.

In the October 6, 2016 debate, Minter tried to explain that a “carbon tax” meant “Vermont going it alone”, and that a regional cap-and-trade carbon pricing plan (like TCI) was not a carbon tax.

Republican candidate Phil Scott didn’t buy that. After listening to Minter’s tortured explanation, Scott said “it sure looks like she supports a carbon tax.” In that campaign, and since as governor, Scott has repeatedly pledged to veto any carbon tax bill that the legislature sends to his desk.

It will be another year before the TCI coalition finalizes its proposal for the nine-state agreement to impose a carbon tax on gasoline and diesel. Scott’s Deputy Natural Resources Secretary Peter Walke has been Scott’s representative to the TCI coalition design process. The governor needs to make it crystal clear to Walke that Vermont will not buy into any form of “carbon pricing” that is in fact a carbon tax, no matter how disguised.

Since there is no form of transportation “carbon pricing” that will not sock it to Vermont consumers through higher prices for gasoline and diesel, the governor should tell Walke to stop flying off to participate in TCI meetings convened to devise some way to put that scheme over on Vermont businesses and motorists.

John McClaughry is vice president of the Ethan Allen Institute.

{ 1 comment… read it below or add one }

Rob Roberts January 7, 2019 at 4:55 pm

Thanks for that explanation, John. I really did not understand what our representatives were trying to do as I never looked into it. (Probably like a lot of other voters). I just did not want more taxes. Now I can present some arugment to my representative based on something.

One thing I wonder about is: are there any ramifications on what and how Vermont negotiates or agrees, with the other Coalition members, on what Vermont’s limits or caps are for its suppliers? Would other states care what Vermont sets? Suppliers cross state lines, so will this have an affect on the Coalition?

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