States want to counter Trump on climate. It’s a struggle

Source: Benjamin Storrow, E&E News reporter • Posted: Wednesday, February 21, 2018

Climate hawks shifted their focus from Washington, D.C., to state capitals in the wake of President Trump’s 2016 victory, hoping state lawmakers might usher in the types of carbon reduction strategies the federal government could not.

But more than a year later, state climate action remains stuck in neutral, and the prospects for victory in 2018 remain far from certain.

To date, state climate victories have largely been limited to the expansion of existing programs. California reapproved its cap-and-trade program last year. The Regional Greenhouse Gas Initiative, a cap-and-trade program covering the electricity sector in nine Northeastern states, agreed to further reductions in its emissions cap. New Jersey is now on track to rejoin RGGI, and Virginia may also join soon.

Notching victories on new fronts, however, has proved far more difficult. Nowhere has that been more evident than on the subject of carbon pricing, long the holy grail of climate action advocates. Many economists believe a carbon price is the most cost-effective climate mitigation policy because it incentivizes businesses to develop strategies to reduce emissions.

“I think state governments as a whole have underperformed,” said Massachusetts state Sen. Michael Barrett, a Democrat who has long advocated for a carbon price.

“I don’t think they’ve risen to the occasion,” he added. “I think the focus has moved on to other forms of resistance. I’d like to see the states plant the flag firmly by moving together in the energy area, but I would be the first to say that state government has yet to prove itself to people’s point of resistance. That is disappointing to me.”

The challenge is reflected by the significant hurdles carbon pricing faces in some of America’s greenest states. Environmentalists have little hope of passing a proposed $35-per-ton carbon tax in New York, where Republicans control the state Senate. Connecticut and Rhode Island both have proposed enacting a $15-per-ton carbon tax, but only after Massachusetts acts. Massachusetts and Vermont both have Republican governors who acknowledge climate change, but are cool to the idea of a carbon tax.

Even in Oregon and Washington, states where the prospects for a carbon price may be best, climate hawks face long odds. Short legislative sessions and entrenched opposition to a cap-and-trade program in Oregon and carbon tax in Washington complicate the outlook for both proposals.

“Failure to move in states beyond New Jersey this year would signify the challenges remain pretty substantial and the fusion to other states is pretty limited,” said Barry Rabe, a professor of public policy at the University of Michigan and author of a forthcoming book about state carbon-pricing efforts.

Pointing to the considerable efforts of Washington’s Democratic governor to sell the idea, Rabe added, “How much more time can Jay Inslee spend on this issue?”

State efforts continue

Climate hawks are unbowed. Legislators in nine states recently announced they were forming a coalition to price carbon in their home states. And while carbon pricing is perhaps the marquee climate policy, greens noted it is hardly the only one.

States continue to move on new requirements to promote electric vehicles, boost energy efficiency programs and procure increasing amounts of low-carbon electricity.

Massachusetts and Illinois, which each recently implemented requirements for utilities to buy large amounts of wind, solar and other low-carbon resources, are good examples of state climate action, said David Ismay, a lawyer at the Conservation Law Foundation, a Boston-based environmental group that has had a say in the crafting of the Massachusetts and Rhode Island carbon proposals.

“States are moving forward. They are doing things within their power,” he said.

State climate hawks still face several immediate challenges. First, renewable energy mandates tend to be the most popular form of climate policy. But such requirements are generally targeted at the electricity sector, and transportation emissions now account for the largest source of greenhouse gas emissions in the United States. The issue is exacerbated in the Northwest, which has long received a disproportionate amount of its electricity from hydropower, and the Northeast, where the combination of cheap natural gas prices and RGGI’s carbon caps has all but led to the elimination of coal.

Second, disagreements over what to do with the money a carbon price generates can divide supporters of pricing plans. Divisions over how to spend the revenue from a carbon tax helped contribute to the defeat of a 2016 ballot measure in Washington state, which proposed using the money to offset other taxes.

Bills in Connecticut, New York, Oregon, Rhode Island and Washington all envision using revenue from a carbon price to fund renewable energy, climate adaption and transition assistance programs.

A Vermont bill largely calls for returning the revenue to residents in the form of a rebate. Massachusetts greens considered both approaches before settling on a new proposal that avoids the messy revenue debate by simply giving the governor a deadline to implement a carbon price.

Climate hawks argued that the revenue disagreements distract from the larger issue.

“What’s most important is limiting the amount of carbon and ensuring there are declines in the amount of carbon being emitted every year,” said Noah Long, legal director for the Natural Resources Defense Council’s western energy program. “It’s appropriate that states figure out the way that works out for them.”

Finally, not all states are equally committed to the idea. New York is one of the few large states considering a carbon tax, but the idea is unlikely to move forward unless Gov. Andrew Cuomo (D) really pushes it, said Conor Bambrick, air and energy director at Environmental Advocates of New York.

Thus far, Cuomo has been silent on the subject, prompting greens like Bambrick to look longingly toward Washington state.

“New York needs to take the same route,” he said. “It can’t be talking and talking and not doing what needs to be done.”

In Vermont, lawmakers have proposed a bill that calls on instituting a carbon price on transportation and home-heating fuels. Some had hoped the plan could win the support of Gov. Phil Scott, a Republican who acknowledges climate science and criticized Trump’s decision to withdraw from the Paris climate accord.

But those hopes suffered a setback when Scott rejected a recommendation by his Vermont Climate Action Commission to study a carbon tax, saying it would ultimately prove costly to Vermont consumers. Supporters have pledged to continue pushing.

“I appreciate the governor being willing to step up and step in when the federal government has abrogated its responsibility and the opportunity, but I’m hoping it’s not just rhetoric,” said Johanna Miller, energy and climate program director for the Vermont Natural Resources Council and a member of Scott’s climate committee. “I’ve been very concerned, to date, that being supportive in theory and being supportive in action is not matching up.”

Scott’s office did not respond to a request for comment.

Policies face hurdles in Northeast, Pacific Northwest

If there is going to be movement on a carbon tax in the Northeast, it will likely be in Massachusetts. Connecticut and Rhode Island’s carbon tax proposals contain provisions calling for their states to act after the Bay State. Climate hawks have some reasons for optimism in Massachusetts.

A 2008 law obligates the state to legally binding carbon reductions. State senators unveiled a plan last week to strengthen it further by requiring the governor to implement a market-based emissions strategy. The proposal, included as part of a wider energy bill, would require a price for the transportation sector by 2021, the industrial sector by 2022 and the residential sector by 2023. The approach is designed to win political support and provide flexibility to policymakers, who may now be divided over whether to pursue a cap-and-invest or revenue-neutral approach, said Barrett, the Massachusetts state senator.

“This is a paradigm shift in terms of carbon pricing,” Barrett said. “It’s less about the tool and more about the deadline.”

Whether it can win the support of Massachusetts Gov. Charlie Baker (R) remains to be seen. Katie Gronendyke, a spokeswoman for the governor, noted Baker is supportive of RGGI and backed the law that requires Massachusetts to significantly boost low-carbon energy sources like offshore wind and hydropower.

“But the administration does not support implementing any additional ‘carbon tax’ that would adversely impact businesses’ and families’ utility bills,” she said.

That leaves the Pacific Northwest as the most likely arena for action. Yet timing could be a limiting factor in both states. Oregon lawmakers have proposed a bill that would essentially pave the way for the state to join California’s cap-and-trade program. The proposal has the support of the Democratic legislative leaders who control both chambers in Salem and Gov. Kate Brown (D). But the bill’s prospects are complicated by Oregon’s off-year legislative session, which lasts for one month. Some lawmakers and business interests have questioned whether the state can effectively tackle such a complicated issue in such a compressed period of time.

The situation is similar in Washington state, where lawmakers have 60 days to pass a bill this year. The proposal cleared a key hurdle recently when it passed the state Senate Energy, Environment and Telecommunications Committee, but not before legislators halved Inslee’s proposed initial carbon price of $20 per ton. The amended bill is expected to pass the state Senate Ways and Means Committee next week before heading to the full Senate for a vote.

Democrats, who maintain one-seat majorities in both chambers, have sought to rally their members to the cause. Former Secretary of State and Massachusetts Democratic Sen. John Kerry visited Olympia last week to help bolster support for the proposal. But it still remains unclear if the plan has the votes to pass the Senate and the House, where state Speaker Frank Chopp has said lawmakers have other priorities this year.

“It’s absolutely a heavy lift politically, but the traction is very real,” said state Sen. Reuven Carlyle, a Seattle Democrat who is championing the proposal. “We have a moral imperative to do our best. This is not a small little bill down the hall.”