Tim Benson: A Carbon Tax Would Hurt Rhode Islanders for Environmental Speculation


A proposal being considered by the Rhode Island Senate would establish a carbon-dioxide tax on fossil fuels, including gasoline, natural gas, coal, propane, and “any other petroleum product,” starting in 2019. The purpose of the carbon tax is to decrease carbon-dioxide emissions by levying a tax based on the amount of emissions produced. The tax would begin at $15 per ton in the first year and increase by at least $5 per ton each subsequent year. However, the tax would not come into effect until neighboring Massachusetts and Connecticut also passed coordinated, virtually identical carbon-dioxide tax legislation.

The proposal would also establish a “clean energy and jobs fund” that would be used to “help residents and employers transition to cleaner energy options and mitigate any potential economic harm from the carbon price imposed” in the bill, including “direct dividends” to both employers and state residents.”

The dividends are necessary because carbon dioxide taxes are inherently regressive and disproportionally harm low-income families. The Congressional Budget Office (CBO) found a $28 per ton carbon tax would result in energy costs being 250 percent higher for the poorest one-fifth of households than the richest one-fifth of households.

CBO reports the reason for cost discrepancy is “a carbon tax would increase the prices of fossil fuels in direct proportion to their carbon content. Higher fuel prices, in turn, would raise production costs and ultimately drive up prices for goods and services throughout the economy … Low-income households spend a larger share of their income on goods and services whose prices would increase the most, such as electricity and transportation.”

A 2013 study by the National Association of Manufacturers estimated a $20-per-ton carbon-dioxide tax in Rhode Island, which would be reached in 2020 under the proposed bill, would result in a 40 percent increase in the price of natural gas. The study also estimated gasoline prices would be 20 cents per gallon higher and that there would be a 22 percent increase in household utility rates. Incredibly, all this is projected to occur in the first year.

Another problem with a carbon-dioxide tax is any environmental benefits that it might produce would be effectively meaningless without concomitant legislation enacted throughout the rest of the globe.

In a December 2015 speech to the U.N. Framework Convention on Climate Change (UNFCCC), former Secretary of State John Kerry said, “The fact is that even if every American citizen biked to work, carpooled to school, used only solar panels to power their homes, if we each planted a dozen trees, if we somehow eliminated all of our domestic greenhouse gas emissions, guess what—that still wouldn’t be enough to offset the carbon pollution coming from the rest of the world.” A state-based carbon tax would have even less impact on global temperatures.

It is likely for these reasons the U.S. public finds the idea of a carbon tax so unpopular. A September 2016 poll conducted by the Energy Policy Institute at the University of Chicago and by the Associated Press-NORC Center for Public Affairs Research revealed 71 percent of respondents said they were unwilling to pay an extra $20 month on their electric bills to combat climate change, although this amount is “roughly equivalent to what the federal government estimates the damages from climate change would be on each household.” Further, almost half the respondents, 42 percent, said they would be unwilling to pay even one extra dollar.

At 17.01 cents per kilowatt hour, Rhode Island currently has the second-highest retail electricity prices in the continental United States, according to the U.S. Energy Information Administration. A 2016 WalletHub study also found at $338 a month, Ocean State residents face the third-highest total energy costs in the country, and the Tax Foundation already ranks Rhode Island’s tax climate the country’s 44th worst. A carbon-dioxide tax would make everything more expensive for working families in Rhode Island, who are already pinched by the state’s high costs, leaving them less to spend and save – all without any guaranteed environmental benefits.

Tim Benson a Policy Analyst for The Heartland Institute.

  • oceanstater

    Disappointed in this. There is an old saying, if you want less of something, tax it and let the market go to work. We do want less carbon dioxide. As long as the tax is mostly refunded to the populace, seems like a good idea. Those that conserve will come out ahead, those that waste energy will pay.
    Of course no one thing will make much difference to the world’s climate, we have to do lot of little things, each one subject to the argument it won’t make much difference. That’s a recipe for inaction. but we’ve been warned about the consequences of inaction. Most of the world has gotten the message but apparently not Heartland

  • BasicCaruso

    Out-of-state billionaires really do care about you, Little Rhodie! And btw this has nothing at all to do with the money… ka-ching!

  • BasicCaruso

    Meanwhile the locals increasingly pay the price…

    “Lobstering to be trimmed to counter effects of climate change”

    New restrictions are coming to Southern New England’s lobster fishery in an attempt to save the area’s population of the crustaceans, which has dwindled as waters have warmed.

    An arm of the interstate Atlantic States Marine Fisheries Commission voted Tuesday to pursue new management measures to try to slow the decline of lobsters in the area. Management tools will include changes to legal harvesting size, reductions to the number of traps and seasonal closures to fishing areas.

    The board’s move was “a recognition that climate change and warming water temperatures play an increasing role in lobster stocks, especially in southern New England,” said Tina Berger, a spokeswoman for the commission.

  • BasicCaruso
  • BasicCaruso

    “A Reagan approach to climate change”

    We all know there are those who have doubts about the problems presented by climate change. But if these doubters are wrong, the evidence is clear that the consequences, while varied, will be mostly bad, some catastrophic. So why don’t we follow Reagan’s example and take out an insurance policy?

    First, let’s have significant and sustained support for energy research and development…

    Second, let’s level the playing field for competing sources of energy so that costs imposed on the community are borne by the sources of energy that create them, most particularly carbon dioxide. A carbon tax, starting small and escalating to a significant level on a legislated schedule, would do the trick. I would make it revenue-neutral, returning all net funds generated to the taxpayers so that no fiscal drag results and the revenue would not be available for politicians to spend on pet projects.

    — George P. Shultz, secretary of state from 1982 to 1989

    • Mike678

      Kneel at your altar all you want, Russ. But please don’t try to force your delusion on the rest of us.

      “We all know there are those who have doubts about the problems presented by climate change.” You forgot the “anthropomorphic” before climate change. How many time do we have to state the obvious–that climate has changed since day 1?

      First–determine what % of climate change is man-driven–and how.

      Second–determine if we can modify that amount–a holistic cost/benefit analysis.

      Third–Act if the benefit outweighs the cost.

      You have a long way to go…..

      • BasicCaruso

        What me worry? What would Reagan do?

      • Honesty Broker

        We all know that climate change started at day one – so you can stop with that distraction. It is the rate of change that is the issue.

        It’s awesome that you laid out a 3-step plan to deal with it but the republican/conservative/Koch agenda prevents all that from happening, doesn’t it?

        And of course Donald Trump, your hero, is shutting down research, removing data, cutting back the EPA, and muzzling what’s left of the EPA – so much for your 3-step process.

        Other countries have moved to clean energy to the extent that they have had a couple of days where they were running on nearly 100% clean energy. Countries like China and India are closing down coal mines.

        At the same time we are going backwards just to protect the pockets of a handful of America-haters at the top of the fossil fuel industry…. some of who provide funding to the mother ship of this web site.

        • Mike678

          Not so. Russ likes to conflate the two–I’m pointing out they are different. It’s important to see the hidden assumptions when critically examining a subject. Also remove emotion. Perhaps if you didn’t come into the discussion with anger and bias you’d see that.

          Trump isn’t my Hero–Is that your anger, frustration and perhaps hate talking? The divisive nature of the left that often promotes a “with me or the enemy” mentality. Why can’t we try to see points of commonality vice divergence?

          As for throwing banners like “Koch, ALEC, etc…seriously? You sound like a ranting left wing loon. Or a parrot, perhaps. Credibility–nil.

          I like the Supreme Courtchoice. I like that he’s trying to improve the economy.

          • Honesty Broker

            what are you referring to when you say “not so”

            not left at all – a proud unaffiliated citizen.

            It’s cute how you accuse me of having anger and bias. This site, its parent site, RI Center for Freedom and Prosperity, and their parent site SPN are nothing but bias…. and every gets so defensive when they are called out….it’s surprising you deny Koch and ALEC

            Ranting loon – lol.

            And yes… Trump is your hero