Carbon Pricing Basics

HOW IT WORKS

  • Carbon-based fuels, such as gasoline, oil, and natural gas, are assessed an additional fee at the source.
  • Part or all of the revenue collected through this carbon fee is rebated back to individuals and businesses.
  • As businesses reduce their consumption, their fee goes down, while their rebate checks remain the same. Many businesses will realize net profit through these rebates.


MASSACHUSETTS LEGISLATION

There are currently two key bills in the Massachusetts legislature that focus on putting a fee on carbon pollution.

1821, An Act Combating Climate Change

Sponsored by Senator Mike Barrett

100% of the revenue would be returned to households, businesses, and institutions. For charges paid by businesses and other institutions, each would get a rebate in proportion to its share of total employment in Massachusetts. Additional rebates would be provided to households in rural areas and to businesses that are energy-intensive and face stiff out-of-state competition. The fee would start out at $10 per ton of CO2, rising $5 a year until it hits $40 a ton.

H 1726, An Act to Promote Green Infrastructure, Reduce Greenhouse Gas Emissions, and Create Jobs

Sponsored by Representative Jennifer Benson

80% of the revenue would be returned via rebates to households and employers, while 20% would be used to fund green infrastructure investments in transportation, clean energy, and protection against the impacts of climate change. Because the bill rebates funds to employers based on their number of employees, most business sectors would come out ahead or about even, and there would be a net gain to employment in the state. dditional rebates would be provided to households in rural areas and to businesses that are energy-intensive and face stiff out-of-state competition. The fee would begin at $20 per ton of CO2, and rise $5 a year until it hits $40 per ton.