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August 19th, 2019

Investment and Return: How to Boost Vermont’s Economy and Address Climate Change

GUEST OPINION

By Paul Costello

Carbon tax. Cap and Trade. Carbon Markets.

 Depending on our point of view, these concepts might make us nervous about raising the cost of living when we are already struggling to pay our bills. Or we may feel passionately about the necessity of pricing carbon for the future of our climate and our economy. Or both. And a lot of people find it all so confusing that they just tune out.

Rather than choose sides, we need to agree to think together as Vermonters. We need to consider the science around climate change, and work out how we can systematically advance our economy, preserve affordability, incite and inspire the creativity of entrepreneurs while dramatically reducing our carbon impact. No one has all the answers.

Thankfully, an independent report—an analysis of how to lower the amount of carbon we emit in Vermont – was released to the Vermont Legislature this January. It adds some rational economic evaluation to this challenging dialogue. The report analyzed various carbon pricing and other non-pricing policies and their impacts on the Vermont economy.

I’m writing for the Vermont Climate Economy Action Team (CEAT) which represents hundreds of businesses and individuals working together to seek economically beneficial approaches to the challenge of climate change. CEAT is dedicated to initiatives that boost economic development, create jobs, and attract youth and entrepreneurs to Vermont while reducing our carbon impact.

As a group of business and non-profit leaders from all walks of life and political affiliations we have one thing in common – the belief that implementing innovative strategies to tackle climate change can and should help secure and improve our economic future. CEAT recommended and supported the decarbonization study so that policy conversations around this controversial issue would be informed by economic realities.

The report found that carbon pricing – including a carbon tax – paired with climate policies would have minimal costs to Vermont’s economy and enormous possible benefits. These climate policies could include doubling funding for Vermont’s weatherization program and creating incentives to buy electric vehicles, both supported by CEAT. The report also found that in order to meet Vermont’s carbon emission goals the state would need to not just put a price on carbon but reinvest a portion of the funds raised into aggressive climate policies. And, the report says, unless significant revenue was returned to lower income Vermonters, there would be negative implications for affordability, especially for people in rural communities. 

If anyone thought there was a silver bullet, or that this would be easy, the study makes it clear that there are no simple black and white answers. In fact, getting this right is a profound challenge for us all, one we need to work out as a democracy, in line with the common good—not just for today but for all the generations ahead.

There are several different models for carbon pricing and investment in economic progress. Vermont could choose to develop its own system or take a regional approach. Once a price is placed on carbon the state will have a number of options to choose from regarding how it reinvests those dollars back into the Vermont economy for optimal benefits for all Vermonters.

The Climate Economy Action Team believes that the State of Vermont should partner with other states and/or Canadian provinces in a system that reduces the use of carbon fuels in transportation and heating while stimulating affordable alternatives. This system would expand economic opportunity, innovation, business development and job creation while increasing affordability and reducing heating and transportation costs for lower income Vermonters. It would return revenue in an equitable way to Vermonters while building investments with strong economic return in clean energy, efficiencies, green research and development, carbon sequestration, transportation and heating systems change.

Policy makers have many choices before them. One thing is clear: old mechanisms, paradigms, and ways of thinking will not be sufficient to bring about the wholesale change we need to address the climate challenge and seize the economic opportunities in the green economy of the future. This report verified that historical approaches are not going to get us where we need to go – for either our economy or the environment. The new study doesn’t give us all the answers but it succeeds by providing practical foundations for the next steps. Addressing problems we’ve never had before requires finding solutions we’ve never tried before.

We Vermonters, as a people, need to think together, creatively and in the spirit of civility and neighborliness that the state is famous for, to find our best path forward. We have an opportunity to transform our struggling rural economy into a place where we are at the forefront of the climate economy; where we stimulate economic opportunity, innovation, job creation and affordability while also reducing our carbon impact. Elected officials now have an independent analysis on carbon pricing to work from and they should not let this economic and environmental opportunity pass.

The full “Analysis of Decarbonization Methods in Vermont” report can be found at https://ljfo.vermont.gov/committees-and-studies/decarbonization-study

Paul Costello is the Executive Director of the Vermont Council on Rural Development which convenes the Vermont Climate Economy Action Team.

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