CONCORD — Rep. Lee Oxenham, a Democrat from Plainfield, has partnered with Democratic Sens. Martha Fuller Clark and David Watters of Dover to propose a carbon tax on all fossil fuels imported into New Hampshire.
Their bill, presented at a public hearing on Wednesday, was called a path to a clean energy economy by supporters and an unnecessary burden on New Hampshire residents by opponents.
It calls for a fee based on the per-ton emission of carbon dioxide starting at $20 per ton in 2020 and increasing each year, based on a complicated formula, to $53 per ton by 2023.
The fee would be levied on wholesale distributors of fuel products imported into New Hampshire and passed along to consumers.
The Department of Environmental Services estimates the fee would generate $300 million in 2020 and rise to $795 million by 2023, based on assumed emissions of 15 million tons of CO2 each year.
Seventy percent of the money collected would be rebated to state residents, 20 percent would be used to fund greenhouse gas-reduction programs, 5 percent would be used for rebates to large commercial and industrial energy users, and 5 percent would be used to administer the fund.
The impact on gasoline prices was estimated at 18 to 20 cents a gallon in the first year, increasing every year thereafter.
“Even if 75 percent of the revenue is rebated, this is a high-risk scheme that will crash our economy and hit the wallets of every single resident,” said Minority Leader Rep. Dick Hinch, R-Merrimack.
Oxenham called carbon pricing “an equitable, cost-effective mechanism to support our transition to a clean economy and phase out the use of fossil fuels.”
She said the goal is to improve air and environmental quality, promote innovative energy technology and address the challenges of climate change.
“Currently, all the states of New England are poised to enact carbon pricing this year,” she said. “More than 1,000 businesses, including major Fortune 500 companies, have all signaled support for using this kind of pricing mechanism.”
Rep. Michael Harrington, R-Strafford, a former member of the Public Utilities Commission, pointed out that the rebate scheme addresses property taxpayers and people who live in government subsidized housing, but appears to have overlooked apartment dwellers.
“We need to address that before this bill gets much further,” Oxenham said.
Michael Fitzgerald, assistant director of air resources division at the Department of Environmental Services, said the DES takes no position on the bill, but acknowledged that a number of other states are considering similar policies.
“A number of leading economists do believe that carbon pricing is the most efficient way to deal with reducing carbon emissions,” he said.
Fitzgerald alluded to the successful effort to reduce sulphur dioxide emissions from Midwestern smokestacks through a tax on those emissions. The acid rain from those emissions that at one point was damaging New England waterways has largely been brought under control, he said.
Everyone agreed that the problem of carbon emissions would best be addressed on the national level, or at least regionally.
“Why have a state-based bill? Unfortunately, it’s the only way we can go forward,” said Oxenham. “We can work with our regional partners. The federal system is stymied, so action has to take place at the state level.”
Rep. Jacqueline Cali-Pitts, a Portsmouth Democrat, said she is concerned about people who will have to pay the higher fuel costs, even though rebates would be issued quarterly.
“A lot of people don’t have that up-front money,” she said.