Pacheco: Putting price on carbon is not a tax
Senate calls its proposal a market-based compliance system
SEN. MARC PACHECO wants to make clear that the energy bill the Senate passed on Thursday night did not include a carbon tax.
Under the state’s constitution, he said, the Senate is not permitted to introduce a so-called money bill; legislation that raises or lowers taxes must originate in the House. He said the Senate bill mandates the development of a “market-based compliance system,” which attempts to put a price on carbon but not a tax.
“It’s not a tax,” the Taunton Democrat said.
An example of a market-based compliance system is the Regional Greenhouse Gas Initiative, which sets a cap on how much carbon power plants can emit by selling a limited number of emission allowances. Proceeds from the cap-and-trade system are passed along to the member states. The system, as it ratchets down the number of allowances, gives power plants a financial incentive to use less and less carbon or pay more and more for allowances.
Marcy Reed, the Massachusetts president of National Grid, wrote an op-ed Sunday in which she called for a short delay – a seventh-inning stretch, she called it – before moving on to the next phase of the state’s energy policy. Reed’s focus was primarily on proposals mandating an increase in renewable energy deployment. The bill the Senate approved on Thursday called for the percentage of renewable energy that must be purchased by retail electric suppliers to increase 3 percent annually rather than the current 1 percent.