MIT Climate Action Team hosts ‘The Future of Climate Policy’ panel

Panelists discuss carbon pricing legislation to incentivize green technology

The MIT Climate Action Team hosted a panel last Thursday, titled “The Future of Climate Policy.” Panelists discussed the benefits and disadvantages of carbon pricing legislation, which places a fee on carbon dioxide (CO2) emissions to incentivize the innovation and adoption of environmentally friendly technology and business practices.

The panel featured five speakers: Massachusetts State Senator Michael Barrett, Massachusetts State Representative Jennifer Benson, Climate XChange Policy Director Marc Breslow, Department of Urban Studies and Planning Professor Janelle Knox-Hayes, Sloan Professor John Reilly, and Sloan Professor Christopher Knittel.

Before the panel formally began, Robbie Madfis, the chief procurement officer of a company called Soli, spoke about the company’s mission to “leverage consumer spending to reduce CO2 emissions, fight climate change, and support a sustainable business community.” Companies pay Soli to serve as an advertising platform on its app, Solipoints. In turn, Soli uses that money to buy and retire carbon credits, such that each dollar spent by an app user at a participating store is equivalent to two pounds of retired CO2. App users also earn one point for each dollar spent, and they can redeem points for cash to use personally or to donate to an environmental nonprofit.

Then, Barrett and Benson introduced their respective carbon pricing bills. Both place a fee on CO2 that will gradually increase until it reaches $40 per ton. The main difference between the two is in the usage of money collected through this fee. Barrett’s bill is 100% revenue neutral, meaning that all the money would be returned to households, businesses, and institutions through rebates. Benson’s bill is revenue positive, and 80% of the money would be returned, while the other 20% would be used to fund green infrastructure investments, such as funding for solar panels at local public school districts.

Barrett argued that the revenue-neutral approach is preferable to protect low-income households. “A progressive income tax is a great way to fund solar programs. A carbon tax is a bad way, relatively speaking, because it is a regressive tax. It hits you depending on the amount of fuel you consume rather than the amount of money you make,” Barrett said.

Benson claimed that the revenue-positive approach is necessary to facilitate green infrastructure measures. “Time is not on our side. To only rely on market-driven measures without investing real dollars into … climate adaptation and renewable projects, we’re simply not going to get ahead of this problem,” Benson said.

The rest of the panel members stated that they support both bills, as any form of carbon pricing would be useful for Massachusetts.

The panel also discussed counter-arguments against carbon pricing, the principal complaint being political opposition to a new tax. The carbon fee could increase the prices of commonplace goods, such as gasoline and heating. Reilly added that much of this negative impact would fall on low-income consumers, and that the government faced a challenge in generating the funds necessary to build more environmentally friendly infrastructure.

However, Knittel explained that much of this opposition is misplaced, as carbon pricing is a far cheaper and more effective method of reducing CO2 emissions than existing climate policies, such as fuel economy standards and renewable portfolio standards. Breslow agreed, stating that much of the issue stems from the fact that carbon pricing makes the financial costs of reducing emissions obvious, while the other policies hide the costs.

However, if Massachusetts can overcome this political opposition and pass a carbon pricing bill, it can serve as a model for similar legislation in other states and countries. “The power of any state-level price on carbon is as a demonstration project,” Knittel said. “In 2020, Congress can use Senator Barrett’s bill or Representative Benson’s bill as this poster child that shows that carbon pricing actually works.” Knox-Hayes added that this legislation could spur international action, stating that “state initiatives are really important in demonstrating to the rest of the world that, even if at the federal level, the United States is inactive, at the sub-national level [it is].”

In response to an audience question about how MIT can contribute to climate action awareness and policy, Barrett responded that many faculty members, including Knittel, have already been serving as sources of policy advice in the national battle against climate change.

Finally, Ben Harpt ’18 provided some concluding remarks about ways MIT students and other Massachusetts residents could get involved in the fight against climate change and for a carbon pricing policy. He recommended that people sign up for email updates from the group Climate XChange, join the MIT Climate Action club, and sign its carbon pricing endorsement form.

“Although it's easy to become dismayed with the lack of climate leadership we're seeing on the federal level, we wanted to highlight how our state can take strong climate action,” Claire Halloran ’20 wrote in an email to The Tech. “We're hoping that this event will spark interest in the MIT community in climate policy. The MIT community is very focused on discussing the science of climate change and developing technology solutions, and we believe that these efforts must be complemented by policy solutions to mitigate climate change.”