Carbon pricing, also known as a carbon tax, is a way to incentivize society’s transition away from fossil fuels. The idea is to charge fossil fuel companies a tax on every unit of fossil fuel they sell. Federal carbon taxes have been proposed, but in the current political climate, passing state legislation is more promising. Most New England and west coast states are currently considering carbon pricing bills. Here in Rhode Island, the proposed bill is called Energize Rhode Island.
The Energize RI bill would rebate most of the tax revenue collected directly to all Rhode Island residents and employees. Rhode Islanders who use less than an average amount of fossil fuels would come out ahead. The remaining revenue collected would go toward a Clean Energy and Jobs fund, training and paying for jobs in weatherization, construction, and renewable energy resources, and expanding access to renewable energy and energy efficiency for more Rhode Islanders.
Carbon pricing helps to fund the kind of work and development that makes renewable energy and energy efficiency more widespread and usable—important because people, companies and governments often use lack of money as a reason to avoid making these changes. And it means that fossil fuel companies help pay for the changes that offset the damage they caused, rather than passing the bulk of that financial burden on to society.
Carbon pricing is one potential interim step in developing our capacity to leave fossil fuels behind forever and stop producing greenhouse gases. By providing a financial incentive for reducing carbon pollution, it uses market forces to encourage a transition to renewable energy and a cleaner state.