The bill would redistribute money to citizens and local businesses, an idea supported by both conservative and liberal economists. Why you can trust us By Eben Bein 12 MIN READ

It was 1 o’clock on a Tuesday, and the B-1 Hearing room of the Massachusetts State House was packed. People were pressed hip to hip into the pews, grandparents next to high school students, business owners next to pastors, lawyers next to activists. Every inch of standing room was occupied. Despite the brisk autumn air outside, the room was stuffy and everyone was sweating.

Public hearings happen every day in the State House, most with only a handful of attendees, if that. But on that day, October 27, 2015, one representative’s aide said with a hint of excitement in his voice that they knew “this one was going to be crazy.” Bill S.1747 was up for comment.

S.1747 would make Massachusetts the first state in the nation to collect fees from fossil fuel companies for importing fossil fuels into the state. The funds raised would be redistributed among the citizenry and local businesses to compensate for increased prices. It’s a method for combating climate change now backed by both conservative and liberal economists.

Similar so-called carbon fees are already levied in several countries, including Ireland, Chile, and Sweden. This bill was modeled on the most successful of these, enacted in British Columbia in 2008. British Columbia has since grown its economy, particularly its clean energy sector, while decreasing its fossil fuel use by 16 percent.

S.1747 would make Massachusetts the first state in the nation to collect fees from fossil fuel companies for importing fossil fuels into the state.

In the United States, however, similar national legislation has met with strong opposition, particularly from corporate-associated organizations like the American Legislative Exchange Council (ALEC) and Americans for Prosperity (AFP). AFP—largely funded and chaired by multibillionaire and oil magnate, David Koch—has a particularly impressive record of obstructing environmental policies like this in order to protect Koch Industries’ most important assets, oil and gas. AFP has unified the Tea Party against the concept of national carbon fees and proponents have been unable to push a federal bill through the resulting national gridlock.

In the fourth row of room B-1, sat Jessica Langerman, a slight, 55-year-old woman in a blue sweater and purple eyeglasses, brown hair tucked carefully behind her ears. Six years before she had been a complete political outsider—a high school English teacher turned freelance writer, and a mother of three, from Wellesley, Massachusetts. But no longer. If the nation was not ready to put a price on carbon, she’d decided to get her home state to do it. The scene before her marked a critical step toward the bill’s moment of truth, and proof that her years of labor were finally bearing fruit.

Langerman was first jolted into action in 2009, when she wandered into a lecture by a member of the Union of Concerned Scientists about how climate change was already affecting New England. The list of disturbing facts spooled out endlessly in front of her: diseases and pests moving northward, more deadly heat waves, more damaging storms, no time for native plants and animals to adapt.

One point gripped her the most: Just counting the greenhouse gases already released into the atmosphere, Boston will have the climate of South Carolina by the end of the next century. “That bullet has left the gun,” the scientist said.

Just recounting it, Langerman’s voice caught. She took a deep breath before resuming, “I started looking around the room like, ‘Was anybody listening?’”

She went home that night feeling that she had been kicked in the gut. In a flurry of desperation, she replaced all her old light bulbs, traded her 2001 Audi A4 for a Prius, had her house audited for energy efficiency, and began recycling in earnest. But that feeling would not leave.

“It began to dawn on me that nothing I was doing was commensurate with the scale and the scope of the problem,” she said. To make a meaningful difference, she needed help.

Boston will have the climate of South Carolina by the end of the next century.

First, she reached out to the green team at her church. A green team member introduced her to members of Citizens’ Climate Lobby. Suddenly, she was surrounded by people on the front lines of climate politics. It was fast, even surreal. She had never considered herself an activist, yet she drew slivers of reassurance from each one she met. Perhaps collectively, they could take on this problem of seemingly intractable size.

Indeed, Citizens’ Climate Lobby was making bold moves. Her compatriots at the main branch in Washington, D.C., were advocating for a game-changing economic strategy in the war on climate change: national carbon fees and rebates.

Fees are economists’ first line of defense against the negative consequences of an activity that affects people without their consent. If things get bad enough, the government may even step in, as it did with the Clean Air Act of 1970, which set limits on carbon monoxide, nitrogen dioxide, sulfur dioxide, and other dangerous forms of air pollution. But, so far, carbon dioxide has largely eluded both fees and regulations.

This is deeply concerning to former World Bank Chief Economist Sir Nicholas Stern, who has acknowledged that carbon dioxide affects the climate of the entire planet in uncertain but destructive and potentially irreversible ways. Therefore, the failure to put a price on carbon emissions is, in his words, “the greatest market failure the world has ever seen.” Rectifying that failure was the top priority for Citizens’ Climate Lobby.

When Langerman joined them, she knew very little about the economics or the science, but the concept made intuitive sense to her. In fact, a similar thought had crossed her mind during a trip to the supermarket. While idling in a traffic jam in the parking lot, her Prius turned off automatically to save energy. But carbon dioxide still poured out of the tailpipe of the enormous SUV in front of her. “You should have to pay something to do that,” she had thought.

Since fees can be costly for consumers, Citizens’ Climate Lobby was also hoping to do what British Columbia did: redistribute the collected fees evenly among the citizenry. That way, anyone who reduces their fuel usage below average actually makes money off the system.

But Langerman soon learned that her allies in D.C. were not faring well. Critics had stopped their carbon fee proposal in its tracks, arguing that it would torpedo the economy, particularly the energy sector. The more she heard, the more her enthusiasm was replaced by that familiar feeling of powerlessness.

Then came what Langerman called “a gift from God.” A phone call from Cathy Carruthers, an economist who performed econometric forecasts for Tacoma Power in Washington State. She had a plan that might rescue the idea of carbon fees from national gridlock, but she needed a Massachusetts resident to help pull it off. A mutual acquaintance at Citizens’ Climate Lobby suggested that she seek out Langerman.

Without hesitation, Langerman signed on and was immersed in an informal crash course on environmental economics. “I only understand about one-tenth of whatever she says on the first go,” Langerman said. But with her phone on speaker, and Google at the ready, she soaked up everything she could, and soon their plan began to take shape.

Cathy Carruthers and Jessica Langerman. Photo Courtesy of Jessica Langerman.

Carruthers first encountered the carbon fee concept as an economics student in the early 1970s. During her years as forecaster for Tacoma Power, she watched the climate issue escalate to a crisis and wondered if carbon fees could provide a solution.

So, she sought the like-minded. She discovered, like Langerman did in Massachusetts, a network of advocates in Washington state eager to share their projects and the accompanying frustrations.

She learned quickly their opponent’s argument that carbon fees would kill the economy. Nevertheless, she remained skeptical. “I was an economist,” she said, “I had seen the carbon tax evaluations of the 1990s and I didn’t buy it.” How bad could impacts be? As bad as the impacts of climate change?

She knew her opinions did not hold much sway among the opposition, but she knew which economic firms did. After a long search, she found an opportunity to put that knowledge to use.

She had a plan that might rescue the idea of carbon fees from national gridlock.

Sen. Michael Barrett in Massachusetts had just submitted one of the first pieces of American carbon fee legislation—the first draft of what later became S.1747. If the bill was to be taken seriously, it would need a study showing that it would not ruin the economy. And not just anyone could run this study; it required a private firm of national and non-partisan repute. Carruthers could find the firm, but she needed a Massachusetts resident to request the study and champion it on behalf of the state.

As she listened, Langerman felt the last piece of Carruthers’ puzzle—herself—snap satisfyingly into place. If they could pull this off, they could sidestep the stalemate in D.C. and build this movement from the bottom up. “It occurred to me that this must be what entrepreneurs felt like, to create something out of nothing,” she said.

Carruthers and Langerman eventually settled on Regional Economic Models, Inc., a firm often used by government agencies and large fossil fuel companies for their own econometrics. After a few days of planning, an emboldened Langerman found herself on the line with one of their econometrists, Scott Nystrom.

Raised in Boone, Iowa, Nystrom grew up witnessing John Kerry and George W. Bush, John McCain and Barack Obama in their attempts to claim the caucus state. “I went into economics to stay neutral … get past the rhetoric,” Nystrom said. “You know, I’m annoyed at both parties most of the time.” His grandparents were all Eisenhower Republicans, but his dad was president of the United Transportation Union and his aunt was an active member of the National Education Association. Family gatherings in the Nystrom household were colorful.

With his befittingly nonpartisan air, Nystrom accepted Langerman’s request. He would model the effects of Sen. Barrett’s bill on the Massachusetts economy, with special attention to Gross State Product, job creation, and impacts on the poor. The model would only take a month or so for him to build. And it would cost a modest $38,000.

“Cathy really taught me how money should be spent.”

Langerman was dumbfounded. She had assumed that she and Carruthers might have to split a bill or two. But she had never written a check that large in her life. If she ever had money like that, she would have spent it on a car or a piece of property. Not that she was poor—she did have three kids, a house in Wellesley and a hard-working husband. But $38,000? “I hate to say it, but Barack Obama would have counted himself lucky to get $50 from me, and I would have felt pretty put upon to donate that much,” Langerman admitted. There was just no way it could happen.

Dejected, she called Carruthers to report her failure. But without missing a beat, Carruthers just said okay. She could cover $27,000 of it, if Langerman could cover the rest.

Langerman was completely flabbergasted. This woman, who she had never met, on the other side of the continent, just offered her more money than she could ever remember spending for a study that might not even work. “Can you even afford this?” she stammered.

Carruthers reassured her; she had her nest egg. Still, she had decided to work for a few more years and spend all the money she earned on environmental projects like this. She was ready to send the money if Langerman could just raise the remaining $11,000.

The next day, Langerman gritted her teeth and picked up the phone. She called every environmental organization she could think of, asking for donations to their cause. Then she waited.

A day passed. Then another. Not a single return call. Fear gave way to resignation. “I guess I was sort of … no one,” she said. It seemed that no organization would even recognize her, let alone provide her with the kind of money she was requesting.

But Carruthers’ unhesitating generosity and sense of purpose had deeply affected Langerman. “Cathy really taught me how money should be spent,” she said. It was a turning point in her own relationship with money.

Racked with a strange brew of desperation, hope and guilt, she approached her husband. Could he conceive of spending that kind of money on this project? After a moment’s thought, he said yes. With hands shaking, she wrote the biggest check she had written since buying a condo in her late thirties.

$38,000 poorer, the two women waited on tenterhooks for the results. Both ate and slept poorly. Langerman, who grinds her teeth at night, cracked a molar from anxiety. What would they do with the study if the effect on the economy was bad? Would they be morally bound to publish it? Should they bury it?

The model predicted a decrease in state carbon dioxide emissions.

Almost five weeks later, Nystrom finished the study. Unsurprisingly, the model predicted a decrease in state carbon dioxide emissions. However, since it discouraged Massachusetts from importing fossil fuel, it also kept money in state, resulting in several thousand more local jobs. That translated to a 1 to 2 percent increase in gross state product. Compared to other models he’d run, and given that Massachusetts has a total GSP of $450 billion, Nystrom admitted that this was “actually fairly large.” Langerman was beside herself. Even Carruthers, who had been cautiously optimistic all along, was impressed, especially given that the model didn’t even account for the rapidly dropping prices of renewables. “One to two percent growth? That’s hard to do!” she exclaimed. “That’s hard to do!”

When Sen. Barrett received the report, he was particularly pleased with how the bill would affect the destitute. Some worried that, once the fees forced fossil fuel distributors to hike their prices, the poor would struggle to pay the difference. But since fees would be rebated to all citizens by check ahead of time, the poor, who travel infrequently, actually came out ahead. The revenue-neutral carbon-pricing concept seemed to be a keeper.

On July 17, 2013, Langerman found herself preparing to testify in the Massachusetts State House for the first time. An exuberant Sen. Barrett had invited her and Nystrom to present their findings to his fellow legislators. Word of the study results had spread fast, and the presentation room was so full that some were barred from entry to prevent breaking fire code.

The vociferous crowd had grown silent by the time Langerman took the stage. Eager applause greeted her opening statement. Even the technical details of Nystrom’s presentation received scattered whoops and clapping.

Afterward, people approached her, eager to sign on to what had suddenly become a statewide campaign to put a price on carbon. While some were already full-blown environmental activists, “most of them,” she realized, “were just regular people like me.”

Langerman began holding meetings each week at her house with the ten most eager recruits. They called themselves the Climate XChange. They wrote a mission statement and began their outreach, receiving sizable donations from individuals and foundations. Where Langerman had first been met with answering machines, now prominent environmental organizations began returning her calls and offering additional money. Climate XChange soon grew enough to become a nonprofit and hire a few of its volunteers as fulltime employees.

At every turn they found new allies: labor leaders concerned with environmental impacts on the underprivileged, religious groups caught by the ethical obligation to protect God’s creation, business owners who sought to stabilize their future energy costs.

This motley coalition was never perfectly united. One significant point of contention was how the collected funds would be used. Some members of the environmental community felt that a proper carbon tax, without redistributing all the money, would help finance much-needed green infrastructure. At times, tensions threatened to splinter the movement.

Langerman and most of Climate XChangers knew that “tax” was a politically toxic word.

But Langerman and most of Climate XChangers knew that “tax” was a politically toxic word. Republican Governor Charlie Baker had promised no new taxes to financially squeezed Massachusetts citizens and businesses. A revenue-neutral carbon fee, while not as progressive as some hoped for, was something even the business community was willing to get behind.

These were the constituencies that packed the B-1 hearing room on October 27, to speak before the Joint Committee for Telecommunications, Utilities, and Energy. First a scientist, then a senator, next a friar, then an economist, next a pair of high school students, then a grandmother—the hearing lasted more than four hours. Many speeches ended with applause, which the moderator attempted to silence with quick raps of his gavel. This was especially true when Langerman stepped up to the microphone and announced that carbon fees are “no longer a fringe idea—they are a movement.” A joyful crowd slowly drifted out of that hearing, sensing an impending victory.

Unbeknownst to the throng of attendants, opposing testimony was submitted electronically that day: an email from David Koch’s AFP.

AFP contended that the bill would simply raise Massachusetts electricity prices even higher above the national average, while doing little to curb emissions. Massachusetts’ carbon footprint represents only 1.2 percent of the nation’s total. Even if this bill brought the state’s emissions to zero, the AFP argued, it would have little impact on total U.S. emissions and no effect on global temperatures at all. “The ability of Bay Staters to heat and light their home should not be put at risk for a policy that has zero benefits,” it said.

History has proven that legal changes at the state level often lead to nationwide ones.

Langerman knew Koch’s track record of opposing climate progress, so discovering the AFP’s testimony made her a bit uneasy. But as minor as Massachusetts’ impact on the national carbon footprint may be, history has proven that legal changes at the state level often lead to nationwide ones. The ban on gay marriage, for example, was first deemed unconstitutional by the state of Hawaii in 1993. Heated debate and legal action between states and the federal government ensued. The Defense of Marriage Act was passed and then repealed ten years later. Gay marriage was legalized in 36 separate states before finally being recognized by the U.S. Supreme Court in 2015.

Langerman and Carruthers bought 49 website domain names, one for each state, just in case. They are well aware of the potential for a national movement, and recognize that individual states will likely have to take the first steps.

Meanwhile, the climate clock ticks—the inexorable creep of sea level, the fracturing of polar ice, the rushing rivers of glacial melt, the winking out of endangered species, the intensifying of climate-fueled conflicts.

Yet to Sen. Barrett, who submitted S.1747, things are progressing according to plan. It is already cosponsored by 25 percent of the state legislature. While it takes time, this bill is not in some eerie limbo. It’s just one among 5,300 that lawmakers filed this legislative session, which ends July 31.

But the historical moment may come sooner than expected. Barrett recently decided to submit an amendment modeled after S.1747 to an omnibus energy bill that is going before the state senate on June 30. If it passes, this would shorten the carbon pricing timeline by months, if not years.

Whether or not that strategy succeeds, Barrett is not worried. “I’m a patient man,” he says, thinking back to his eight-year battle for a bill to block discrimination against gay and lesbian people. By his watch, S.1747 is “slightly ahead of schedule.”

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