HB735 - Carbon Cash-back

HB735 Info sheet 
Co-authors: Rep. Lee Oxenham and Rep. Ken Wells

[Click here to go to the "Carbon Cash-Back" website.]

New Hampshire’s “Carbon Cash-back” proposes a plan that has been heralded by thousands of leading economists as the fairest, most effective, and least costly way to reduce the growing damage caused by carbon dioxide pollution. Sometimes “Carbon Cash-back” is called by a technical description: a “carbon fee and dividend” program. Here’s how each part of the Carbon Cash-back plan works:

Carbon Fee – A gradually-rising fee on the net carbon dioxide pollution from fuels that increase atmospheric CO2. 

• Purpose: Creates market-driven demand for cleaner energy technologies. Reduces NH carbon emissions by correcting market distortions due to “free” carbon pollution. 

• Details: Pollution fee starts at $20 per short ton of CO2e, increases $10/ton each year. Assessed once, at the point of importation into NH, and is reduced by the amount of CO2 emission fees already paid on a particular shipment nationally or regionally. (No double-dipping)
• Exemption for non-emissive uses of carbon feedstocks, such as polymer and pharmaceuticals manufacturing.

Carbon “Cash-back” Dividend Fund – Rebates essentially 100% of net revenues in equal shares to all NH citizens over 18 (less an estimated 1% for postage and administrative expenses). 
• Purpose: Reimburses NH people in equal shares for the damage experienced across our state to our health, our property and damage to the natural beauty and economic value of our NH environment. 
•Stimulates local economies, by encouraging local renewable energy jobs and projects. Rather than sending about $4 billion NH dollars out of state in exchange for polluting fuels (which NH does not extract or refine), more NH dollars would be spent on locally produced energy like hydro, solar and wind, to be spent and re-spent in NH.
• Maintains revenue neutrality. This “cash-back” method of putting a price on carbon pollution has an important advantage over cap-and trade or carbon taxes. It is emphatically not a tax, but a reimbursement to citizens from endeavors that damage our shared atmosphere.
•The “cash-back” rebate offsets fuel cost increases for more than 60% of NH households. The rebate’s break-even point covers the equivalent of an individual’s annual purchase of 1600 gallons of liquid petroleum fuels (gasoline + heating oil + diesel), or 2500 gallons of natural gas or propane. It will result in net pocket cash for individuals who use less than these per capita amounts. (This projection was based on Feb 2020 prices, before fuel prices dropped precipitously. Now that most fossil fuel is 2/3 as expensive, the break-even jumps up to 2400 gallons of gasoline or heating oil yearly, or 3750 gallons of natural gas or propane, making CCB even easier to bear. Most folks use far less than this, but it's frankly hard to project what the fee revenues will be, since demand has also fallen off.)

• Details: Equal share to adults who complete an opt-in form establishing a bonafide NH residence and mailing address. Administered by NH Dept of Environmental Services. Options for payment are full-value rebate annually, or monthly payments with $1 postage and handling deducted. First-year estimated revenue of $300 million would result in a citizen’s annual rebate check of roughly $300 or, if the monthly option is chosen, a $24 check each month.

Regulatory Adjustment – Reduces NH’s fee on covered CO2 emissions if the federal bill is passed, by the amount already paid to US. (no “double dipping”)