Policy Research Shop Support for the Policy Research Shop is provided by the Ford Foundation and by the Fund for the Improvement of Postsecondary Education, U.S. Department of Education. Policy Research Shop Carbon Tax in New Hampshire An Analysis of the Economic and Social Implications The contents of this report were developed under grant P116B from the U.S. Department of Education. However, these contents do not necessarily represent the policy of the U.S. Department of Education, and you should not assume endorsement by the Federal Government.

Policy Research Shop Goal To provide a comprehensive explanation of the social and economic implications of an emissions and consumption carbon tax in New Hampshire.

Policy Research Shop Introduction A Carbon Tax Explained Supporters – Consumer reductions – Revenue generation – Green technology investments Opponents – No affordable alternatives – Regressivity

Policy Research Shop Current New Hampshire State Energy Consumption Breakdown of fossil fuel energy sources in New Hampshire Carbon intensity of fuel sources Heating and transportation Price elasticity of fuel sources in New Hampshire New Hampshire Climate Change Policy Task Force. “The New Hampshire Climate Action Plan: A Plan for New Hampshire’s Energy, Environmental and Economic Development Future.” New Hampshire Department of Environmental Services. (2009): 14.

Policy Research Shop Current New Hampshire Climate Policies Existing climate policies and a carbon tax New Hampshire State Climate Action Plan Regional Greenhouse Gas Initiative (RGGI) New Hampshire’s withdrawal from RGGI Climate policies and elasticity A carbon tax and the Climate Action Plan

Policy Research Shop Impacts of a Carbon Tax on New Hampshire business “Race-to-the-Bottom” Manufacturing Industry in New Hampshire Environmental Industry: 16,000 jobs or 3.2% of New Hampshire employment.

Policy Research Shop Regressivity Stanton E.A. "Emission Reduction, Interstate Equity, and the Price of Carbon" p. 27 Economics for Equity and Environment.

Policy Research Shop Policy Considerations Ways to Mitigate Regressivity Payroll tax – Equal dividends – Low -income energy efficiency assistance – Tax Reduction Alternatives Technology Investment- New Hampshire 10- year state energy plan

Policy Research Shop Political Considerations: Tax Rate and Base Carbon Tax Bundle Tax Rate: Price of carbon per ton Tax Base: Energy producers or energy consumers Revenue Depletion

Policy Research Shop Implementation Options Carbon Emissions Tax: a tax on producers Montgomery County, Maryland Germany The UK

Policy Research Shop Implementation Options Carbon Consumption Tax: Tax directly on consumers Boulder, Colorado San Francisco, Bay Area Denmark

Policy Research Shop Implementation Options Oregon—a New Hampshire peer: Reduction targets similar to New Hampshire’s Innovative climate policies

Policy Research Shop Conclusion Timely research A flat $5/ton tax would generate $95,000,000 if all carbon emissions were captured Choose goals; determine structure – Revenue generation or revenue neutrality Regressivity can be mitigated