Honolulu Star-Advertiser

Saturday, December 14, 2024 74° Today's Paper


Column: Carbon cashback is a win-win for Hawaii

The Honolulu Star-Advertiser reported on a recent study that evaluated 1,500 climate policies designed to reduce planet-warming greenhouse gas emissions. The study identified successful policies that should be duplicated again and again, along with many policies that were found to have had minimal effects.

The study identified putting a price on pollution as being effective when acting alone. It was the only policy in the study that, when combined with others, improved the effectiveness of the other policies as well. Thus, it is the only policy in the study with a synergistic effect.

A price on pollution can help Hawaii achieve its greenhouse gas emissions goals. In 2018, Hawaii became a national climate leader when it set a 2045 goal of sequestering more greenhouse gases than it emits. Inspired by Hawaii, 24 states followed with their greenhouse gas reduction or clean energy goals.

To ensure that Hawaii’s net negative emissions goal is achieved, Hawaii set an intermediate goal: by 2030, the greenhouse gas emissions level of 2005 must be reduced by 50%. However, current efforts to achieve the 2030 goal are insufficient.

In 2021, the latest year for which total emissions data are available, emissions were 55% above the 2030 goal. Since then, the relatively large fossil fuel component of total emissions has increased, so total emissions have also undoubtedly increased. Emissions are currently at record highs and are growing instead of decreasing.

Putting a price on pollution effectively reduces emissions, and there are two ways to do that.

The first is the emissions trading system (ETS), where the government limits the emissions of certain industries, and each polluter is limited to a certain allowance. Affected polluters may buy and sell their allowances among themselves. ETS is typically used where energy-intensive industries are substantial. Since Hawaii has almost none of these industries, ETS is not appropriate for Hawaii.

The second way to put a price on pollution is the carbon fee, which is a fee on fossil fuels. The fee flows through the economy, nudging households and businesses to reduce their consumption of fossil fuel either by conserving energy, shifting to clean energy, shifting to commodities made with cleaner energy, or a combination of the three.

A carbon fee is the key component of carbon cashback, a bill introduced in the state Legislature over the past few years. The policy includes a gradually increasing fee on fossil fuels.

The bill also included an innovative climate rebate. Funded by the carbon fee, the climate rebate would start small, rise for 15 years, and then decline as fossil fuel consumption declines. The climate rebate would be the same for everyone (dependents would get half a share) in any particular year and would be available to all Hawaii residents as a refundable tax credit.

The carbon fee would also pay for the administrative costs of the program.

A University of Hawaii study determined how families would be impacted financially. The study calculated increases in prices of goods and services resulting from the price on pollution. The study concluded that the climate rebate would more than cover the amount that most families would spend as a result of increased prices.

Most of Hawaii’s families would enjoy a net financial gain. This is because the 10 million tourists who visit Hawaii annually would pay the carbon fee and contribute to the climate rebate but would not receive it. The climate rebate for a family of two adults and two children would be $1,800 after 10 years.

Carbon cashback is the only bill that will give families a climate rebate while substantially reducing greenhouse gas emissions.


Helen Cox is co-lead of the Kauai chapter of the Citizens Climate Lobby (CCL); Liza Kukharuk is a senior at ʻIolani School and leader of the CCL Youth Action Team; Noel Morin is a CCL state coordinator.


Correction: An earlier version of this column incorrectly implied that a price on pollution is the only effective policy among those studied. The study actually indicated that it was the only policy that was synergistic — when combined with other policies, it increased their effectiveness.
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