Cost concerns echoing as climate bill advances

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BOSTON (SHNS) – As major climate policy legislation wends its way through the Legislature and back to the governor’s desk, budget-minded groups are raising questions about what the quest for net-zero greenhouse gas emissions by 2050 could cost the state and its residents.

Cost has been part of the debate around the climate bill since Gov. Charlie Baker vetoed it in January and said the Legislature’s 2030 emissions reduction target would cost $6 billion more than his preferred target and that the bill would make building new housing cost-prohibitive.

The House is expected to debate and pass the latest version of the bill Thursday.

After the Senate incorporated some of Baker’s proposed amendments and doubled down on legislative priorities Monday, the Massachusetts Fiscal Alliance pointed out on Twitter that the “[m]ajor legislation that will impact every property owner don’t get a debate on ‘costs’ as the State Senate quickly moves it along.”

The issue of cost did come up briefly during the debate, though it was discussed in a very broad sense and not in terms of dollars and cents.

“There is no mandate, anywhere in this bill, imposed on the individual homeowner,” Sen. Michael Barrett, one of the chief climate bill sponsors and negotiators, said Monday after Minority Leader Bruce Tarr raised the issue of cost.

Part of the emissions reduction strategy envisioned in the bill and the Baker administration’s climate policy is to wring efficiencies out of the building and transportation realms by making it more financially and technically possible for residents to switch to more efficient means of home heating, to buy an electric vehicle when their gas-powered models need to be replaced, and to make other changes that could have a meaningful impact at scale.

The utility-run MassSave energy efficiency program is one of the most visible and accessible ways for homeowners and businesses to tackle efficiency projects and could become an even more instrumental part of the state’s efforts if the climate bill passes.

While climate concerns have grown in Massachusetts during recent years, Barrett said important entities like MassSave “somehow seemed somewhat unaware that they were potentially playing pivotal roles in offering a solution.”

Rather than just detailing the ratepayer savings expected under each of its required three-year plans — the plan approved in 2019 estimated it would provide about $8.5 billion in savings by using about $2.7 billion from ratepayers — the bill would require the executive branch to set emissions reduction goals at the outset of each three-year plan and have the Department of Public Utilities assess whether those goals were met by the end of the three years.

“So the secretary sets an emissions reduction goal. That has to be reflected prominently in the three-year plan that’s actually reduced. At the end of the process, the DPU is going to come back and tell the public and the Legislature whether the secretary’s three-year goal for MassSave was achieved or not,” Barrett said. “The idea is to align all these efforts in a reasonably tight way to ensure that we get to where we know we need to go.”

The senator also pointed out that the details of those three-year plans and exactly how they propose to reduce greenhouse gas emissions will be subject to public hearings and the influence of whoever is running the executive branch at the time, suggesting that costs could become clearer with each three-year plan. The plan for 2022, 2023 and 2024 is under development now and is expected to be filed with the DPU by Oct. 31.

“We’re all going to be part of a much more focused conversation about how the heck we’re going to get the job done,” Barrett said.

Barrett also pointed out that participation in the MassSave program is entirely voluntary.

“There is no cost imposed on the public, and for that matter, there is no cost imposed on the building owner, the homeowner, unless he or she is interested in making an improvement in her home,” he said.

In anticipation of Thursday’s House debate, the New England Gas Workers Alliance said Wednesday that it is urging representatives to strip the climate bill of language “approved by the Senate that would cost jobs, push up the price of housing and potentially kill construction work in communities around the state,” referring to the proposed creation of an opt-in municipal stretch energy code that cities and towns could choose to adopt to require new construction to be “net-zero.”

“Our workers join with the real estate industry, utilities and other labor unions in strongly objecting to new regulations allowing cities and towns to stop all fossil fuel connections to new construction. Eight Massachusetts communities with some of the most expensive housing in the country have already said they will move forward with such bans if the Legislature passes the Senate version of the bill,” the alliance of union gas workers said, adding that the bill also includes “good common sense steps” to address climate change. “This would not only drive up the cost of housing, it would put monthly utility bills out of the reach of many working families.”

Before Baker vetoed the climate bill in January, he said he had “gotten a lot of incoming from a lot of folks who are in the building and home construction business who have said that certain pieces of this bill … literally may just stop in its tracks any housing development in the commonwealth.” Supporters of the stretch energy code say it would not impact projects already under development.

Baker highlighted that provision as an issue when he vetoed the bill and in February proposed amendments that his energy and environment chief said would provide some clarity around how the code would focus on things like having a tight building envelope “without necessarily doing some of the things folks were worried about with a net-zero code, which might include prescribing solar panels on all buildings or requiring buildings not be connected to gas.”

The Senate rejected that amendment Monday and the latest version of the bill would direct the Department of Energy Resources to create a new specialized code that includes both net-zero building performance standards and the definition of a net-zero building.

Also this week, the Beacon Hill Institute for Public Policy Research said its analysis showed that the emissions reductions approach called for in the bill “would increase costs to the average Massachusetts household to unacceptable levels.”

The report focused largely on an alternative appraoch that is not in the climate bill: a carbon tax, which the conservative think tank said “assures that emission reductions will be accomplished at the lowest possible social cost.”

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