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How Would Lamont’s Environmental Proposals Affect Businesses?

  • Governor Ned Lamont proposes a set of environmental proposals to the Connecticut legislature
  • One controversial measure seeks to reduce auto-related greenhouse gas emissions but would also likely increase prices at the pump
  • Connecticut Green Bank would expand in scope and have the ability to invest in numerous environmental initiatives

A set of legislative proposals introduced by Governor Ned Lamont would expand opportunities for businesses to make investments in environmental and sustainability upgrades, but would also likely lead to higher costs associated with company travel.

Lamont is proposing action to mitigate climate change and improve home energy affordability, a bill to reduce carbon emissions related to transportation, and an act to help Connecticut adapt to climate change. Many of the proposals are based on the short-term recommendations of the Governor’s Council on Climate Change, which delivered a report in January.

One of the more controversial measures is the Transportation and Climate Initiative Program, a which Lamont has signed onto but which requires legislative approval to be enacted. Together with Massachusetts and Rhode Island, this program caps carbon dioxide emissions from gasoline and on-road diesel and requires wholesale fuel suppliers to purchase “allowances” at auction to cover these fuel emissions. The proceeds would then be reinvested into transportation projects aimed at reducing carbon emissions, such as improved public transit and electric vehicle charging infrastructure.

The initiative is projected to reduce Connecticut’s greenhouse gas emissions by 26 percent between 2023 and 2032, but is also anticipated to raise gasoline prices by five cents per gallon starting in 2023 if wholesalers pass on the cost of the allowance to consumers. The program has built-in measures such as a cost containment reserve to limit price increases once they reach nine cents per gallon.

The measure has received pushback from trade groups such as the trucking industry and gasoline retailers, who also question Lamont’s promise of limited price increases. These groups contend that fuel prices may rise as much as 37 cents per gallon, with diesel wholesalers potentially having to pay $80 million more each year.

Another measure would expand the scope of the Connecticut Green Bank, which currently focuses on clean energy and efficiency. Lamont’s proposal would allow the entity to support investments in water, waste and recycling, climate adaptation and resilience, agriculture, land conservation, parks and recreation, and environmental markets. The Connecticut Green Bank would also be permitted to pursue federal funding and use its bonding authority to make its own investments and attract private investments in such initiatives.

The legislation sets a goal of a carbon-free electricity grid by 2040, saying that pursuing this effort will also generate new clean energy jobs. It would allow the Department of Energy and Environmental Protection to procure up to 300,000 megawatt-hours of electricity, or about 1 percent of Connecticut’s load, from demand and response and energy efficiency measures. This strategy seeks to save consumers money while also improving the grid’s reliability as it incorporates more intermittent sources of green energy, such as solar and wind.

Other proposals include a requirement that property owners provide prospective buyers or tenants with information on a property’s energy bills and several measures to expand the ability of municipal authorities to take action on land conservation, climate resilience activities, and other environmental initiatives.

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