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A wide-ranging bill that contained multiple initiatives to combat climate change had its substance yanked by the Appropriations Committee on April 22, after concerns about the potential price tag.
This year, Democrats hoped to pass climate change legislation, after a similar effort failed in 2023. They packed the bill with financial incentives for businesses in an effort to gain private-sector support.
State Rep. Christine Palm (D-Chester), vice chair of the Environment Committee, said last year’s bill failed because of the perception that it was too punitive to businesses.
“This year, we’re adding business incentives to quell the voices (that say) ‘to be environmental is inherently anathema to being a good businessperson,’” Palm said.
The Connecticut Business & Industry Association (CBIA), which opposed prior climate change legislation, supported two sections of the bill and remained neutral on the rest. Palm hoped CBIA’s partial support — and lack of opposition — gave the bill momentum.
House Speaker Matt Ritter (D-Hartford) even said House Bill 5004 was one of the top three House priorities this session.
But the various incentives in the bill — and its overall potential price tag — may have sweetened the pot too much.
On April 22, the Appropriations Committee, led by Democrats, stripped down the bill by removing every provision that would add costs to the state budget.
The Appropriations Committee approved a substitute bill, which starts by declaring a “climate crisis” and recognizes the need to enact meaningful legislation to decrease greenhouse gas emissions. While it retains some of the original bill, specific provisions aimed at pushing the state toward more stringent emissions reduction targets were removed.
The substitute bill retains a provision that would require the Department of Economic and Community Development (DECD) to give preference to sustainable businesses that apply to the state’s JobsCT tax rebate program, which is one of Connecticut’s most important business incentive programs.
The JobsCT program gives companies in specified industries rebates against their insurance premiums, corporation business and pass-through entity taxes for reaching certain job-creation targets.
Palm said the tax credits are meant to create an incentive for businesses “to pivot to a sustainable model.”
The substitute bill, which still needs approval by the House and Senate, also retains a requirement that the Department of Revenue Services identify business fees that could be waived for environmentally sustainable certified B Corporations and farms.
B Corporations are for-profit businesses that have been certified by the group B Lab as demonstrating high social and environmental performance, and meeting other socially-conscious goals.
By Jan. 1, 2025, the DRS commissioner would be required to submit to the General Assembly a list of fees that could be waived.
The bill also requires the Department of Energy & Environmental Protection (DEEP) to work with the Connecticut Green Bank to develop a plan to install at least 310,000 residential heat pumps. They must submit a status report to the General Assembly by Jan. 1, 2026.
The bill further requires the Office of Policy and Management and Department of Administrative Services to develop a model policy for environmentally sustainable purchasing that municipalities may voluntarily utilize and implement, by Oct. 1, 2024.
Overall, it’s less ambitious than the original bill that Palm championed and the Environment Committee approved.
The original bill set new greenhouse gas emission reduction levels for state agencies, and for the state as a whole. They were removed in the substitute bill.
Palm said she’s confident that, during budget negotiations, aspects of the bill that were removed will be restored.
The legislative session ends on May 8.
“My job is to defend this bill and fight for it to still have teeth,” Palm said. “That’s what I’m doing.”
The Yankee Institute, a conservative think tank, called the original bill a “Green Monster” that would place additional costs on state government and businesses.
The bill required state agencies to reduce greenhouse gas emissions by 45% from 2001 levels by 2030, 75% from 2016 levels by 2040, and to achieve net-zero by 2050.
Statewide, the bill required greenhouse gas emissions levels 65% below 2001 levels by 2040. It also required the state to achieve economy-wide net-zero emissions by 2050.
The bill did not address how much it would cost to achieve those targets.
An Office of Fiscal Analysis note on the bill said it would result in a significant cost increase to ratepayers, requiring major investments in the electrical grid and electrical generation to achieve the targets.
Also, the Appropriations Committee removed a provision giving PURA the ability to expand its statewide energy storage program by increasing its cumulative storage deployment targets from 580 MW to 1,000 MW, and to increase the size of its incentives.
Battery storage is seen as an essential part of the clean energy transition, as it improves grid resiliency by allowing electricity generated by offshore wind and solar to be stored until it is needed by the electric grid.
The CBIA voiced support for the battery storage provision.
While the stripped-down bill doesn’t go as far as proponents had hoped, many supporters say sustainable practices can benefit businesses.
An increasing number of businesses are developing environmentally conscious missions, partly due to the profit incentive, said Heather Burns, founder and CEO of the CT Sustainable Business Council, a proponent of the climate change bill.
“Often, it is the business voices that are opposed to change that are the loudest, but there’s an increasing number of profitable companies that are reaping the economic benefits, operational efficiencies and competitive advantage that result from sustainable business practices,” Burns said.
Not only do business owners want to spend their money in sustainable ways, consumers are increasingly choosing to spend their money on products made by companies that embrace sustainability, she said.
Heather Terry, CEO of GoodSam Foods, a sustainable food distributor, was one business owner who favored the original climate change bill.
The Greenwich resident said she grew up as a Republican, and now leans liberal, but believes sustainability is a bipartisan issue because it benefits the greater good.
“We know as a company, a small company, that we can indeed become profitable, create a business that thrives, supports the state, supports our country and supports the world,” Terry said. “Things like B Corps, sustainability and ESG (environmental, social and governance) are not partisan issues. They are bipartisan issues. They’re human issues, and they serve business.”
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