The New England Energy Summit kicked off the second of three virtual sessions last week with a U.S. senator touting carbon pricing and finished with a panel of energy experts from the public and private sectors.

Here is some of what we heard at the summit, organized by the New England Power Generators Association (NEPGA) and The Dupont Group.

Whitehouse Touts Carbon Pricing, Slams Big Tech

U.S. Sen. Sheldon Whitehouse (D-R.I.) has delivered hundreds of speeches from the Senate floor on climate change since 2012. He wasted little time in his keynote delving into an issue that has become a cause célèbre in New England: carbon pricing.

“I think carbon pricing is a pretty essential component of any rational analysis in the energy sector, and it has particular importance when you consider the climate peril that we face, particularly along the coastlines. Representing the Ocean State, I’m keenly aware of that,” Whitehouse said.

Whitehouse — who was campaigning in Georgia ahead of the Jan. 5 twin runoff races that will determine which party controls the Senate next year — said there is an “imbalance in the energy sector” in the form of a massive subsidy for fossil fuels. Whitehouse cited the International Monetary Fund reporting the yearly subsidy for fossil fuels in the U.S. is $600 billion.

“If you have one fuel that has a $600 billion annual advantage over its competitors, you have baked in a very bad distortion into the marketplace, and the obvious way to fix that is with a carbon price that counterbalances some, or all, of that subsidy until the market can work.”

Whitehouse said a carbon price is “far from dead” in Congress. He said it is the “leading strategy” on the Republican side, and there are four separate Democratic carbon pricing bills, “so this is not some fringe idea.”

Whitehouse added that Big Tech companies, such as Google, Apple, Microsoft and Facebook, “are not showing up in Congress to ask for climate legislation.” Instead, TechNet, the lobbying group for the companies, came to Capitol Hill with a 13-page list of legislative priorities and no mention of climate change or green energy, he said.

“There has to be a general awareness that American corporations are a wall in Congress,” Whitehouse said. He said that President-elect Joe Biden would rally corporate support and “call out those faint hearts that say one thing but do something very different in Congress, which is basically everybody.”

Closer to home, Whitehouse addressed a question about the pushback from some states about increasing prices in the Regional Greenhouse Gas Initiative (RGGI) and expanding its use as a carbon-reduction tool. He said governors and state legislators face an interesting choice on RGGI.

“At the moment, RGGI has been run in a very comfortable way for everybody … and it may be that the pressure from the inevitability of some real climate damage empowers some of the states that are leaning forward a little bit more on this to really press the states that are expressing skepticism to either get on board or get out,” Whitehouse said. “The stakes are so high, [but] I think a certain amount of that depends on what the signals from Washington look like. If it seems like Washington is coming together and starting to agree on a significant climate bill, that will take the pressure off RGGI, and in fact, the main question [then] becomes, ‘How does RGGI fit into this?’

“So [to be determined] is the way I would answer that question. But should we fail in Washington, and let’s say we don’t succeed in Georgia, Democrats [would] have a minority in the Senate, [and Senate Majority Leader] Mitch McConnell [R-Ky.] blocks any and all serious carbon legislation. But I think the pressure grows in RGGI to actually do something meaningful and not to be held back by the least ambitious member.”

‘Enormous Strides’ Toward Decarbonization

Whereas Whitehouse touted carbon pricing as a “pretty essential component,” Matthew Nelson, chair of the Massachusetts Department of Public Utilities, said his state has already embraced it through adopting RGGI — a cap-and-trade program — and now pushing the Transportation Climate Initiative (TCI).

“It’s not that we’re speaking from a place where we’re not for carbon pricing,” Nelson said. “But I think the key here is, what type of carbon pricing? FERC-jurisdictional, electric-sector-only carbon pricing has its drawbacks.”

Melissa Hoffer, energy and environment bureau chief in the Massachusetts Attorney General’s Office, said there have been “enormous strides in the decarbonization world.”

“What’s unique about what has occurred this year is you see it now being driven more by fiduciary concerns about the long-term viability of fossil fuel investments,” Hoffer said. “So while we still hear the moral argument motivating those decisions, we are also now hearing, ‘This is just not a good and stable investment for our assets over the long term.’”

Hoffer cited a report by Goldman Sachs that renewables will be the largest area of spending in the energy industry overall in 2021, surpassing upstream oil and gas for the first time in history. Goldman turned this into an implied carbon price of about $40 to $80/ton for new hydrocarbon developments.

Paul Hibbard, principal at Analysis Group, said the “real risk” is that the resource-specific policies and investments made in the present “could look outdated in a relatively short time, and it affects everyone in the economy.”

“Ultimately, all of our energy infrastructure has potential reliability implications, and you only need to think about a declining use of the natural gas infrastructure in the region and the impact that might have on the reliability,” Hibbard said.

Jennifer Benson, president of the Alliance for Business Leadership and a former Massachusetts state representative, said that she was committed to “writing and fighting for a revenue-positive carbon pricing bill.”

“My bill would raise hundreds of millions of dollars per year to fund resiliency and infrastructure by putting 30% of the carbon fees collected into a green infrastructure fund that could range from $300 million at $20/ton of carbon to $600 million at a $40/ton price,” Benson said. Massachusetts is “borrowing billions to pay for resiliency and renewable energy infrastructure, and that is straining our finances.”

“Imagine if the funding mechanism for these critical projects was built into our energy systems and tied directly to the cause of these problems,” Benson said. “Carbon pricing is a simple, elegant, market-based solution that has been proven to work in countries and regions with comparable demographics and economies to ours here in Massachusetts.”