On February 6, 2025, the Hawaii House of Representatives introduced HB760, a significant legislative bill aimed at enhancing the state's environmental response and addressing climate change through a revised taxation framework. The bill seeks to expand the existing environmental response, energy, and food security tax, renaming it the environmental response, energy, carbon emissions, and food security tax. This change reflects a broader commitment to reducing greenhouse gas emissions and promoting sustainable practices across the state.

The primary purpose of HB760 is to implement a carbon emissions tax, which is designed to tax fossil fuels based on their carbon emissions. This approach aligns with recommendations from a study commissioned by the state energy office and conducted by the University of Hawaii Economic Research Organization (UHERO). The study concluded that a carbon tax and dividend policy would significantly reduce fossil fuel consumption while providing net financial benefits to most households, particularly lower-income families.

Key provisions of the bill include a gradual increase in the carbon emissions tax over a ten-year period, starting at a lower rate to mitigate immediate price shocks. The tax will be adjusted annually for inflation after reaching a specified rate, ensuring a sustainable approach to emissions reduction. Additionally, part of the tax revenue will fund a public awareness campaign to educate residents about the program and its benefits.

Notably, the bill also reinstates the agricultural development and food security special fund, which was previously repealed during the COVID-19 pandemic budget crisis. The legislature emphasizes the importance of agriculture and food security for Hawaii's future, asserting that the state is now in a more stable financial position to support these initiatives.

While HB760 has garnered support from various stakeholders, it has also sparked debates regarding its potential economic implications. Critics express concerns about the impact of increased fuel costs on consumers and businesses, while proponents argue that the long-term environmental benefits and financial dividends will outweigh these initial challenges.

As the bill progresses through the legislative process, its implications for Hawaii's economy, environment, and social equity will be closely monitored. If passed, HB760 could position Hawaii as a leader in carbon pricing and climate action, setting a precedent for other states to follow. The next steps will involve committee reviews and potential amendments as lawmakers seek to balance environmental goals with economic realities.