An East Coast Cap-and-Invest Approach to Reducing Transportation Emissions

Nine Mid-Atlantic and Northeast states and the District of Columbia have agreed to work together to develop a policy to price emissions from transportation, set a 'cap' on them, and invest the revenues in low carbon transportation solutions.
December 20, 2018, 1pm PST | Irvin Dawid
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Sean Pavone

Connecticut, Delaware, Maryland, Massachusetts, New Jersey, Pennsylvania, Rhode Island, Vermont, Virginia, and District of Columbia belong to the Transportation and Climate Initiative (TCI)a regional collaboration that formed in 2010 to improve transportation, develop the clean energy economy and reduce carbon emissions from the transportation sector, the largest source of emissions in most of these states as well as the nation.

According to the initiative statement [pdf] signed Dec. 18, "the participating TCI jurisdictions will design a regional low-carbon transportation policy proposal that would cap and reduce carbon emissions from the combustion of transportation fuels through a cap-and-invest program or other pricing mechanism, and allow each TCI jurisdiction to invest proceeds from the program into low-carbon and more resilient transportation infrastructure."

The participating TCI jurisdictions plan to complete the policy development process within one year, after which each jurisdiction will decide whether to adopt and implement the policy

Fuel distributors in the nine states and D.C. will be required "to buy pollution permits [or allowances] for some of the carbon they produce," writes David Abel, environmental reporter for the Globe

"We estimate that at modest allowance prices that would cost the average driver $6 per month, the program could bring approximately $3.5 billion into the region for clean transportation investments," writes Ken Kimmel, president of the Union of Concerned Scientists.

While there are a number of policies in place to lower transportation emissions (fuel economy standards for cars and trucks, incentives and mandates for electric cars, and investments in public transit), transportation sector emissions are expected to stay flat, and may even rise.

Why? Among other things, we are missing two key pieces: 1) a legally binding mechanism to force overall emissions down; and 2) a revenue source to fund the transition to cleaner transportation.

"If approved, the agreement would be modeled after the Regional Greenhouse Gas Initiative, a nine-state regional “cap-and-invest” system for power plant emissions known as RGGI," adds Abel.

Widely seen as a national model, the mandatory market-based program has helped reduce power plant emissions from Maryland to Maine by about 40 percent below 2005 levels without raising average electricity prices.

All but Pennsylvania, New Jersey, Virginia and D.C. are RGGI members, though Gov. Tom Murphy (D-N.J.) announced on Monday that "the Department of Environmental Protection has formally proposed two rules that will steer New Jersey’s re-entry into the Regional Greenhouse Gas Initiative."

RGGI members New Hampshire, New York, and Maine have not signed, although New York and Maine are expected to. It is unclear why New York has not signed yet, but Maine is expected to join the coalition after its newly elected governor, Janet Mills, takes office next month.

Fuel allowance revenues would be spent for a variety of low carbon transportation programs that would be selected by each jurisdiction, "including public transit, carpooling and driverless car services, subsidies to accelerate the adoption of electric vehicles, and new bike lanes," notes Abel. 

TCI is facilitated by the nonpartisan Georgetown Climate Center, part of Georgetown Law.

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Published on Tuesday, December 18, 2018 in The Boston Globe
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