Eleven Northeast states plus the District of Columbia on December 17th released a draft memorandum of understanding this week on how to implement their Transportation and Climate Initiative (or TCI). The draft memo lays out a framework for creating a “cap-and-invest” system to cut greenhouse gas emissions from the transportation sector. The plan is to create a tax on carbon dioxide emissions from motor fuels. TCI would thus complement the northeast’s Regional Greenhouse Gas Initiative (RGGI).
A coalition of state and national free-market groups countered by releasing a joint letter opposing TCI. As Vermont’s Ethan Allen Institute noted in their press release on the letter: “The hit to Vermont drivers could be as high as an extra 18 cents per gallon for gasoline and diesel, and that’s just to start. The added cost to motor fuels would increase every year with the intent of making it so economically painful to use these fuels customers will be compelled to abandon them – whether or not viable alternatives exist as replacements. This is a cruel policy.”
Whether New Hampshire Governor Chris Sununu read the joint letter or not, he came to the same conclusion. Soon after the TCI memo was released, Gov. Sununu tweeted that his state would not be participating. He wrote that he “will not force Granite Staters to pay more for their gas just to subsidize other states’ crumbling infrastructure.”
According to Smart Cities Dive: “TCI would set a regional cap on the amount of gasoline and diesel emissions allowed, and that number would decrease each year. The cap level will not be announced until the final plan is revealed, but TCI’s stated intent is to reduce emissions by up to 25%. The proceeds from auctioning pollution allowances to ‘polluters’—estimated at up to $7 billion annually—would be invested into clean transportation options such as public transit or zero-emission vehicles.”
TCI will accept public comment on the draft memo until February 28th, 2020. It is expected that a final version of the memo will be produced in the spring. States will then be asked to join the program, which could take effect as early as 2022.