3 states, D.C. agree to cap automobile emissions

Source: By Maxine Joselow, E&E News reporter • Posted: Tuesday, December 22, 2020

Three states and the District of Columbia yesterday reached a historic agreement to cap planet-warming emissions from cars.

The memorandum of understanding among Massachusetts, Connecticut, Rhode Island and Washington marks a milestone in the yearslong process of launching the Transportation and Climate Initiative Program, a proposed cap-and-invest system for cars in the Northeast and mid-Atlantic.

Advocates hailed the agreement as a watershed moment in state climate policy, noting that transportation accounts for more than 40% of greenhouse gas emissions in the region.

But a host of other states refrained from joining the agreement yesterday, pointing to the political difficulties facing the program backers.

TCI-P would set a cap on carbon emissions from the transportation sector in the participating jurisdictions starting in 2022. The cap would get lower each year through 2032.

Fuel suppliers would be required to purchase credits to cover their carbon pollution, with the proceeds invested in clean transportation projects such as public transit improvements, walking and biking infrastructure, and electric vehicle charging stations.

“We are thrilled today to announce what we believe is the most significant step states have taken together to address climate change and public health in many years,” TCI-P Chair Kathleen Theoharides said on a Zoom call with reporters yesterday.

The program is expected to curb emissions by up to 26% by 2032, generating more than $3 billion in investments, said Theoharides, who is also secretary of the Massachusetts Executive Office of Energy and Environmental Affairs.

Massachusetts Gov. Charlie Baker was the lone Republican to sign the agreement. The Democratic backers were Govs. Ned Lamont of Connecticut and Gina Raimondo of Rhode Island and Mayor Muriel Bowser of Washington.

Missing states

Absent from the agreement were nine other states that had participated in planning discussions for the program: Delaware, Maine, Maryland, New Hampshire, New Jersey, New York, Pennsylvania, Vermont and Virginia.

Vermont Gov. Phil Scott (R) had previously voiced reservations about the idea, while New Hampshire Gov. Chris Sununu (R) withdrew from the planning discussions in December 2019, saying the program would have inflated gasoline prices in the Granite State (Greenwire, Dec. 18, 2019).

Katie Dykes, commissioner of the Connecticut Department of Energy and Environmental Protection, acknowledged that the program could cause a modest increase in gasoline prices if fuel suppliers pass on compliance costs to consumers.

“Our modeling estimates show a potential increase of around 5 cents per gallon, which is far less than regular fluctuations that customers see in retail fuel prices,” Dykes said on the call with reporters yesterday.

Eight other states — Delaware, Maryland, New Jersey, New York, North Carolina, Pennsylvania, Vermont and Virginia — released a statementyesterday signaling plans to continue working with Massachusetts, Connecticut, Rhode Island and Washington on curbing emissions.

Janet Coit, director of the Rhode Island Department of Environmental Management, said she expects more states to sign the agreement in the coming months.

Coit noted that more states have joined the Regional Greenhouse Gas Initiative, a cap-and-invest program for power plants in the Northeast, since it took effect in 2009. Pennsylvania is set to join in 2022 despite the Republican Legislature’s efforts to thwart the move (Energywire, Sept. 16).

Asked for comment, New York State Department of Environmental Conservation spokeswoman Erica Ringewald said in an email to E&E News: “New York’s statutorily appointed Climate Action Council has been working to develop a holistic plan in line with the Climate Leadership and Community Protection Act aimed at reducing emissions in all sectors.”

Ringewald added: “While the Transportation and Climate Initiative-Program is one potential tool for helping us achieve our goals, to make a commitment of this nature before the Council’s work is complete would be premature.”

Equity concerns

Environmental justice advocates previously raised equity concerns about the program, saying it could concentrate pollution in low-income neighborhoods and communities of color (Climatewire, Oct. 8).

In response, the agreement requires states to devote at least 35% of proceeds from the auction of carbon credits to “overburdened and underserved communities.”

Dykes, of the Connecticut Department of Energy and Environmental Protection, said the requirement was a floor rather than a ceiling.

“I want to emphasize that 35% is a minimum. There is nothing to prevent the participating jurisdictions from going higher,” she said.

Theoharides, the TCI-P chair, noted that a recent study led by Harvard University’s T.H. Chan School of Public Health found the program could prevent up to 1,000 deaths from air pollution annually.

“We know that local air pollution that disproportionately affects communities of color and low-income communities also makes COVID-19 outcomes worse,” Theoharides said.

Still, many environmental justice advocates object to the basic premise of cap-and-trade programs, saying they make it cheaper for companies to continue polluting in front-line communities.

In California, which implemented an economywide cap-and-trade program in 2015, the evidence is mixed.

A 2018 study led by the University of California, Berkeley, and San Francisco State University found that some low-income communities and communities of color had seen increased emissions during the period of the program’s use.

But a May working paper from the National Bureau of Economic Research found the program had reduced emissions evenly across all communities.

Reaction

Several environmental groups cheered yesterday’s development, although at least one group trumpeted its opposition to the program.

“Thank you to the governors of Massachusetts, Rhode Island and Connecticut, and the mayor of Washington, D.C. for leading the way to zero-carbon transportation,” Morgan Folger, director of the zero-carbon campaign at Environment America, said in a statement.

“TCI-P can help provide a better future for our children and grandchildren with better transportation options that rely on clean energy,” she added.

But Jim Walsh, senior energy policy analyst at Food & Water Watch, said the group continues to oppose market-based mechanisms for reducing emissions.

“The philosophy behind TCI — essentially, to let the market regulate pollution — has led to increases in pollution in environmental justice communities. These cap and trade programs put the costs on working people while allowing polluters to continue with business as usual,” Walsh said in a statement.

“And they are simply ineffective when it comes to their main goal: Reducing the emissions that are driving the climate crisis,” he continued. “We need a more effective, holistic approach when it comes to reducing transportation emissions, not a band-aid on a gaping wound.”