Tailpipe and exhaust

The Transportation and Climate Initiative, TCI, is an underwhelming name for what could become a groundbreaking model to cut transportation-generated greenhouse gas emissions.

Its formation is in progress in the Northeast as something of a companion to the Regional Greenhouse Gas Initiative, RGGI, which is itself groundbreaking as the first regional greenhouse gas emissions cap and invest program in the U.S. But RGGI – universally pronounced “Reggie” – only covers power plants in those 10 northeastern states where it has been operating. (New Jersey had been a Reggie state until then-Governor Chris Christie pulled it out of the effort; Democratic Governor Phil Murphy has taken steps to re-enter, and final action on that effort is likely soon.)

Transportation emissions of course are more pervasive than those from just power plants, and in fact constitute the largest source of CO2 emissions nationally, and nearly half of those in the RGGI states.

“When you look at the success the states have had with RGGI in the electric sector, in some way it’s an obvious leap to get to the point where you say, ‘We should have a similar policy for the transportation sector,'” says Jordan Stutt, a Boston-based policy analyst for Acadia Center, an advocacy group in New England and New York that has watch-dogged RGGI since its formation.

Transportation emissions tough to ‘wrangle’

But it’s a lot more challenging to create a program around transportation emissions. The TCI states – the RGGI states, which run from Maine to Maryland, plus Pennsylvania and the District of Columbia – have been talking about how to do it for nearly a decade, and they still have a long way to go to come up with what essentially would be a RGGI for transportation.

Northeastern progress in cutting transportation CO2 emissions is seen as groundbreaking model. Click To Tweet

“It’s a hard sector to wrangle,” Stutt acknowledges.

California offers the only U.S. blueprint with a cap-and-trade program for all emissions. But even without the complications of coordinating among a dozen governments, transportation posed the greatest challenges.

Under RGGI, the couple of hundred power plants in the region essentially pay for the right to pollute based on how much carbon dioxide they emit. Plant owners buy allowances from the states through quarterly auctions. Consumers do pick up the cost of those allowances on their electric bills. It’s not much, and it’s barely noticeable to most ratepayers.

Since RGGI began operating in January 2009, power plant CO2 emissions have dropped by more than half, and nearly $3 billion has been returned to the states. Much, if not most, of that money has gone into state energy efficiency and clean energy programs as required through RGGI’s reinvestment framework.

But transportation is massively diverse with people traveling from state to state. Socio-economic levels vary widely, and state political leaderships shift. All of which is a lot harder to standardize across a dozen jurisdictions than is the case involving power plants that just sit there and whose emissions are more easily measured.

To Kathleen Theoharides, assistant secretary of climate change in Massachusetts, the key challenge of transportation is “the amorphous nature of it and millions of people making millions of small decisions daily, and also the need for most people to get in a car each morning and drive somewhere.”

Regional cooperation necessary

That said – the states involved recognize that the only logical way to pull a program together is to do so regionally.

“It’s something that I don’t think one state could convene by themselves without a group like TCI,” Theoharides says.

A top still-unanswered question is where to put the meter for the carbon cap. Obviously gauging the emissions of every vehicle would be unwieldy and costly, if not impossible. The consensus is to have the fewest number of measurements.

The Georgetown Climate Center, which has been the facilitator of the TCI process, in its 2017 Transportation Fuel System Considerations report, listed some possibilities.

Gaining traction is its option of putting the carbon charge on the so-called prime supplier – that is, the entity that brings fuel into the area. For the TCI region, almost all the fuel comes from out-of-state.

Equity considerations

But that charge will be passed to consumers at the gas pump and through fares for transit modes using gasoline. And that in turn shifts the problem to one of equity – how to compensate consumers adequately and proportionately for transportation use over which they may little control … and do so without subsidizing unwanted behavior. So policy makers need to take into account rural areas lacking public transit; the needs of low-income drivers unable to afford more fuel-efficient cars; and making sure the program doesn’t just provide electric vehicle incentives for wealthy drivers.

James Bushnell, a professor of economics at the University of California-Davis, says he saw it all play out in California’s development of its transportation emissions program: Central Valley residents and politicians lobbied for additional compensation because they had few choices beyond their own cars and trucks.

“There are lots of ways to try to offset the impacts on average for individuals without necessarily subsidizing their incentives to drive,” Bushnell says. “The key is you want to find somebody who is hurt by the increase in charges, but you don’t want to insulate them completely. So you want their income to reflect the benefits of this charge, but you don’t want to give them an incentive to drive more.”

Bruce Ho, who follows the RGGI and the TCI process for the nonprofit Natural Resources Defense Council (NRDC) says finding that equity line is complex.

“State decisions about how they will use any revenues from the program will be extremely important in insuring the distributional impacts of a program are not overcoming the benefits,” Ho says, and that means investing in solutions that get people out of their cars.

Key among the re-investment ideas so far is that the states get to mostly call their own shots, the way they do in RGGI – probably the biggest lesson TCI is drawing from RGGI itself.

States like New York and Massachusetts – each with large mass transit systems in their major city and large rural areas where long distance driving is unavoidable – could set up systems tailored to those extremes. Washington, D.C., entirely urban but with wide wealth disparity among its residents, might choose to reinvest in mass transit and still figure out a way to deal with daily commuters traveling in and out from perhaps four different states – Maryland, Virginia, West Virginia, and Delaware.

“When Metro has to cut back night-time service, that really makes it challenging for shift workers and others who rely on affordable transportation in order to be able to get to their jobs,” says Kate Johnson, chief of the green building and climate branch of D.C.’s Department of Energy and Environment. “You can’t really separate the environmental benefits of having a very robust alternative transportation system from the real economic and equity implications.”

Other ideas include providing direct rebates based on some formula for vehicle miles traveled, or enhanced subsidies for low-income people to purchase more efficient, perhaps even electric, vehicles. TCI advocates point also to a need to address community planning to make it easier for walkers and bikers. That approach may mean using the revenue from a program not for transportation directly but for things like housing and economic development to create jobs closer to home.

Another important factor: States say TCI needs to dovetail with existing state initiatives.

Needed: Regional path forward

The biggest lesson states say they are carrying over from RGGI is just how to work together more effectively.

“We have these interlocking systems in the Northeast, both the power system and the transportation system, so it makes sense to work together,” says New York deputy commissioner of air resources Jared Snyder. “Another lesson from RGGI is the way a well-designed policy can provide a suite of benefits – economic benefits, environmental benefits, public health benefits. We are trying to determine how to achieve those kind of benefits in the transportation sector as well.”

Maryland Secretary of Environment Ben Grumbles cautions, however, that togetherness goes only so far when you’re essentially talking about a carbon tax. “This is a topic that can also become very political and very controversial,” Grumbes says. “Every state that’s involved in a regional collaboration for environmental progress wants to make sure that as the state is demonstrating leadership, the state is not somehow weakening its economic competitiveness.”

TCI has progressed slowly – a reality not lost on those who have watched it grind along since it was first proposed in 2010. But it appears now to be moving into a new phase – public engagement in the form of listening sessions outlined in November 2017 in a joint statement by eight of the TCI states.

“Because of the complex nature of transportation, it’s just not the kind of decision that states are going to make in a room together,” cautions Theoharides of Massachusetts, which has already held four listening sessions on its own. “This is a challenge that really requires a lot of public engagement – a lot of education, a lot of outreach, and a lot of taking the pulse of where Massachusetts residents are.”

Challenges persist … optimism prevails

On top of the snail’s pace of progress, the initiative faces guaranteed political changes with some of the region’s sitting governors not running for re-election in November.

“The politics of this aren’t easy,” says Daniel Gatti, a policy analyst with the nonprofit Union of Concerned Scientists (UCS) clean vehicles program focusing on the Northeast. “I feel like there is some recent momentum here.”

But Gatti, like others, worries that TCI could still wind up being talked to death.

Vicki Arroyo, executive director of the Georgetown Climate Center, is more optimistic. “I don’t see any signs that this effort is slowing down; I really think that the momentum has picked up,” she says.

Over at Acadia Center – which has watched these processes play out since RGGI was first proposed in 2005 – Stutt says he thinks things are going pretty much as he had expected.

“A successful launch here will depend on making sure people living in these states understand what’s at stake …. If there’s not a sense of the benefits, it might be tough to drive a lot of support here. But clearly this program would come with myriad benefits, so it’s just a question of making sure that those benefits are communicated.”

Topics: Policy & Politics, Transportation