Fuel Providers at Core of Multi-State Plan to Cut Transportation Emissions


The coalition of eastern states developing a program to drive down carbon emissions from transportation has decided to focus on motor gasoline and on-road diesel, two sources of pollution that account for over 80 percent of carbon emissions in the region.

The states are also eyeing a 10-year horizon for the program that will include a cap on emissions from both sources of motor fuel that begins in early 2022 and ratchets down every year through 2032, according to state energy officials and advocates. The program could generate hundreds of millions of dollars per year for transportation agencies.

The Transportation Climate Initiative, which is a multi-state coalition working to build a program to reduce carbon pollution from the transportation sector, released a draft framework of the program Tuesday.

The framework is the first in a series of steps that the coalition has mapped out in hopes of getting states to sign on to an agreement by spring 2020. An emissions cap is still being negotiated, making it too soon to estimate how much revenue the state will take in and how much more consumers could expect to pay at the pump.

New Hampshire is part of the 12-state consortium that is negotiating the program. The states currently involved cover the sprawling urban mega-region that runs along the East Coast: Connecticut, Delaware, Maine, Maryland, Massachusetts, Connecticut, New Jersey, New York, Pennsylvania, Rhode Island, Vermont and Virginia. Washington, D.C. is also part of the coalition.

Modeled on the Regional Greenhouse Gas Initiative that targeted emissions from power plants, TCI states are focused on developing a cap-and-invest program to drive down emissions from cars and trucks and facilitate the transition to a low-carbon transportation system.

State fuel suppliers who transport fuel across state lines will be the entities to hold and trade emission allowances based on cap levels that still must be set. There are hundreds of these suppliers across the 13 TCI jurisdictions.

While states are still studying and negotiating where to set the emission cap, the intention of the states is for the cap to decline every year. The proposed cap will be announced as part of a draft memorandum of understanding in December.

Where the cap is set and how fast it declines will signal how aggressive states want to be in reducing emissions and how much money will be generated from the sale of allowances for states to invest in low-carbon transportation options and how much more consumers will end up paying for gas.

The Massachusetts chapter of the National Federation of Independent Business in a tweet pointed to a study that found a similar cap-and-trade program in California targeting refinery emissions added 13 to 14 cents to a gallon of gas.

“One of the two most significant remaining questions is what is that cap level and will it really be aligned with the climate crisis we’re facing because we are running out of time to take significant action,” said Jordan Stutt, carbon programs director at the Acadia Center. “We don’t have any more time for baby steps.”

Stutt said the framework moves the TCI states in a “very positive direction.”

The coalition plans to seek feedback over the coming months on the framework as it finalizes a draft MOU to be released in December, which will also include more details on state-based programs to spend TCI funds.

There will be additional time for public input before a final MOU is produced by spring for states to sign, and states that need legislative approval to participate can pursue that as the formal rulemaking process begins.