Connecticut has signed on to a ground-breaking plan that will help dramatically lower greenhouse gas and other emissions from transportation and at the same time bring badly needed revenue to the state’s transportation system — and the under-served communities that are disproportionately affected by the impacts of climate change.
Connecticut will join Massachusetts, Rhode Island and the District of Columbia as the first jurisdictions to commit to the carbon-cutting concept known as the Transportation and Climate Initiative and a final two-year push toward implementing a plan to cut greenhouse gas emissions from the transportation sector, the way the Regional Greenhouse Gas Initiative, known as RGGI, has done for the power sector.
It took 11 years and a relentless slog of working groups, webinars, listening sessions, workshops, memorandums of understanding and other initiatives.
Like RGGI, TCI is a cap-and-invest program and will bring revenue into the state – an estimated $89 million in 2023, increasing to as much as $117 million in 2032. Across all four jurisdictions, the program is expected to bring in $288 million in 2023 alone. In 10 years, that number is expected to reach $380 million a year, and greenhouse gas emissions should be down by 26%, a hefty dent in the reductions the state committed to through its Global Warming Solutions Act.
Much of the money will go towards transportation initiatives, which in turn create jobs, tax revenue and some of the economic growth the state needs. It also adds a stream to the underfunded transportation fund.
TCI is designed to lower emissions by incentivizing drivers off the road and investment in cleaner forms of transportation. The transportation sector accounts for 40% of greenhouse gas emissions in the state – the most of any sector.
There are more than a few initial hurdles, though.
The final details of the plan aren’t set yet, and legislative action will be required to help do that.
Another is that, without careful formulation, the economic impacts of any plan could be felt most acutely by people least able to withstand them – namely, lower-income and vulnerable individuals who are also facing the most profound economic impacts from the pandemic.
Most of the 13 states that had been part of the TCI process, from Maine to North Carolina, which just joined today, plus the District of Columbia – have not moved to the next phase yet, though they provided a letter of support for today’s action. Connecticut, Massachusetts and Rhode Island account for 73% of transportation emissions, 76% of the vehicles and more than 80% of the GDP of New England.
Katie Dykes, commissioner of the Department of Energy and Environmental Protection, whose agency will be responsible for pulling together the final pieces, called the commitment “historic and important.”
“We’ve been talking about this for a very long time – and now we’re doing it,” she said. “It’s a huge down-payment on the future for our kids, of cleaner air and addressing climate change.”
She pointed out that reducing transportation emissions lowers not just the carbon that contributes to climate change but also standard pollutants that have plagued the state resulting in high asthma rates and other environmental health issues. The transportation sector accounts for 67% of such pollutants.
TCI is often called RGGI for transportation. While the underlying principle is the same – you have to pay if you want to pollute – TCI quickly veers into a far larger impact field.
In RGGI, for the right to pollute above a set cap that goes down over time, power plant owners buy emission allowances from their states through quarterly auctions. The states get the money, most of which is supposed to be invested in consumer benefits such as energy efficiency programs that help lower energy use further.
While ratepayers do pick up a tiny amount of the costs of pollution, with a few hundred plants in the entire region, it’s easy to spread that cost so it’s unnoticeable.
In the regional structure that is TCI’s underpinning, the payment to pollute will be on the large suppliers of transportation fuels – gasoline and on-road diesel — at the wholesale level. While that cost will be passed along to consumers, it will be included in the price of the fuel, not as a tax at the pump.
But the fuel industry has typically labeled it a tax as part of its opposition to TCI, which could cut into their business. Chris Herb, president of the Connecticut Energy Marketers Association, in a statement called it a money grab, not an environmental initiative. “This would put another tax, on top of another tax, on top of another tax, on top of another tax — on one of the most highly taxed commodities in the state,” he said.
How that system is designed, and how compliance is monitored, is a to-be-determined component for each state.
But the biggest to-be-determined task for each state – and arguably the most dramatic part of TCI — is the environmental justice and equity component. The regional structure requires that at least 35% of each state’s auction proceeds be re-invested in the over-burdened and under-served communities that typically suffer disproportionately from the impacts of climate change and pollution and often have the most limited, and frequently the dirtiest, transportation options. That can often mean an old car that uses a lot of gas, which means the owner will pay more than someone who has a newer, more efficient one.
Such inequities theoretically will be addressed in the plans each state designs.
“It’s incredibly important for the transportation sector that equity is at the forefront of these investment decisions,” Dykes said. “I’m really pleased about this part of the program.”
Each state will have to figure out how to consider the economic, environmental equity and justice issues, weigh the differences between urban areas with large mass transit systems (at least in non-pandemic times) and rural areas where driving is the only way to get around, and then figure out how to help those areas with the TCI proceeds.
To that end, an equity advisory committee will be appointed.
‘It’s taken much too long’
Tony Cherolis, the Transport Hartford coordinator for the Center for Latino Progress, has heard a number of ideas for how to spend the money. Among them: improvements to public transit from better schedules and expanded routes to low- and no-emission systems, along with safer routes for walking and biking in cities. In Hartford, he said, 30% of households don’t even own cars.
“Finally,” Cherolis said to the news that Connecticut would be moving forward with TCI.
“It’s taken much too long to do these things. Every year we waste, we fail to maintain a survivable planet and a stable civil society.”
He said the equity and environmental justice perspective of TCI will usher in a significant shift in how the Department of Transportation and the state do things. His worry: “If the DOT sees this as a piggy bank to just pay for transit so they don’t have to think about it anymore.”
Even though public transit usage provides the broadest swipe at cutting transportation emissions, he and others said that some consideration needs to be made for those people who need cars but own older, less efficient ones.
He cited the Cash for Clunkers program that is part of California’s cap-and-trade program, to help low-income people trade up to electric or more efficient vehicles.
Other ideas include subsidies to low-income people for purchasing such vehicles or rebates based on formulas around vehicle miles traveled.
The equity advisory group may also have to wrangle with whether that 35% reinvestment minimum is too low.
“While we know that there are some who feel this isn’t enough of a commitment for these communities, we’re not going to say it’s fine,” said Amy McLean, who runs the Connecticut office of Acadia Center, the New England and New York environmental advocacy group that has pushed for TCI for years. “We do know that this commitment is a good starting point.”
“The most important thing about this effort,” she said, “is that it’s actually moving forward.”
But she cautioned that TCI is not a silver bullet and the other efforts the state has been making towards cleaner transportation – electric vehicle adoption especially, which has been slow and difficult – have to continue.
“All of these policies need to move forward at the same time,” she said.
Kenneth Gillingham, who specializes in environmental and energy economics across three departments at Yale University and who served in the Obama White House, said he couldn’t say if the 35% would be enough.
“It’s really all about what should be achieved,” he said. “It might not be enough at all.”
“I think we want to mitigate the worst impacts to individuals in the communities that are going to be hit the hardest.”
His suggestion for how to do that: Make sure to recognize who’s really being affected and by how much; consider urban areas as well as those low income people in rural areas; improve mass transit in urban areas; devise policies to address the unique needs of rural areas; and consider the value of establishing income thresholds in policy design to improve social justice outcomes.
The next steps for the state involve the legislature and the governor’s two-year budget. The legislature needs to authorize the DEEP to enact regulations. Dykes said the aim is to start quarterly auctions in the first quarter of 2023 – a little over two years from now. The governor also needs to include the money that comes in from TCI on the revenue side of his budget.
As for how to avoid the recurring problem with RGGI of the state taking some of the funds to plug budget holes, Dykes said she believed the constitutional lockbox will protect TCI funds from any sweep.
“Connecticut is going to look different,” she said. “Buses quietly humming along, not spewing out diesel.”
“It makes me very optimistic for the future of our state.”