From ecoRI News (ecori.org)

The regional collaboration known as the Transportation & Climate Initiative (TCI) will be operating, at least initially, with a smaller cast than expected.

Governors from Rhode Island, Massachusetts and Connecticut, as well the District of Columbia’s mayor, signed an agreement Dec. 21 to launch an effort to address the climate crisis. This cap-and-invest system is designed to reduce climate emissions by raising money from the wholesale distribution of gasoline and diesel fuel and investing the proceeds in electric-vehicle infrastructure and other initiatives that make up the so-called “green transportation economy.”

TCI is composed of 13 East Coast states and the District of Columbia, but only the three states and the nation’s capital signed the recent memorandum of understanding to establish the revenue-generating system. Most other TCI member states had previously signed a separate letter expressing support for the program. Maine and New Hampshire didn’t sign on to that earlier letter. All TCI members can adopt the cap-and-invest program at any time.

During an online press call, no explanation was offered as to why the other states aren’t joining the pact. Representatives from the three states and the District of Columbia instead described how the anticipated reduction in climate emissions, along with the economic growth they expect, will entice states to eventually participate.

“This is a strong group moving forward in a committed way,” said Kathleen Theoharides, secretary of the Massachusetts Executive Office of Energy and Environmental Affairs. “And we believe the future is bright and that if you build it they will come.”

Katie Scharf Dykes, commissioner of the Connecticut Department of Energy & Environmental Protection, predicted that TCI will increase state participation, as did another cap-and-invest program that generates revenue from power-plant emissions, the Regional Greenhouse Gas Initiative.

“I’m confident that we will see more jurisdictions joining us,” Scharf Dykes said.

If local approvals are met, TCI is scheduled to launch in 2022 with a one-year trial reporting period that will track emissions for each state and the District of Columbia. Fossil-fuel distributors won’t have to buy the pollution allowances until 2023, when they are required for exceeding a monthly emission limit, or cap. The limit is reduced each year until 2032, when it will be 30 percent lower than the initial cap.

During the recent press call, representatives from the three states and District of Columbia touted the benefits of investing some $3.2 billion over nine years in electric buses, electric-vehicle charging infrastructure, and new bicycle lanes, walking trails, and sidewalks.

Some $3.2 billion will be invested in low-carbon transit projects in four regions over nine years. (TCI)

“Massachusetts, Connecticut, Rhode Island and D.C. are committing to bold action to achieve our ambitious emission-reduction targets while positioning the jurisdictions and the region to grow our clean transportation economy,” Theoharides said.

The auction of the allowances is expected to raise about $300 million annually. Rhode Island anticipates receiving about $20 million a year. As part of the program, at least 35 percent of the proceeds must be invested in environmental-justice communities. Spending in these frontline communities is expected to create jobs, reduce air pollution, and improve public health.

If fuel distributors pass the cost on to consumers, the expense is expected to add between 5 and 9 cents to a gallon of fuel.

The program’s requirement for equity investment is intended to address the regressive nature of the higher fuel costs by investing in communities suffering from excessive air pollution. Statewide equity advisory boards comprised mostly of members from these communities will recommend where and how the TCI funding is spent.

“Most importantly, (TCI) will provide much-needed relief for the urban communities who suffer lifelong health problems as a result of dirty air,” Rhode Island Gov. Gina Raimondo wrote in a prepared statement.

The program is expected to reduce greenhouse-gas emissions from the transportation sector by some 26 percent over nine years. Transportation accounts for 42 percent of all emissions among the signors, the largest source of emissions in those areas.

The announcement comes a year after TCI was expected to launch. TCI representatives blamed the delay on the heath crisis and an unfriendly White House administration. Public perception was also a likely cause for delay. Opposition to TCI from conservative news outlets and radio talk-show hosts has persisted.

Rhode Island acknowledged at a meeting in 2019 that TCI will take more than a government directive to succeed.

“If we’re going to win hearts and minds, it’s not just people at the Statehouse,” said Carol Grant, then director of the Rhode Island Office of Energy Resources. “We have to kind of win people over generally to the importance of this.”

Back then, environmental groups criticized TCI for not advancing stronger reductions in emissions. Reaction to the recent announcement from the same environmental community has been positive. Support for the TCI program has been expressed by Save The Bay, Acadia Center, and the Northeast Clean Energy Council.

A new president committed to taking on climate change improved the prospects for enacting the TCI program, according to coalition members.

“With a change in administration, policies are going to be a lot more stable,” said Terrence Gray, deputy director for environmental protection at the Rhode Island Department of Environmental Management (DEM).

Janet Coit, DEM’s executive director and the state’s representative during the online announcement, noted that states with Republican and Democratic governors are TCI members.

“After so much divisiveness, it’s really great to see bipartisan regional effort leading on climate change,” Coit said.

The public response to the program will likely determine the willingness of other states to join. A recent poll conducted by Yale University and George Mason University among voters in TCI states and the District of Columbia found that 41 percent said they strongly support participation in the initiative. Another 31 percent said they would somewhat support participation. Rhode Island had the highest support at 61 percent. Maine was the lowest at 56 percent. Politically, 84 percent of Democrats favored joining TCI, while 49 percent of Republican favored joining the initiative.

Public perception starts with messaging. The revenue mechanism is often referred to by opponents as a “gas tax” or fee paid by consumers. But it has several distinctions, according to the renewable-energy advocacy group Acadia Center.

First, some fuel-distribution companies may choose to internalize part or all of the allowance costs to gain a competitive advantage rather than pass it on to gas-station customers. And since TCI is based on the carbon content of a fuel, suppliers will be able to sell fuels with lower carbon contents and pay less in carbon pollution fees, according to Acadia Center.

“This program is about delivering benefits to consumers with a transition in fuels and mobility options over time,” said Hank Webster, staff attorney and Rhode Island director for Acadia Center.

TCI will have a minimal impact, if any, on fuel prices, Webster said, because the program is designed to keep that impact at or below 5 cents if regional fuel suppliers choose to pass the costs on to their customers.

“To put that in context, you can save 5 cents per gallon at some stations by using their frequent customer program, or 10 cents per gallon by setting up a direct debit from your checking account,” he said.

Rhode Island and Connecticut require legislative approval to launch the TCI program. Massachusetts can advance the program through its executive office.

Raimondo is expected to launch the legislative process this spring, with public input beginning in January.

Tim Faulkner is a journalist with ecoRI News.