View Public Input on TCI-P

The proposed Transportation Climate Initiative (TCI) Model Rule is unlikely to reduce carbon dioxide emissions from motor vehicles by a targeted 66 million tons a year by 2032. In fact, using real-world examples from California, the Rule may have no impact at all on emissions. It is clear, however, that gasoline and diesel fuel prices will rise under the Model Rule. Fuel distributors must buy emission allowances under the Model Rule, and the cost will be passed onto consumers at the pump. TCI’s Model Rule is actually a regressive tax costing all families about the same. TCI will cost each family thousands of dollars over the next decade, and those in poverty are least able to absorb those costs. In addition, the Model Rule establishes a fixed budget of available allowances by year (pg. 44) and fuel can’t be delivered without an allowance. If TCI estimates of program success are wrong, and fuel demand doesn’t fall as expected, needed fuel can’t be delivered. TCI could plunge the region into motor fuel shortages and 1970’s style lines at the pump.

The Model Rule also moves motor fuel taxing authority from states to a non-governmental regional authority. We believe that ceding authority in this way is always a bad idea. Unlike traditional gasoline taxes, the revenue raised from allowance auctions will not go to maintaining and building highways in the local area. TCI plans to spend most of the money raised subsidizing electric vehicles, public transportation, and walking and biking trails. Electric vehicles weigh an extra thousand pounds, which adds more strain on highways, but pay no tax toward highway trust funds. States will have to raise gas taxes to make up for this revenue shortfall.

TCI claims 35% of funds will be spent on projects to bring more equity for low income communities (pg. 41), but the Model Rule is short on specifics. Urban areas already rely on public transportation. Subways and trains already run on electricity. Much of the nation’s bus fleet has already been transitioned from diesel to lower emitting natural gas and propane1. Replacing buses with electric versions that cost two to three times as much provides little additional value. Plans to add walking and biking trails in urban areas will likely find recreational use, but are unlikely to reduce commuting travel, especially in cold, wet weather.

The Model Rule establishes target emission allowance prices where allowances will be added or removed from the auction to control the auction price (pgs. 9-10). That is an engineered exercise to manipulate the price of emission allowances rather than a market-rate auction. TCI forecasts an average price that would add 11 cents to a gallon of gasoline in 2022, rising to 27 cents by 2032. TCI’s own worst case estimate pegs a surcharge as high as 41 cents2. At a minimum, TCI will cost a typical household $2,000 over the next decade, or about $187 a year3. The worst case scenario could cost households $414 in 2032, and total $4,550 by 2032. Low income rural families will be hurt the most, and the Model Rule offers no relief for those families.

Adding to the economic injustice, much of the money raised from the emission allowances will be used for subsidies for electric vehicles. Many studies show that electric vehicles are often bought by wealthy individuals for access to High Occupancy Vehicle lanes as a single occupant. The national Renewable Energy Laboratory estimates 86% of EVs are bought by people making over $60,000 a year4. TCI money will also be given as subsidies for public and private electric vehicle charging stations so those wealthy families can recharge their vehicles anywhere. Since over 80% of charging occurs overnight at home4, utilities are offering lower electric rates after 8 PM saving these wealthier families even more money.

TCI documents2 target a 6% reduction in emissions from an expected 2022 forecast level of 253 million tons, or 15 million tons per year emission savings by 2032 for twelve states and the District of Columbia. An emission allowance budget is established for each state. In the appendix of the September, 2020 TCI webinar a study by ICF International indicates only 11.8 million tons will be saved annually and that is partially offset by increased emission of 3.7 million tons from increased electric generation to power the increased number of electric vehicles. The actual emissions savings may only be 8 million tons per year, or 3%.

TCI is partially counting on higher prices to discourage driving, but travel necessity makes fuel use inelastic. A study by the U.S. Energy Information Agency5 found motor fuel prices would need to increase 25 to 50 percent to reduce driving by 1 percent, or to about $3.72/gallon in today’s dollars. The Model Rule forecasts a maximum price of 27 cent/per gallon which might only reduce emissions by about 0.2%, or 0.5 million tons.

Another flawed TCI assumption is a planned $4,000 subsidy per electric vehicle against a premium purchase price of $12,000 will stimulate sales by 10 million vehicles by 20322. This will use up to 80% of the expected emissions allowance auction revenue. TCI’s assumption does not connect with actual experience. Currently, there is a more generous federal subsidy of $7,500 per vehicle which has only stimulated sales of about 300,000 vehicles a year6. This translates to 3 million vehicles over ten years, for a CO2 reduction of about 2 to 5 million tons a year by 2032.

Considering the low impact of higher fuel prices on the miles people drive, and likely lower electric vehicle sales than forecasted, direct emission savings from TCI might only be about 2.5 to 5.5 million tons per year, a fraction of the 15 million ton forecast.

The big TCI forecast savings, 51 million tons, is supposed to come from federal programs for higher mile per gallon standards and alternative fuels. The US Energy Information Agency released its 2021 Annual Energy Outlook and only expects a 4% reduction in petroleum based transportation emissions between 2022 and 2032 equaling only a 10 million ton reduction in the TCI region by 20327.

In addition, transportation emissions in the TCI region in 2018 were 347 million tons so reaching the 2022 target of 253 million tons would require a 27% reduction, or 94 million tons8. Between 2012 and 2018 emissions actually increased 9.5% as miles per gallon improvement was eclipsed by more miles traveled, and more vehicles on the road. It is unlikely the TCI region will meet the starting goal of 253 million tons by 2022.

Taking into account a higher emission starting point in 2022 and a slower contribution to emission reductions from federal programs by 2032, we believe the expected 51 million ton 2032 TCI target is a pipe dream. Based on TCI’s own documents it is actually possible there will be zero emissions reductions by 2032 even if all the regional target jurisdictions adopt TCI. Yet the number of allowances allowing fuel delivery will be reduced in lockstep with the TCI plan which assumes the 66 million ton TCI forecast reduction. The imbalance in available allowances compared to actual demand could lead to massive shortages of motor fuel.

In conclusion, TCI will likely fail to significantly reduce carbon dioxide emissions from motor fuels, but will raise fuel prices hurting the poor the most, while leaving states short of highway trust funds, and out of the loop in controlling taxes. Worst case, the plan may result in fuel shortages leading to panic and long lines at the pump. This is a bad idea for Maryland and Delaware.

As a Ph.D. Physicist I am technically aware of the burdensome cost and technically ineffectiveness of the Transportation Climate Initiative (TCI.)
Virginia should not join the TCI because the people of Virginia can not afford the burdens the TCI would impose.

I am strongly opposed to Virginia joining the TCI. This would increase gas taxes in order to pay for unfair corporate welfare handouts for favored industries. It's not responsible public policy, and the citizens of Virginia should not be forced to pay for corporate welfare, especially as our economy struggles to recover after Covid-19.

We enthusiastically support the adoption of TCI-P by Virginia and other states in the region. TCI-P is a win-win proposition that will improve air quality and people's health while generating revenue to help participating states speed the transition to a clean-energy economy. And it will help us leave a livable environmental to our grandchildren and theirs. Transportation is the biggest source of greenhouse gas emissions in Virginia and the region, and the source of dangerous particulates that exacerbate health problems like asthma, especially for those near major roads, which often include lower income and minority communities. To solve these problems we need to move to a clean transportation system and a clean-energy economy, and TCI-P will greatly help Virginia and the region do this. For its immediate air-quality and health benefits, and its enduring climate benefits, we strongly urge the prompt adoption of TCI-P throughout the Mid-Atlantic and New England region. The time to act is now.

I support a strong TCIP- Model Rule. The burden climate change places on our communities is steadily worsening. Action to reduce greenhouse gas emissions is needed now; we cannot delay any longer. Additionally, communities are suffering from particulate emissions, with negative health effects on all of us but dis-proportionally impacting lower income and minority communities most often located near major roads.

Transportation is the biggest source of greenhouse gas emissions in Virginia and the region, as well as dangerous particulates. We can best tackle both of these problems by moving to a clean transportation system, and a clean-energy economy. TCI-P will greatly help Virginia and the region do this. It will improve air quality, lower health care costs and reduce greenhouse gas emissions. It will also generate revenue for other environmental initiatives to further accelerate our progress.

The Transportation and Climate Initiative (TCI) aims to reduce carbon emissions in the transportation sector by establishing a "cap and invest program to decrease air pollutions and generate revenues toward a clean economy. Transportation is the biggest source of gas emissions in Virginia and has the greatest impact on poor and minority communities.
Acting now will improve our air quality, lower health care costs, reduce gas emissions and generate revenue for environmental initiatives.
John A. "Jack" Calhoun, co-leaders, Lewinsville Faith in Action

I would like to see an emphasis on electric vehicles and more power stations as we get closer to 2030. This should be extended to public transportation of all kinds, including paratransit.

I call for the TCI-P Model Rule to include (1) a minimum investment amount to ensure overburdened and underserved communities in Virginia receive a greater-then-proportional share of investments from the program, (2) integration of air quality commitments across Virginia, and (3) robust empowerment of Virginia's Equity Advisory Body. Thank you for your consideration of this important issue for our future generations.