TCI Regional Policy Design Stakeholder Submissions

Transportation & Climate Initiative Regional Policy Workgroup,

Thank you for the opportunity to comment on the “Framework for a Draft Regional Policy Proposal” released on October 1, 2019. We – the undersigned organizations – view the Transportation and Climate Initiative (TCI) as an important opportunity for regional collaboration on a pressing problem. We also believe that robust public input into both the regional and state decision-making process is essential to ensure an equitable policy design and the best program possible.

We face an existential crisis when it comes to climate change. Our collective greenhouse gas (GHG) emissions – largely from the combustion of fossil fuels and, in our region, largely coming from the transportation sector – are putting our economies, public health, and quality of life at great risk. Strategies that are carefully designed to reduce carbon pollution as swiftly as possible, in an equitable manner, are essential. TCI offers one of those opportunities. Getting it right, but getting it done, is essential. And, then we will need to do more.

Vermont is far from meeting its long-standing climate goals, with most of our GHG emissions increases coming from our most carbon-intensive sector: transportation. A strong program – including a strong cap – will be important to put Vermont and the region on track to start meeting our carbon pollution reduction commitments.

In these comments we offer some high-level input on our hopes for a strong program that could take our states, and our region collectively, one big step forward to reducing carbon pollution and, importantly, helping to create a cleaner, more diverse, more accessible 21st century transportation system. We appreciate the direction it appears TCI states are moving on several fronts and the opportunity to highlight some of the key characteristics we believe are essential to a strong, equitable program.

Thank you in advance for your consideration of this input and, more so, for your hard work to date – and the important work to come – to shape the design of a program that works for our planet and all people.

Equity
The prioritization of equity in the design of this program is key to its success, and we commend your recognition of it as a top priority. This program must – and, we believe, can – be designed to begin to dramatically reduce greenhouse gas emissions while also improving access, mobility, and public health for vulnerable and disproportionately impacted populations in particular. Ensuring this outcome will require an ongoing, inclusive, and strong public process, in particular for getting input on where any revenues would best be directed. Considering the differences among and within each state, utilizing potential TCI proceeds to address and prioritize equity, mobility, and access for more rural, low income, vulnerable and disproportionately impacted populations is essential.

In rural Vermont, transportation is a huge equity issue. It is a barrier to accessing and retaining a job and meeting basic needs such as getting to medical appointments, the grocery store and the pharmacy. The lack of transportation options leave many Vermonters isolated and alone, specifically the 1/3 of Vermonters who do not drive (this includes one in five adults over 65 years of age, people with a disability, children and those who choose not to drive). It is also a tremendous economic burden for low income households, where transportation accounts for approximately 50 percent of their energy bills. Strategies that serve a rural region well and enable Vermonters access to more clean, diverse transportation solutions are needed, and TCI revenues could serve as an important means to spur the investments required to make this transition.

Affected Fuels and Emissions
We support the TCI states’ proposal to cap carbon emissions from the combustion of motor gasoline and on-road diesel fuel in the region, as these fuels account for the vast majority of emissions from the transportation sector. We also urge that in the future other fossil fuels, such as Compressed Natural Gas (CNG), be considered for coverage as well, to avoid them being falsely viewed as a solution to transportation sector emissions.

Program Design: Auctions, Allocation, Regional Caps and Allowance Budgets
The Intergovernmental Panel on Climate Change (IPCC) has concluded that we have about a decade to substantially reduce emissions if we are to avoid the worst impacts of climate
disruption. As such, it is essential that states set a regional emissions cap at the outset of the program that is sufficiently ambitious to align both with states’ climate targets and with scientific imperatives. To ensure TCI serves as the strongest tool possible to reduce emissions, the cap should start low and drop as quickly as possible, in line with the latest climate science. Further, to achieve the GHG outcomes needed, states should also auction all allowances.

Investment of Proceeds
For the TCI program to succeed – and for states and the region to begin to reduce emissions in our most intensive sector – how revenues are invested is critical. Any TCI revenues must be reinvested in solutions that reduce pollution – as quickly as possible in the short term – as well as set the stage for avoided emissions in the long term, by giving people options for getting where they need to go by walking, biking, and taking transit, and well as the option to live in compact communities close to jobs, services, and amenities.

We believe parameters around the use of these proceeds are essential. These dollars should go to transportation-related solutions or solutions that reduce the need for transportation. TCI proceeds should not be spent to backfill budgets for roads, bridges, general funds, or, even, other needed climate solutions like weatherization or thermal fuel switching. We must find other means to meet these needs, but TCI proceeds should be harnessed to reduce carbon pollution from transportation and help to create a more connected, diverse, resilient, clean, and affordable transportation system.

Specifically, we believe any TCI revenues should prioritize low- and moderate-income and rural Vermonters without access to public transportation. The types of solutions we’d like to see prioritized include electrification of cars, buses, and bikes; transit; transportation demand management strategies like carpool, vanpool, and other creative ride-sharing techniques; safe walking and biking infrastructure; smart growth land use solutions; housing in downtowns and community centers and more.

We appreciate and support the flexibility envisioned for states to identify the best strategies and investments to meet their unique needs. We also hope to see in Vermont – but also potentially to help drive innovation more broadly – the ability for all states to spend some TCI proceeds to fund innovative pilots such as micro-transit, high-efficiency vehicle incentive programs (especially to serve low income earners), or other creative strategies that could drive reductions, enable access, and help to fill in the gaps where more traditional strategies might fall short. This includes enabling the flexibility for geo-targeted investment strategies that could serve specific regions well, considering that the best solutions for bigger cities and towns might not be the best or most-needed strategies to serve smaller communities and rural areas.

Complementary Policies
No one climate policy, including TCI, will accomplish all of the climate pollution reductions we need. We will need a diverse suite of significant, complementary policies to get the job done. We look forward to working with other TCI states, with diverse constituencies in Vermont and beyond and with policy makers to identify and advance that suite of other strategies to complement TCI, finally putting us on the path to meet science-based reduction targets we so desperately need to meet.

Conclusion
This regional effort presents the most promising opportunity at this time to tackle emissions reductions in our heavily carbon-intensive transportation sector. Shaping a strong program in line with the climate science, while also prioritizing strategies and solutions to serve low-income, rural, and disproportionately impacted communities is imperative.

As noted above, even a strong TCI will not be sufficient to do all that we must to reduce pollution. That is why we also strongly encourage you to design an equitable TCI program that could, one day, potentially link to other carbon markets – if that made sense. We know that reducing carbon pollution in our heating sector is also a climate imperative. The ability for a well-structured TCI program to link to successful programs like California and Quebec’s Western Climate Initiative would provide the flexibility for the region (or states in the region) to participate in this economy-wide market. We urge you to enable that kind of design and flexibility in the program.

Thank you again for your hard work, your ongoing commitment to designing a science-based, equitable, and flexible program, and for your consideration of our input.

Sincerely,

Audubon Vermont
Capstone Community Action
Transportation for Vermonters
Vermont Conservation Voters
VEIC
Vermont Natural Resources Council
Vermont Public Interest Research Group



CC:
Julie Moore, Secretary of the Agency of Natural Resources
Peter Walke, Deputy Secretary of the Agency of Natural Resources
Michelle Boomhauer, Director of Policy and Planning, Vermont Agency of Transportation
Curt McCormack, Chair, Vermont House Transportation Committee
Dick Mazza, Chair, Vermont Senate Transportation Committee
Vermont Senate President Pro Tempore Tim Ashe
Vermont Speaker of the House Mitzi Johnson

Please see the attached comments from The Nature Conservancy on the framework for a draft regional policy proposal.

I am deeply and gravely concerned over this petition. By limiting the amount people will drive you are affecting an entire industry and workforce on the available cars to work on after the industry has already sustained raising workforce costs. We as an industry cannot sustain being attacked on both angles by our own government who is supposed to help foster small business instead of kill it. I voted for a Republican Governor in my state to help protect me from these issues.

The initiative should be implemented on a multi-state basis while emphasizing principles of justice and funding for a decarbonized transit future. As such, any money raised through fees or taxes should be rebated directly to working class members or used to implement free public transit system repairs, electric car fuel infrastructure, new transit system implementation and subsidies for purchasing electric cars.

The funding could also help transition the operation of refining facilities and renewable generation as well as investment in public or common ownership of sustainable products and high-tech innovation. Alongside sustainable infrastructure development and building retrofits, we should be developing a low-carbon economy that features social care, high-speed public or social broadband, and remote-work initiatives.

At the heart of the project has to be an understanding that taxes or fees are not only inefficient means of driving innovation and development but can harm some of the most vulnerable. As such, we should move forward while acknowledging the reality of inequality and oligarchy control that have sparked riots and collective action in response to fossil fuel price and subsidy rises from Ecuador to France.

Thank you for your leadership in this crucial conversation to rethink our transportation system so it becomes sustainable, accessible, and equitable for all people. MassBike is Massachusetts' statewide bicycle advocacy organization, and we are encouraged by the potential that TCI brings to the development of much needed bicycle infrastructure on a regional scale.

Too often bicycle infrastructure is thought of as a side-note to greater roadway projects, many of which are only within municipal boundaries -- this is especially true in Massachusetts. However, by engaging TCI we will be able to expand the scale of how these projects are designed and implemented, which affords us the ability to bring safe, attractive, and convenient bicycle infrastructure to all people throughout the Commonwealth, and especially to marginalized communities which are largely left of bicycle infrastructure improvements. Considering that the bicycle is a truly sustainable form of transportation, we have the potential to dramatically impact our emissions and exponentially grow everyday bicycle riding, but only if we build modern, connected, and seamless bikeways.

MassBike encourages the TCI to be a tool for bicycling to be integrated with all modes, and we encourage you to not to separate bicycling funding from the greater conversations of transit, roadway & bridge redesign, and electric vehicle infrastructure. Transportation needs to be thought of with a multi-disciplinary approach, and the future of transportation will be in providing options so that people do not rely solely on one mode. A person will one day take the train and bus, on another day need to drive, and on another day choose to bicycle. Thus, bicycling needs to be part of every conversation, and the challenge will be to balance the development of as many sustainable and equitable modes of transportation as possible.

We need to plan for people to ride their bikes to transit hubs, to integrate electric vehicles and electric bicycle charging stations, to pursue the development of long-distance bikeways like the Mass Central Rail Trail and the East Coast Greenway, and more, in order to make everyday bicycling a feasible option for our citizenry.

We also encourage the TCI to promote safer modes of transportation, as part of "sustainability" will also be to develop modes that do not injure and kill people. Part of this conversation will be to utilize the framework of the Highway Safety Improvement Program (HSIP) and the Transportation Alternatives Program (TAP), but also to build on these programs to allocate greater support toward bicycling and walking safety improvements, and to recognize that by shifting transportation modes away from automobiles and toward active transportation we will promote sustainability and equity for more people. HSIP and TAP arguably provide the bare minimum of what is acceptable in highway funding toward safer bicycling and walking. The TCI should be a tool to do much better than these programs, and we should seek to make a true impact to develop connected infrastructure that incentivize people to get out of their automobiles and choose safe, sustainable, and active transportation.

As the conversation develops, we strongly encourage that the program works hard to make sure marginalized communities, environmental justice communities, and people typically note engaged in transportation funding conversations know about TCI and how they can participate in the program. Along these lines, MassBike would appreciate the opportunity to be a continued part of this conversation going forward, as we can engage our membership statewide to make a robust contribution to the program. We thank you for this opportunity to comment on the program as it is being conceived.

Sincerely,
Galen Mook
Executive Director
Massachusetts Bicycle Coalition (MassBike)
www.massbike.org

The world is facing a climate emergency. TCI has the potential to have a very large and beneficial impact in reducing GHG emissions from a highly populated region of the US. The Cap and Invest model is a proven and effective model to achieve these reductions but only if it’s done right. The cap must be set at a level that creates financial incentives to reduce emissions. In simple terms it means the price of carbon should be high. This will translate to higher fuel costs and incentivize use of lower carbon fuels. If the cost of carbon is high TCI will generate substantial funds to invest in GHG reductions. That basic framework is well thought out and sound.

However, TCI is based on the model of RGGI. A historical look at RGGI shows that it has not been nearly ambitious enough. RGGI has accomplished a lot but could have accomplished much more. The targets of TCI should be ambitious. The cap should be set aggressively low. As the US is pulling out of the Paris climate accord it is up to subnational jurisdictions like the TCI states to create policies that will lead to the emissions reductions we need to avoid the worst impacts of climate change. California has been aggressive about this for more than 10 years. New York recently passed S.6599 which has aggressive climate targets. Other TCI states should follow suit to be at least as aggressive.

My firm helps dairy farms with methane digesters generate revenue by selling environmental commodities like carbon offsets, RINs and LCFS credits. Over the past several years the price of carbon in California’s Low Carbon Fuel Standard (LCFS) has been ~$190/mtCO2e. Dairy digester projects that are connected to common carrier pipelines around the US can sell renewable natural gas into California’s LCFS market. This market provides substantial incentives to digester projects and many are being built to access this market. These projects provide a very low carbon fuel. By avoiding methane emissions that would otherwise be released to the atmosphere and turning that methane into RNG the projects create substantial climate benefits and can have co-benefits that help dairy farms improve water quality and nutrient utilization. In addition, RNG can be used in heavy duty vehicle fleets (trucks, buses, etc) for which electrification is not as viable as it is for passenger cars. TCI should provide incentives for methane digesters to produce renewable low carbon fuels in the TCI states.

At a recent TCI workshop state staff leading the TCI process said that they were considering biofuels but that they have limited resources, and developing TCI at all is “a very heavy lift”. TCI states should commit more employees to development of TCI. This is a prudent investment in the long term health and viability of the people and ecosystems of TCI states. State staff should not be stretched so thin that they cannot devote the time required to thoroughly develop such a necessary program. Of course the vast majority of TCI auction revenues should go to investments in the states, but states will also need staff to manage and implement the program. Speaking from 10+ years in carbon markets we encourage TCI states to make sure that their programs are well staffed with enough highly trained people. This is crucial to having the markets function well to achieve their goals.

Biomethane (aka RNG produced from methane digesters) is a unique form of biofuel. Unlike most ethanol and some forms of biodiesel it is produced from a waste and it’s production does not lead to land use change or impacts to the food supply. Biomethane is produced by dairy, swine and poultry farms of which there are many in TCI states. These segments of the livestock agriculture industry have a major impact on the rural communities (human and environmental) in TCI states. TCI’s model rule should provide specific incentives for production of biomethane from livestock manure. This would help achieve the necessary GHG reductions while supporting a growing industry in TCI states that provides economic benefits to the people and ecosystem service benefits to the environment in the TCI region.

NY S.6599 is an ambitious cap and trade program that will exclude “biofuels” but include livestock anaerobic digestion projects. Since TCI states are home to many dairy and other types of livestock farms they can support their communities and achieve GHG reductions by providing specific incentives for production of biomethane.

TCI can draw on the model of the US EPA Renewable Fuel Standard (RFS) or the California Low Carbon Fuel Standard to develop mechanisms to incentivize production of biomethane from livestock manure digesters. EPA and the California Air Resources Board (CARB) have worked through many of the complications of providing incentives for low carbon fuels including the life cycle accounting that is the global standard for GHG accounting of fuels. TCI doesn’t need to reinvent the wheel on these subjects. In addition, using “standard EPA emissions factors” to assess the impact of different fuels doesn’t sounds like it would allow individual producers to benefit from innovations in reducing emissions. The RFS has multiple “buckets” of RIN credits which allow the producers of the lowest carbon fuels to benefit in the market. CARB’s LCFS has simplified Tier 1 fuel pathways for efficiency, but also allows producers to apply for a Tier 2 pathway when they think their production process provides additional GHG benefits. Both models could be adopted by TCI.

Climate change is a pressing issue, and it makes sense for Maine to work with neighboring states through TCI’s bipartisan, proven policy model, to address contributing transportation factors in our region. The plan that states are developing can reduce pollution, expand public transportation, encourage use of electric cars, trucks and buses, and develop safe ways for people to walk and bike in small towns and rural areas through a clean transportation fund. We know this approach works because over the past 10 years, Northeastern states have done the same thing with the electric sector through RGGI. We created jobs, grew our economy, and reduced our pollution. Now, we have the same opportunity with TCI. The Maine Public Health Association supports this effort because Maine people deserve safe, clean, equitable, modern transportation solutions that are affordable, reliable, and reduce air pollution.

It's important that the policies we enact on climate change make sure that the big polluters pay the most money, and we need to ensure that we do everything we can to make sure that the people living in more rural areas (I know there are many in Vermont) are not dealt a horrendous blow in terms of rising costs they can't handle. Finally, we need to make sure that when we institute a cap that it's done to keep us on track to address climate change.

Having a number of north-eastern states work together to deal with Climate Change related to transportation sounds like an excellent idea. Infrastructure such as fast electric rail, park and rides, electric buses and other public options plus fast charging stations for electric cars and policies to help low income people switch to electric cars could all be implemented better if we co-operate together.