TCI Regional Policy Design Stakeholder Submissions

Reducing reliance on individual passenger vehicles is of paramount importance, and we need far greater investment in high-quality public transit.

On behalf of the Advanced Energy Economy Institute and its affiliate in New York State, the Alliance for Clean Energy New York, we are writing to express our general support for the Framework for a Draft Regional Policy Proposal that was released on October 1.

Before commenting on individual components of the framework, we would like to underscore the importance, timeliness, and wisdom of a multi-state initiative to tackle greenhouse gas emissions from the transport sector. In New York, the recent passage of the Climate Leadership and Community Protection Action demonstrates that New Yorkers are ready for action on climate change, including measures addressing transportation. In contrast to the electricity sector, emissions from transportation are on the rise and are making up a larger and larger percentage of state and regional greenhouse gas emissions. Therefore, it is imperative that states take quick action to cap and gradually reduce these emissions.

Further, just like our states are connected by numerous roads and railways, our policies should be coordinated among states whenever possible, to maximize the beneficial impact and minimize unintended consequences. For this reason, we fully support the initiative for multiple states to work together to align policies.

Some further points:
-- We agree that equity is an important consideration of the Framework for a Draft Regional Policy Proposal. Including this perspective from the outset will lead to a stronger and more sustainable program.

-- At the present time, we believe it is correct to have the program apply to wholesale motor vehicle fuels that are delivered for use into a TCI jurisdiction or removed from storage in a TCI jurisdiction. This scope tackles an important emissions sector in a way that is efficient, targeted, and defined. It is appropriate to tackle the transportation sector independently. The electricity sector is already covered by RGGI and a suite of complementary policies, and the building heating sector, which does need to be addressed more affirmatively, will need a different set of complementary policies than the transportation sector. Further, the alternatives for the transportation sector are commercially available and ready to be phased in over time.

-- The emissions reporting, monitoring, and verification components of the framework also make sense; it is important to include these design elements early in the process.

-- Inclusion of a gradually declining cap is critical to the success of the program. It sends a clear market signal that can stimulate private investment in research, development, and deployment, which will lead to lower costs.

-- Finally, the reinvestment of proceeds is an absolutely critical component of this framework. Proceeds should be reinvested by states into transit and vehicle electrification. The importance of a long-term and enduring dedicated funding source for these initiatives cannot be overstated. It has been crucial to the success and progress on the electricity side in New York and elsewhere, and it needs to be created and maintained for the transportation sector as well.

Thank you for the opportunity to submit these comments in support of the Transportation Climate Initiative Framework for a Draft Regional Policy Proposal. We look forward to TCI continuing to request and reflect public comments as this regional policy evolves.

Respectfully submitted,
Anne Reynolds, Alliance for Clean Energy New York
Matt Stanberry, Advanced Energy Economy Institute

Please find the attached comments from the Alliance for Automotive Innovation, which represents 99% of cars and light trucks sold in the U.S., tier-one original equipment suppliers, as well as technology and other automotive-related companies.

In summary, the Alliance for Automotive Innovation recommends that in order to accomplish the goals of the TCI, the program should:
• Establish consistent policies across regional and state lines
• Reduce the carbon intensity of liquid fuels
• Reduce the cost barrier with vehicle incentives for electric vehicles and hydrogen fuel cell electric vehicles
• Build out electric vehicle charging and hydrogen fueling infrastructure

Support the transportation & climate act that will cut pollution to avert climate crisis & hold polluters accountable for pollution. Also we need more public transit and electric vehicle infrastructure in rural areas as well as expanding commuter rail & electric vehicles and streets in suburbs safe for walking and biking. Finally, there needs to be greater sustainable & equitable housing near transit and electric bus fleets in urban areas.

I am submitting comments for you to consider as a taxpayer in Connecticut to express my concern about the potential that a cap and trade program will have on our customers, employees, business and the environment.

The plan seems to be geared toward converting millions of gasoline and diesel-powered vehicles to electric vehicles (EVs).
While EVs may be an apparently attractive way to lower emissions, we urge that greater consideration needs to be given to a number of factors that will have an impact on jobs, the economy, property values, electric reliability, emissions and family-owned businesses:

Connecticut motorists are already paying the highest gasoline taxes in New England and the 11th highest tax in America. Connecticut also has the highest diesel tax in New England and the 9th highest tax in America. Any proposal that increases the cost of fuel in our state will disproportionally harm low-income motorists and businesses when compared to states that do not participate in TCI. According to the Natural Resources Defense Council "Low-income, households of color, multifamily and renting households spend a much larger percentage of their income on energy bills than the average family." An across-the-board energy tax is therefore "regressive," i.e. "African-American and Latino households and renters in multifamily buildings who pay a disproportionate amount of their income for energy" will be greater impacted by such a tax than average- or high-income earners. Moreover, low-income families will have less means to change their energy use to lower-taxed fuels, which are prohibitively expensive to convert to. TCI needs to consider the impact of their program on low- and fixed-income families who will not be able convert to EV’s.

Presumably, the purpose of TCI is to change consumption behavior in Connecticut and the region. But we’ve seen huge variations in energy commodity prices that haven’t affected consumption. EIA, for example, shows that gasoline consumption in Connecticut in 2015 was the same as in 2011, despite prices being more than $1/gallon less. Energy consumption is inelastic. Even if TCI is successful in increasing cost of fuel, the data clearly demonstrate that people will be paying higher prices for fuel and not curb consumption. Further inflation will result as the price of every product sold in Connecticut increases as merchants and manufacturers increase prices to account for TCI. Either that, or people will vote with their feet and leave the state or region.

Finally, even if TCI resulted in changes in consumption behavior in Connecticut, such changes will have no impact on climate change. As reported in U.S. News & World Report, the Intergovernmental Panel on Climate Change (IPCC) Assessment Report claims that even if the U.S. as a whole stopped emitting all carbon dioxide emissions immediately, the ultimate impact on projected global temperature rise would be a reduction of only about 0.08°C by the year 2050. China and India will dominate global carbon emissions for the next century, and there’s little the U.S., let alone Connecticut can do, to affect this. A Princeton University study likewise predicted that even if all countries stopped emitting CO2 entirely, the Earth would continue to gradually warm, before cooling off.
I ask that TCI take all of these issues into consideration before they decide to move forward.

Thank you for listening.

My name is Robert Orgera, I am an architect and environmentalist also a member of my towns Environmental Commission.
As an architect/planner I am well trained in understanding the real impact to local environments coastal, urban. Suburban and rural caused by bad land use planning and ignorance of climate change. I fully endorse this regional initiative and any similar measures considered to reduce carbon emissions.

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.

Truck and cars purchasing fuel supply road taxes to maintain the infrastructure of our Nations Roads and Bridges. I am not in favor of subsidizing the purchase of EV's with Cap Dollars from the TCI program.

Renewable fuels must play a part in this program and should be given equal portion of the Cap Dollars that are collected.

Thank You

Involve the community in any decision-making processes FIRST! — and that the community will be the FIRST!

Agency goals should be to establish ways to talk more directly with environmental justice communities, which can be “co-opted” by outside groups pushing their own agendas. “We need to peel past that and really get to the communities themselves and make sure that they’re hearing us—and, as importantly or more importantly, we’re hearing them.” Garvin says individuals DNREC has interacted previously with on issues of environmental justice. The event was not promoted publicly, but that it is not a closed meeting.

Please stand up for fence-line communities in the TCI process in the Mid-Atlantic.

Why am I and others just hearing about this Policy in the community after the fact?