TCI Regional Policy Design Stakeholder Submissions

The TCI is a “reactionary liberalism” dream: extract millions of dollars from people who can’t figure out why their motor fuel bills are steadily creeping up, and spread the revenues around to pay for “carbon reduction investments”.
The TCI is astoundingly, one might even say diabolically, complex. The details, not yet finalized, will emerge in a draft Memorandum of Understanding (MOU) scheduled to appear in December. After public input, the MOU will go to Gov. Phil Scott. His signature would put Vermont into the 12-state deal.
Then either the Regulated Terminals that supply motor fuel to eighty Vermont distributors, or the distributors themselves, will have to purchase “allowances”, the cost of which will be inconspicuously added into the price paid by consumers.
The TCI’s administrative body will decide how many allowances must be issued to sufficiently drive up the price of motor fuel, thus reducing the amount of motor fuel consumed, thus reducing to below an arbitrary TCI-set cap those awful carbon dioxide emissions that are driving the planet toward Al Gore’s heat death.
Did I mention that no legislator will ever vote on this stealth carbon tax? Governor Phil Scott, alone, can plunge Vermont into this mega-scheme to sock Vermonters with a carbon tax that the TCI backers hope they’ll never figure out.
But Gov. Scott has repeatedly voiced his opposition to a carbon tax. What if he refuses to sign on to the MOU? Here’s another diabolical feature. If he doesn’t sign the MOU, Vermont motorists will still be forced to pay for the cost of the allowances hidden back up the supply chain in Massachusetts and New York. But Vermont would not be eligible to receive its assigned share of the net revenues (after enormous enforcement and legal costs) from the TCI allowance sales.
Here’s the short takeaway. The TCI MOU is designed to make Vermont consumers pay a steadily increasing carbon tax on their gasoline and diesel fuel. No legislator will ever vote on imposing this tax. It will just happen, courtesy of the Rockefeller Brothers Fund and the climate change warriors like VPIRG who extol its benefits. After ten years of increasing motor fuel prices, the TCI will have produced no detectable effect whatever on climate change.

As currently proposed, TCI would result in a potentially significant effective tax on highway gasoline and diesel. This would increase costs for manufacturers, retailers, dairy, forestry, mineral, and other businesses dependent on highway transportation for moving supplies and goods, as well as construction and other contractors dependent on vehicles, both through direct costs and the cost of transportation service providers.

Unlike residential drivers, who might respond to higher costs by adjusting driving habits and potentially converting to more efficient vehicles, and for whom states could fund programs supporting such changes with revenues allocated from TCI, the commercial transportation noted above is already driven to be as efficient as possible in terms of both logistical planning and transportation technology owing to regulatory requirements and the high costs of transportation generally, compounded by the competitive pressures businesses already face.

Without meaningful options to reduce exposure to the effective tax impact of TCI through behavioral or technology changes, or options for states to fund programs supporting such changes with revenues allocated from TCI, this cost impact could only be mitigated by moving production or operations out of the impacted region, or businesses would be left facing the consequences of trying to absorb or pass on costs to consumers.

TCI would therefore appear to promise little if any change in commercial transportation carbon emissions unless produced by reduced business operations, with resulting loss of employment and economic activity. This would be both fundamentally inequitable and highly cost ineffective.

The most efficient way to address the concerns outlined above while proceeding with TCI would be to exclude diesel from the program and focus on highway gasoline and related transportation issues and opportunities. This would protect the overwhelming majority of commercial transportation, and states could still work to assist businesses with smaller, gasoline fueled vehicle options.

Nevertheless, even focusing on highway gasoline could still lead to other economic and social consequences, particularly in rural areas. These potential consequences should be fully explored, explained, and opened to public review and comment before states take formal steps forward on the TCI proposal.

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 prioritize equity. Low- and moderate-income and people in rural areas without access to public transportation should be the primary beneficiaries of the low-carbon transportation investments.

Polluters should pay. In this case, the fossil fuel companies that are buying permits at auction should be required to pay for the environmental and health damages associated with their products.

The cap should start low and drop quickly, in line with the latest science on the necessary pace of climate pollution reductions.

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.

My two major concerns are Lake Champlain and other bodies of water, and air quality - particularly in Burlington.

The degradation of Lake Champlain due to road runoff, sewage spill, algae and farming practices, as well as Vermont's
lakes and rivers, is deeply concerning.

The concentration on roads and parking lots at the expense of solutions such as light rail and rail connecting Vermont is repeating
the past and compounding present problems.

Please support the Transportation and Climate Initiative. It is crucial now, more than ever, for states to lead in climate action. We can't afford to wait for a new administration. We must join other states in solutions that work.

I'm told that: TCI is a multi-state plan to cap emissions from the transportation sector, auction off permits to distribute fossil fuels in the participating states and use the auction revenues to invest in low-carbon transportation solutions.

This approach, if understood by me, seems to lead to scarcity followed by higher prices (an indirect fuel tax/fee). Where's the equity in this?

I'm also told that: Despite RGGI’s success regionally, carbon pollution is rising in Vermont (as I suspect is so in other states). The increase is driven primarily by an increase in greenhouse gas emissions from the transportation sector, our cars and trucks.

As I look around the parking lots, I see larger and larger automobiles and pickup trucks every year with the concomitant worse mileage in most cases. Manufacturers' pursuit of greater profits push for larger vehicles for safety and indirectly for status. Since we wouldn't want to/can't limit vehicle choice, maybe we should have a CO2 mileage levy on each vehicle that is dependent on annual mileage driven, and EPA mileage rating. This levy could be established at the annual inspection from odometer readings and be progressive with the EPA mileage rating, so that unnecessarily large vehicles in effect pay more for the mostly unnecessarily greater CO2 emission. Mileages could be reported to the DMV and car registration renewal would be dependent on the payment of the levy.

It is vital that we take steps to curb emissions from all sectors, but regulation will be needed to control wasteful transportation consumption. The most effective action would be to develop an extensive and reliable system of affordable public transport; but until that's done every emitter must pay for the damage. As things are now, people idle their engines with impunity, and it drives me crazy!