TCI Regional Policy Design Stakeholder Submissions

The TCI is an essential step forward for the Eastern US to combat climate change. Many states, including Vermont, have ambitious emission reduction goals under a Global Warming Solutions Act or similar legislation that will only be met with a stringent and permanent policy that addresses transportation. In Vermont this is especially important because transportation produces nearly 40% of Vermont’s emissions. A cap and invest program which confronts the greatest source of emissions while also investing in new technologies and supporting desirable and equitable transportation initiatives will contribute positive gains towards these climate goals.

The Regional Greenhouse Gas Initiative (RGGI) is an existing cap and trade program for the electricity sector enacted in 2009 by many of the same states. The existing framework of this durable and effective program is evidence that the states could design an effective program for transportation as well. Nonetheless, various policies and investments should be considered and implemented alongside a pricing strategy to achieve the results our climate and our future requires. Many of these states have a renewable portfolio standard that complements RGGI to create effective, well rounded policy. A similar idea can be applied to the transportation sector. For instance, requiring a certain amount of the public vehicle fleet to become electric or ensuring housing developments are in line with our transportation goals. A combination of a cap and invest program, mandates, and investments would work together to create powerful climate policy for the transportation sector in the Northeast and Mid-Atlantic.

The flexibility of the cap and invest design is advantageous. The cost containment reserve ensures that the price of allowances, and therefore the price that is passed to the consumer, does not exceed an unreasonable amount. This cap price and floor price should be predetermined at a level that will guarantee sufficient emissions reductions to make strides in Vermont’s greenhouse gas reduction goals.

Most importantly, it must be ensured that the TCI is designed to address existing inequity in our current transportation system and address additional inequity that will be created through the implementation of the TCI. A vital part of the design of the TCI allows the states to invest the income from the allowances as they see fit. This way, the TCI provides states with an opportunity to address their specific most pressing transportation needs. Due to the diversity in demographics and transportation needs across states, this aspect of the TCI is critical. For Vermont, this has numerous benefits. Investments in transit upkeep and expansion will allow Vermonters to get around who cannot or wish not to rely on personal vehicles as much. And with expansion of long-distance public transit and local bike and walking routes more citizens will be encouraged to get out of the SOVs. The funds that are raised should also be put towards ensuring that the Vermonters most at risk of increased gas prices (i.e. people who rely heavily on their vehicles for work and life and are at financial risk if gas prices increase) can receive rebates. The planned incidence modeling on households by RFF is an important next step in ensuring this equity. Overall, the TCI can make great strides in addressing Vermont’s largest sector of emissions while improving transit options, allow for greater mobility in the state, and reduce the need to drive as much in the first place.

The Sierra Club is sharing the attached 143 comments from our members and supporters in Vermont supporting finalizing the Draft Memorandum of Understanding (MOU) of the Transportation and Climate Initiative (TCI). Thank you for helping to design a regional policy to limit climate pollution from motor fuels and invest in a modern, clean, transportation future. The evidence is clear: the more we limit pollution from motor fuels, the more jobs are created, the more the economy grows, and the more lives we save. Please sign on to the agreement to implement a strong, equitable regional climate protection policy through TCI. Invest in the communities that have suffered the most from burning gasoline and have the least access to clean transportation options. Stop sending our hard-earned dollars out of the state to oil companies, and choose to create jobs, grow the economy, and save lives for families and businesses. Thank you.

The Transportation and Climate Initiative is already an impressive feat in terms of environmental action. The independent organization and union of so many states and stakeholders to address this critical issue sets a commendable example to the rest of the country and demonstrates that we need to act. Transportation is a particularly impactful area with regard to energy use (especially fossil fuel consumption) and also environmental justice. Mobility allows people to not only meet their basic needs but also to access economic opportunities, and with lower-income individuals tending to not have access to personal cars, good public transit is necessary to ensure equitable access to jobs and resources.1,2 Fortunately, the TCI already “recognize[s] and [commits] to investing in and mitigating the impacts on low-income and disadvantaged communities.” The initiative receives my support so long as it makes concerted efforts in the following areas to ensure just outcomes.

Firstly, the cap and invest strategy proposed to bring down emissions and finance the transition to cleaner options needs to protect low-income consumers from gas price increases. In many cap programs, the cost of buying emissions allowances gets passed down to the consumer who ultimately uses the energy source, and this disproportionately impacts lower-income populations.3 Consumers can be shielded from the impact of these added costs through state programs, which can either aid individuals and households in lowering gasoline consumption or provide financial assistance to those with trouble affording their expenses. Rebates and subsidies present more traditional methods, while climate credits are a newer solution; in essence, part of the revenue generated from the sale of emissions allowances returns to consumers to offset the cap costs.3

Secondly, the TCI projects, through this transition to cleaner transportation, a “modest” increase in jobs. Perhaps this isn’t a main benefit of the program, but low-income communities should be given preferential access to these opportunities. Clean energy jobs in particular provide a substantial economic boost to people of lower income brackets: the poverty rates for people who have not completed college or high school are higher than for those who have;4 however, people without higher education can still access these jobs and even make more money than in other jobs for which they would be sufficiently educationally qualified.5 While this would be a more indirect equity outcome of the TCI, it is an important contribution to the upliftment of vulnerable communities and a way to guarantee that they benefit from this initiative.

Addressing climate change is a critical task and by no means an easy one, especially given the wide array of problems to be solved. Given its hefty role in emissions and in our daily lives, transportation is a key place to initiate the shift to cleaner energy. However, in setting a cap on fuel use, the TCI cannot further burden low-income communities. So long as this program fights to uplift vulnerable populations and actively include them in the transition to sustainability, it has my full support.


References
1: White, G.B. (2015, May 26). Stranded: How America’s failing public transportation increases inequality. The Atlantic. https://www.theatlantic.com/business/archive/2015/05/stranded-how-americas-failing-public-transportation-increases-inequality/393419/.
2: Sanchez, T.W., Brenman, M., Ma, J.S., & Stolz, R.H. (2018). What is transportation equity? In The right to transportation: Moving to equity (pp. 7-11). Routledge.
3: Aldersebaes, J. (2016, Aug 8). Environmental justice wins with California cap-and-trade. Triple Pundit. https://www.triplepundit.com/story/2016/environmental-justice-wins-california-cap-and-trade/23946.
4: UC Davis Center for Poverty Research. (n.d.). How does level of education relate to poverty? [Graphs]. Retrieved February 27, 2020, from https://poverty.ucdavis.edu/faq/how-does-level-education-relate-poverty.
5: Marcacci, S. (2019, Apr 22). Renewable energy job boom creates economic opportunity as coal industry slumps. Forbes. https://www.forbes.com/sites/energyinnovation/2019/04/22/renewable-energy-job-boom-creating-economic-opportunity-as-coal-industry-slumps/#60a1997a3665.

The TCI appears to be a reasonable way to hold states, local governments, and companies who work in fuel industries, accountable for the damage they are doing to the environment. The plan has effects that can reach many people; approximately 72 million with 52 million vehicles across 12 states. The scope of this project is what makes it difficult to implement but also what makes it a potentially revolutionary plan.
Some detractors of the plan argue that the claim the TCI is based on is of dubious scientific standing: namely that climate change is increasing the number of extreme weather events, and that these weather events are dangerous threats to the states in the region. It will perhaps take more than good data to convince people of the escalating danger of these storms, in both an economic and public health sense, but in Vermont alone average yearly precipitation has increased nearly six inches, and extreme weather events are having an increased impact on Vermont (https://statesummaries.ncics.org/chapter/vt/).
The TCI plans to use funds generated from the allowances to invest in programs that will enable residents to transition from single-occupancy vehicles (SOV’s) to environmentally friendly and low cost alternatives. Others have claimed that the funds will be invested into “most favored lobbyist’s industry coffers” as well as “administration costs.” The TCI memorandum of understanding specifically states that must address TCI project goals, such as carbon dioxide reduction, cleaner air, and more access to sustainable transportation. To claim that the government would do otherwise is baseless, especially if we can hold our leaders accountable.
It is likely true that higher gas prices will disproportionately affect rural Vermonters.
It is also true that many businesses rely on reasonable gas prices to operate their business and maneuver through their daily lives. This is primarily owed to the fact that our society has built itself around the combustion engine: to move goods and people all over the world in a relatively short amount of time is a pillar of our modern world. Yet it is also something of a crutch.
The current system, using personal cars and chauffeuring family members (children, the elderly, and those unable to drive) grants a sense of independence that public transportation will have a hard time replicating. However, this not only places a strain on members of the community that can drive, but also those that constantly must ask for rides: to the grocery store or doctor appointments. I think for the proposed plan to be truly effective in bringing transportation equity, a system would have to be added to ensure that these rural Vermonters are given compensation in some form. Even though the payoff in investments to clean and accessible public transportation will eventually reach them, there will be a lag time. During this time, these Vermonters will still be paying higher prices for gas for cars that they don’t have reasonable alternatives to, with nothing to show for the higher prices they paid.
This is an obvious flaw in the current memorandum, but it is also somewhat barebones, and more of document to give states an idea of what to expect. Thus, there is room for public pressure on our representatives concerning these critical issues left out. Despite this incomplete structure, in the public webinar, the TCI used an investment modeling tool and REMI model economic inputs and outputs to estimate the reductions in carbon dioxide and overall effect on the economy. It was found that there would be reduced overall fuel expenditures, lower congestion, and lower vehicle operating and maintenance costs across all levels of caps (20, 22, and 25 percent).Though the initial wait for the investments in clean energy to become tangible to rural Vermonters, I believe that with a support mechanism for these more vulnerable groups, the TCI is a plan with too many positive benefits, for the economy and more importantly, the environment, to ignore.

I support a “…design (for) a regional low-carbon transportation policy proposal that would cap and reduce carbon emissions from the combustion of transportation fuels through a cap-and-invest program or other pricing mechanism… [and]… to complete the policy development process within one year, after which each jurisdiction will decide whether to adopt and implement the policy.” Electric vehicles for both public transportation and individual use with abundant charging stations throughout the region are needed to support these goals.

I'm not sure what to do about this. I'm definitely committed to reducing carbon emissions, but I'm also not in a financial position to run out and buy an electric car.

I am retired and this would be a hardship, but I think it is absolutely critical that we start to get a handle on what we pump into the atmosphere.
To borrow from another responder, " TCI seems to be an effective way to help us reduce Greenhouse Gas Emissions while providing important funds to invest in clean transportation initiatives." We can't afford to wait any longer, nor can the climate wait for us to act. I totally support this initiative.