A coalition of a dozen states released a draft agreement on Tuesday for a cap-and-trade program supporters say could drive down greenhouse gas emissions from cars and trucks, while producing billions of dollars for participating states. But opponents say the Transportation Climate Initiative depends on a regressive gas tax that will hurt rural residents in particular. And the question of whether Maine Gov. Janet Mills will sign on is still open.
The TCI as it’s known has been in the works for nearly a decade. The new draft memorandum of agreement outlines a program that would put a lid on overall carbon emissions allowed from transportation fuels, require wholesale dealers to bid for allowances to sell fuel within that cap and send the auction proceeds to participating states. And supporters say that reduced auto pollution would combat climate change while improving public health.
“The beauty in this program is that it gives the states flexibility to adapt the program to whatever specific needs that the state has,” says Sue Ely, a staff attorney at the Natural Resources Council of Maine, one of numerous environmental groups backing the work of the TCI’s collaborative of Northeast and mid-Atlantic states, from Delaware to Maine.
Models released along with the draft agreement consider the effects of driving down transportation emissions by anywhere from 20% to 25% over a ten-year period.
That would produce annual revenues, TCI officials say, of between $1.4 billion and nearly $7 billion per year. The money could be invested in public transit, in electric vehicle charging stations or purchase incentives and for public health programs aimed at communities that bear the brunt of vehicle pollution.
“We are the most rural state in the nation, and that means we do have to have unique solutions crafted to address the fact that you can’t get places in Maine,” Ely says. “There’s limited bus service in our metropolitan areas, there’s a lot of the state where’s there’s no public transportation. So what are those solutions? This program would give us some money to find those solutions and invest in them.”
The program is modeled on an existing cap-and-trade effort for pollution from electricity generation called the Regional Greenhouse Gas Initiative. RGGI, as it’s called, has sent billions of dollars to participating states, including Maine, which have then been invested in energy efficiency and other efforts to reduce costs and combat climate change.
Electricity consumers have been relatively insulated from the costs of that program. But in the case of the TCI, fuel dealers might pass the auction costs directly to consumers in the form of price hikes at the gas pump. TCI’s models show that in the first year, drivers could face a per-gallon price hike of 5-17 cents, depending on how aggressive the overall emissions targets were.
Opponents are calling it a stealth gas tax.
“And it’s a regressive tax,” says Julie Rabinowitz, a spokeswoman for Maine People Before Politics, a nonprofit aligned with former Republican Gov. Paul LePage.
Rabinowitz says that means rural Mainers who need cars to get to work or medical care would be paying a tax to benefit more urban and affluent states.
“Because if you are able to afford an electric vehicle, or you are able to live in a more urban area that has more reliable public transportation, you have transportation options where you can avoid this tax,” she says.
LePage’s administration did not participate in the planning process, and while Mills has sent representatives to the TCI’s meetings, she has not formally signed on. Her administration did not respond to requests for interviews with officials such as the governor’s energy director or Hannah Pingree, leader of the governor’s new Climate Council.
In a brief email statement, spokeswoman Lindsay Crete said Maine would continue to monitor the effort. She added that “the challenges of climate and transportation issues for rural states like Maine are unique, and the state will be appropriately cautious when considering these issues”.
Environmental advocates are hopeful Mills will bring Maine on board. Phelps Turner, a transportation specialist at the Conservation Law Foundation, notes that the draft agreement emphasizes assistance for low-income residents.
“In fact, we see the transportation climate initiatives as an opportunity for Maine to take a lead on reducing emissions for transportation in rural states in particular and demonstrate how rural states can cut emissions while providing benefits across the state,” he says.
The more states that do participate, Turner adds, the more effective the program will be. But already, New Hampshire Gov. John Sununu has announced that his state will not sign on. That raises the prospects that if neighboring states such as Maine do sign on, their residents could be driving over to the Granite State not just to buy liquor but to gas up as well.
After a public comment period, the TCI group aims to produce a final memorandum of agreement to be considered by the states this spring.
Correction: The nonprofit Maine People Before Politics is not a political action committee.