Vermonters would pay higher gas prices over the next decade but be better off financially if they were to join a 12-state effort to cap greenhouse gas emissions from transportation and invest in greener alternatives.
That’s the conclusion of a report released Tuesday by the Transportation and Climate Initiative, a group of Northeast and mid-Atlantic states working to create a “cap-and-invest” program for gasoline and diesel fuel suppliers.
“This program would lead to significant progress in meeting Vermont’s emission-reduction commitments,” said Peter Walke, deputy secretary of the Vermont Agency of Natural Resources.
There are 52 million registered vehicles in the District of Columbia and the 12 states exploring such a program. Transportation accounts for 44 percent of the region’s carbon dioxide emissions, according to the group.
Taking a regional approach to reducing emissions has been discussed for more than a decade. The initiative was officially launched in December of 2018.
Tuesday was the first time the group released plan details, which include projections of gas price increases and the revenue states might receive for investing in emissions-reduction projects.
Gas dealers would be required to buy “allowances” through an auction system. They are expected to then pass those costs on to consumers with higher prices at the pump.
Fuel prices would likely increase 5 cents to 29 cents per gallon over a decade due to the program, according to Walke. It would raise an estimated $1.4 billion to $5.6 billion in 2022 for all the states combined.
Vermont’s share of that revenue would be approximately $20 million to $90 million per year, depending on emissions reduction goals, said Walke, Gov. Phil Scott’s point person in the discussions.
All New England states are considering participating, as are New York, New Jersey, Pennsylvania, Maryland, Delaware and Virginia.
New Hampshire Gov. Chris Sununu said Tuesday that his state would not be joining the Transportation and Climate Initiative. Vermont Gov. Scott agreed to explore the idea but has yet to take a position.
“The governor has told me and members of the press that he wants to see the details and that he’s been withholding judgement until he understands what it all means,” Walke said. “And now we’ve got those details and we can sit down and have a conversation with the governor and with the rest of Vermont about what this means.”
Scott has opposed a so-called “carbon tax” on fossil fuels, but the program is not technically a tax. Critics have nevertheless labeled it a “stealth carbon tax.”
Senate President Pro Tem Tim Ashe (D-Chittenden) said Vermont already participates in a successful regional program to reduce emissions from the energy sector, and tackling transportation is a logical extension of that approach.
The governor and the legislature have both committed to reducing the state’s emissions, and the Transportation and Climate Initiative appears to offer the state a way to make badly needed progress toward goals such as those set in the Paris Agreement on climate change.
Ashe said he had yet to digest all the details, but he commended Scott for putting top people in his administration at the negotiating table as details of the program came together.
“My hope is that, when all is said and done, if it’s a good deal for Vermont, we’ll all be on the same page,” Ashe said.
While the governor has the authority to join the program, high interest by lawmakers means any decision to do so would involve them, Walke said.
Wholesalers of gasoline and diesel fuel have ways to reduce the emissions from the fuel they sell, Walke said. This includes blending biofuel into their products. They can also sell different fuels, like hydrogen or electricity, or purchase carbon offsets, he said.
Emissions from fuel use are expected to fall by about 19 percent over the next decade without the cap-and-invest program. That assumes fuel efficiency standards continue to improve and the transition to electric vehicles continues to accelerate.
In addition to helping address climate change, the group predicts the drop in emissions will have several positive health impacts. Less air pollution will reduce deaths from asthma. People will get more exercise as they walk and bike more. Traffic accident deaths would drop, the group claims.
The group also estimates that despite the increased fuel costs, the overall program would result in a net financial gain for residents of the participating states. That’s due to the millions that would be invested in green programs in the state, and because increased use of more efficient transportation methods, like public transit or electric vehicles, will save people money, Walke said.
Such estimates, however, are regional, not Vermont specific, Walke said. For a rural state like Vermont, where the reach of public transit is limited and the most popular vehicles are pickup trucks, that financial calculus might be different, Walke said.
That’s why the next step is a “Vermont specific analysis” of the program and lots of public input before a decision can be made about whether to join, he said.
“It’s critically important that we get feedback from Vermonters and folks around the region so that we can have a full conversation about whether this is the right program for Vermont and other states,” Walke said.
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Merriam-Webster defines a tax as the following:
1a : a charge usually of money imposed by authority on persons or property for public purposes
Will the author please explain why TCI is not technically a tax as claimed in the article.
Scott has opposed a so-called carbon tax on fossil fuels, but the program is not technically a tax. Critics have nevertheless labeled it a stealth carbon tax.
Thanks!
“Gas dealers would be required to buy ‘allowances’ through an auction system. They are expected to then pass those costs on to consumers with higher prices at the pump.”
I don’t necessarily agree, but I imagine that’s the logic: Allowances are a good being auctioned, so there’s no tax being levied.
And the critics would be right. TCI is a tax on gasoline. It’s just Orwellian to call it anything else.
Complex governmental programs often have the effect of undermining public trust as well as having unintended consequences. They can allow for gaming of the system by sophisticated money interests and also add another layer of costly bureaucracy.
The federal gas tax has not increased in over 25 years. At the same many of our roads and bridges are in desperate need of repair. Since there has not been the national will to increase the gas tax, perhaps a simpler method to achieve the same goals would be for the participating states to agree on a uniform raise of their own state gas taxes to be distributed to their own transportation funds for use on infrastructure repair or mass transit.
Heck YEAH it’s a tax and I’m not happy that some people in Montpelier are pushing it. There’s a better way to deal with carbon emissions than taking money from poor rural people and giving it in EV subsidies to people making up to $92,000.
Listen, the duplicitous scam of moving this obvious tax sideways into a “Transportation and Climate Initiative” is simply another example of giving nice names to plainly pernicious pocket picking by politicians. Relying on the fact that most citizens are too busy making a living to listen with both ears all the time, this tried and true scamming of the public works too, too often.
But there’s more…..for those citizens who are truly worried that if we don’t drive our lower and middle class citizens further into poverty by adding more regressive taxes like this, our climate and air will actually resemble China’s unbreathable porridge, I have some good news! If the government will only get out of the way and stop picking winners and losers, the advancements in electric cars and hydrogen energy will well advance to the point that they needn’t be subsidized by taxpayers’ dollars. Maybe we will see SUV’s, four wheel drive and other Vermont appropriate vehicles powered electrically for under $30,000. Until then, back off! I’m sorry if this rains on the parade of those legislators who are addicted to tax raising, but the market always finds a way to fill genuine needs.
VPIRG wants to force power companies to make bad choices and for the VT Legislature to enact TCI (the Transportation & Climate Initiative has its own website) …we are going to be screwed if we do not speak up. Non-profits, NGO’s, Trusts, & Foundations use “philanthropy” to secure political clout through campaign donations, & public policy through advocacy groups like the Nature Conservancy and VPIRG, who both receive significant support from the Rockefeller Brothers Fund. TCI’s core funding comes from the same Rockefeller philanthropy, the Rockefeller Brothers Fund, which is directly behind TCI, RGGI, in fact all the anti-carbon policy we are seeing in Vermont. The monetization of carbon is driven by elites who have pre-positioned their investments in carbon trading, carbon sequestration, railroads, & natural gas, while betting against coal & oil .The carbon tax is economic death for the working people of Vermont. Instead, we need to clear out the leeches who hold public office for self- emolument, & tax the “philanthropic” foundations into the stone age.
The Vermont AFL-CIO supports a true, union based, Green New Deal for Vermont (and beyond). But central to our vision for a socially just, renewable energy future (built & maintained with union labor) is that such a bold social project needs to be funded through progressive taxation and other creative means which do not regressively put more burdens on low income & working class people. The fact is that Vermont has something worse than a piss poor public transportation system. Any scheme which seeks to price working people out of driving a gas powered vehicle (without having a comprehensive public transit system & affordable electric cars readily available first) will not result in workers driving less. Rather, such moves will do nothing more than take dollars out of the pockets of working people; money which we desperately need while living in a society which does not guarantee livable wages, public healthcare, and affordable housing. But charging the working class more money to get to their job? I fail to see how any friend of Labor could stand by such a proposal.
-David Van Deusen, President of the Vermont AFL-CIO