On Dec. 17, a regional partnership known as the Transportation and Climate Initiative released a draft memorandum of understanding for a plan to cap carbon emissions from transportation fuels.

The draft memo builds upon a framework for the TCI plan that was released last fall. A final agreement is expected by spring 2020.

The TCI partnership comprises 12 New England and Mid-Atlantic states along with the District of Columbia. Each of these jurisdictions will need to decide independently whether to sign on to the agreement once it is finalized.

The TCI is structured as a cap-and-trade system for transportation fuels, with a cap set on the total amount of carbon dioxide allowed to be emitted from vehicles across the multistate region. Within the cap, participating jurisdictions would sell carbon “allowances” to wholesale fuel suppliers, at a certain rate per ton of greenhouse gas emissions produced by their fuel. Individual fuel suppliers would then choose whether to pass the cost of the carbon allowances along to fuel retailers, and the retailers to customers. As with other cap-and-trade systems, such as the Regional Greenhouse Gas Initiative, which applies to emissions from power plants, fuel suppliers can trade allowances among themselves.

The participating jurisdictions would be required to invest all revenue from the sale of carbon allowances in state or local initiatives that reduce or eliminate transportation-based emissions.

The transportation sector accounts for 40 percent of total greenhouse gas emissions in the Northeast region. New models for TCI estimate that transportation-based emissions could be reduced by 20 to 25 percent under the program.

Since the announcement of the draft TCI agreement, the Boston Globe has reported on concerns that gas prices could increase by as much as 17 cents in the first year. While Gov. Charlie Baker has long opposed an increase in the state gas tax, he is a strong proponent of the TCI model, trumpeting its potential environmental benefits and clarifying that it is technically not a tax.

New Hampshire Gov. Chris Sununu announced on Dec. 17 that his state would no longer be participating in the TCI partnership, saying he “will not force Granite Staters to pay more for their gas just to subsidize other state’s crumbling infrastructure.”

The Baker-Polito administration has substantial representation among the leadership of TCI. Energy and Environmental Affairs Secretary Kathleen Theoharides chairs the partnership, and Department of Environmental Protection Commissioner Martin Suuberg co-chairs the Executive Policy Committee.

The draft memorandum of understanding is available at www.transportationandclimate.org/sites/default/files/FINAL%20TCI_draft-MOU_20191217.pdf.

Public comments on the draft will be accepted through Feb. 28 via this form: www.transportationandclimate.org/main-menu/tci-regional-policy-design-stakeholder-input-form.

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