CONCORD — Climate change advocates say a new, 12-state compact could lead to fewer cars on the road and a massive investment in infrastructure to reduce highway congestion.
Critics insist it’s a cleverly-disguised, regressive gasoline tax hike scheme that would most hurt working families.
State regulators in these Mid-Atlantic and Northeastern states have for more than a year been fine-tuning the Transportation Climate Initiative (TCI), that has as its goal to significantly reduce emissions from cars and trucks that contribute an estimated 40% to the pollution problem.
With plenty of fanfare, the Georgetown Climate Center last week unveiled the draft proposal that would cap the level of allowed emissions from cars and trucks.
This policy change would force those distributing fuel across state lines to pay allowances to sell gas that exceeds the carbon cap.
The plan calls for states to reduce emissions by 20-25% by 2032.
This cap-and-trade model is a similar design to the Regional Greenhouse Gas Initiative that New Hampshire and eight other states are involved in which makes the owners of industrial power plants buy allowances for emissions that exceed their standard.
“This marks an important milestone for us to propose a regional low carbon program,” said Martin Suuberg, commissioner of the Massachusetts Department of Environmental Protection. “This contributes to the sense of interstate cooperation on shared investment principles and to follow up on it, we will need to propose bold initiatives.”
To encourage state officials to participate, profits from these allowances would be sent back to the states where the gasoline was bought.
The money would then be used for “green” transportation projects such as commuter rail expansion, park-and-ride lots or even traditional road reconstruction work as long as it would reduce traffic congestion and improve air quality.
But thanks to a 2012 state law, New Hampshire officials can only monitor but not “join, implement or participate in” any low carbon fuels program unless the Legislature gives its approval.
Ex-NH speaker pushed ban
Then-House Speaker Bill O’Brien, a Nashua conservative Republican, had pushed that change because New Hampshire back in 2010 had been in on the early planning stages of this program.
And in response to last week’s rollout, Gov. Chris Sununu, a Newfields Republican, said he doesn’t believe Granite Staters would support the initiative.
“I will not force Granite Staters to pay more for their gas just to subsidize other states’ crumbling infrastructure,” Sununu said in a statement. “New Hampshire is already taking substantial steps to curb our carbon emissions, and this initiative, if enacted, would institute a new gas tax by up to 17 cents per gallon while only achieving minimal results. This program is a financial boondoggle and the people of New Hampshire will never support it.”
Many political leaders supporting this plan, such as Massachusetts Republican Gov. Charlie Baker, said they oppose a gasoline tax increase and that’s not what this is.
Baker told reporters last week there are many variables in the pricing of gasoline that are more significant than the cost of these allowances.
Brian Woods, an environmental analyst for the state of Vermont, said the draft does not contain a specific emissions level.
But those who did the draft modeling freely point out that if the allowances were all passed on at the pump they would translate to a 5-to-17 cents per gallon increase.
The lower gas tax hike would be if the emissions target was 20%; the upper end of the range would be to achieve a 25% reduction.
A 5-cent gasoline tax would generate about $40 million in transportation aid to NH; the 17-cent increase would translate to more than $135 million a year.
Those buying gas in NH pay a 22.2 cents-per-gallon state gasoline tax and a total of 42.2 cents in state and federal taxes.
The total taxes paid for gas in Massachusetts is 44.9 cents per gallon and in Vermont it’s 49.3 cents.
Officials with the Sierra Club would prefer the TCI group aim even higher with its reform.
“We urge the states to finalize limits that are actually consistent with their climate commitments, and invest in and with communities most over-burdened and under-resourced. A strong final policy that reduces transportation pollution 45% by 2032, a target that a broad set of groups has called for, will be key to helping states meet their climate, health and equity goals,” said Eastern Region Deputy Director Mark Kresowik.
Critics question if costs are too high
Opponents maintain TCI is not worth the cost of these allowances, $1.4 billion and $5.6 billion, because even without this change emissions are expected to decline by 19% over the next decade.
“If the TCI’s worst-case scenario occurs, the cost would be $14 billion to achieve an emissions reduction roughly 1/20th the size of what would happen anyway,” wrote Drew Cline, executive director of the Josiah Bartlett Center for Public Policy in his analysis of the group’s work.
Greg Moore, state director of fiscally-conservative Americans for Prosperity, said the project is too much social engineering to achieve too little in the way of results.
“TCI is nothing more than a thinly veiled, massive gas tax hike that would really harm the low and fixed income residents of New Hampshire, while they would likely see little or no benefit for the increased cost at the pump that they would be paying,” Moore said.
“Worse yet, an unelected board would have the ability to raise this gas tax with no accountability. Dealing with New Hampshire’s infrastructure needs should be done in a transparent and accountable manner that doesn’t regressively hurt seniors and those in need.”
State Sen. David Watters, D-Dover, supports the project and warned even if New Hampshire does not participate, consumers here could end up paying higher gasoline prices anyway.
“If our other Northeast neighbors opt in to the Transportation and Climate Initiative program, we may still see increases in fuel prices at the distribution level but not benefit at all from it — just as we currently pay higher distribution and transmission costs for electricity because we haven’t reduced our greenhouse gas emissions at pace with the other RGGI members,” Watters said.
In 2020, the Legislature will consider a bill Watters has authored to create an 11-member commission to study whether NH should join the program. The measure would in the meantime also allow state officials to participate in the program.
“I am disappointed Governor Sununu has stated his outright opposition to joining a program that would reduce transportation emissions, protect public health, and fund necessary infrastructure projects to increase energy efficiency,” Watters said.
Moore said initially legislative supporters had been working on a 2020 bill to implement TCI.
“I guess Senate Democratic leaders decided they didn’t want their members to walk the plank on a gasoline tax increase in an election year,” Moore added.
A spokesperson said Senator Watters always had intended his bill to be a study since the initiative will not be up and running in any state until 2021.