A Regional Push to Clean Up Cars, Trucks and Mass Transit

This story was originally published by Stateline, an initiative of The Pew Charitable Trusts.

As power-plant emissions decline in the Northeast, a group of East Coast states is targeting another source of greenhouse gases: cars, trucks and mass transit.

Governors from Virginia to New Jersey jointly committed last month to develop a plan to cap transportation emissions, likely by charging fuel distributors and using the profits to invest in cleaner alternatives.

They have been spurred by a startling statistic: Transportation produces about 40 percent of carbon emissions in the region, according to data from the U.S. Energy Information Administration.

The effort isn’t unprecedented: California already has a plan to curb transportation emissions, and many East Coast states are members of the Regional Greenhouse Gas Initiative (RGGI). Since 2009, the initiative known as “Reggie” has capped the overall carbon dioxide produced by power plants and required plant operators to buy permits for their emissions.

Power plant emissions have fallen by 51 percent in the region since the program began, according to an analysis of RGGI data by the Acadia Center, an environmental nonprofit with offices in five Northeast states. States have used the permit proceeds to weatherize homes and to give consumers rebates on their electric bills. But the region faces significant hurdles in replicating that reduction with transportation emissions.

Brian Murray, the director of the Duke University Energy Initiative who authored a study of RGGI that found it significantly contributed to carbon reductions in New England, said the model makes sense for the transportation sector but may take longer to produce results.

“There’s a lot of different ways to achieve lower emissions from electric power. You can go from coal and oil to gas, you can go from all fossils to renewables,” Murray said. “Transportation is harder because people have the cars that they have and in the short term, you have to deal with that.”

Massachusetts Gov. Charlie Baker, a Republican, has led the charge on this new effort. He said in a statement that “reducing transportation emissions is imperative to combating the causes of climate change and meeting Massachusetts’ aggressive greenhouse gas reduction targets.”

Now nine states—Connecticut, Delaware, Maryland, Massachusetts, New Jersey, Pennsylvania, Rhode Island, Vermont and Virginia—plus Washington, D.C., have committed to a “RGGI redux” for transportation. Participants are hopeful that New York and Maine also will join the group.

Although critics say market forces are mostly responsible for the reduction in power plant emissions, environmentalists and the participating states consider RGGI a success.

“The reason RGGI is so popular and so successful is that we’re using revenue generated from pollution and investing it back into solving the problem,” said Chris Bast, chief deputy director of Virginia’s Department of Environmental Quality. “We’re going to be spending the next year figuring out how we apply the same concept to transportation problems.”

The details remain to be determined, but participating states are expected to charge fuel distributors for carbon emissions, rather than directly charging drivers or gas stations. RGGI similarly targets power companies instead of their customers.

Chris Dempsey, director of Transportation for Massachusetts, a coalition of groups supporting the initiative, said the state could tax diesel more than unleaded gas, which in turn might be taxed more than gas mixed with biofuels, based on how much carbon they produce.

Under any scenario, however, those increased fuel costs would be passed along to consumers, including many who lack viable alternatives to using their car. In California the cap has resulted in a roughly 12 cent increase in the price for a gallon of gas.

States that have signed the agreement, organized by the Georgetown Climate Center, have committed to developing a framework for achieving their goals within a year. With few concrete details at this early stage, potential opposition from the oil industry has been muted.

“We will evaluate any proposal that comes out of this effort with an eye to balancing environmental progress with keeping consumer energy costs low in the region,” Kyle Isakower, a vice president with the American Petroleum Institute, an oil industry trade group, said in a statement.

Much-Needed Money

Some lawmakers have voiced concerns that the multistate agreement could either slow down ambitious member states eager to make a bigger dent in carbon emissions, or even fall apart if more moderate members decline to participate in a new carbon market.

They are likely to be tempted, however, by the large sums of money the plan could generate.

An analysis from the Acadia Center found that if the states charge $15 a ton of carbon — on par with what California charges both power plants and oil distributors — Massachusetts alone would take in $5.5 billion by 2030.

States might spend that money to repair crumbling roads and bridges, and to boost chronically underfunded public transit systems. Some supporters are eager to spend it on electric-vehicle charging stations, electric trains and buses and other clean-energy alternatives.

Also on the table: rebates for buyers of electric vehicles, investments in companies seeking to build large electric industrial vehicles, and efforts to combat non-transportation emissions, such as modernizing paper mills or installing solar panels. California has used some revenue to build low-income housing near transit hubs.

Proponents say RGGI’s success comes in large part from the way its revenue has been invested. For example, Massachusetts largely uses its funds to help people weatherize their homes, decreasing the demand for energy as power plants transition toward cleaner sources.

“Yes, there’s a cost imposed” on consumers, said Daniel Gatti, a transportation policy analyst with the Union of Concerned Scientists, which supports the proposal. “But you invest the resources effectively and we can get overall net consumer savings.”

‘A Middling Success’

Critics, however, say power companies reduced their reliance on fossil fuels not because of RGGI’s cap but because of lower prices for natural gas.

“There is little evidence to suggest that RGGI has been even marginally effective at reducing carbon dioxide emissions,” the Institute for Energy Research, a conservative think tank, wrote in a report.

The nonpartisan Congressional Research Service said the impact of RGGI on reducing the global accumulation of greenhouse gas emissions in the atmosphere was “arguably negligible.”

But its report said the $2.7 billion in revenue raised by the program through 2016 has had some impact on emissions in the region and spurred job growth, calling RGGI “instructive” for policymakers looking to craft a national program.

“RGGI is a middling success,” said Massachusetts state Sen. Mike Barrett, a Democrat and Senate chairman of the legislature’s joint energy committee, arguing that the program’s price for carbon is too low. He’s worried a new multistate compact might hold Massachusetts back again.

He’s concerned that governors and a small circle of advocates will make policy while state legislators are left on the sidelines. And there are few deadlines in place to make sure discussions keep moving.

Barrett also is concerned that governors from other states, perhaps those with more of an oil industry presence, may balk at the ambitious plans Massachusetts might be willing to embrace.

“Even though the state of awareness everywhere is advancing very nicely,” he said of climate change, “you’re going to find subtle differences in terms of motivation among citizens.”

“There’s not a question that Massachusetts is going to have to slow down to accommodate the slowest-moving member of the coalition,” he said. “That’s the way coalition-building works.”

Supporters of the plan acknowledge it’s a risk.

“That’s my nightmare,” said Gatti of the Union of Concerned Scientists. “That some members might make the policy less ambitious and then ultimately not participate.”

But Jackson Morris, director for the eastern region of the Natural Resources Defense Council’s Climate and Clean Energy Program, said RGGI is stronger today because of all the state participants.

Though New Jersey left the program under former Republican Gov. Chris Christie, it is expected to rejoin under Gov. Phil Murphy, a Democrat. Virginia has committed to joining.

“We would not be where we are today in the Northeast and Mid-Atlantic in progress in the power sector if one or two states had decided to go crazy aggressive over the nine or 10 states that wanted to participate,” Jackson said.

“[RGGI] may not be as ambitious or aggressive as it might have been, but now you’ve got a much larger swath of states participating in a meaningful way. Then you ratchet [the carbon cap] down as states get comfortable and realize the sky isn’t going to fall.”