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Updated: December 21, 2020

CT commits to transportation cap-and-trade program

Logistics companies and consumers alike could see higher gas prices, once a cap-and-trade program for transportation emissions launches in 2023.
By Matt Pilon

A multi-state effort to reduce pollution from vehicles and other transportation sources took a step forward Monday as Connecticut and several other states announced they would move forward with plans for a 2023 launch.

The so-called Transportation Climate Initiative (TCI) is a type of cap-and-trade (or cap-and-invest) program that will place a limit on transportation fuel emissions and require fuel distributors to purchase allowances at auction to exceed the cap.

Participating states would invest the proceeds of those auctions in electric vehicles, public transit expansions, pedestrian and bicycle infrastructure and other low-emissions efforts.

Connecticut expects to collect about $1 billion from TCI over a 10-year period, including $89 million in the first year, according to the Department of Energy and Environmental Protection, which said the program would reduce transportation emissions in the state by at least 26% over a decade.

Connecticut is one of 11 members of a similar regional program for power plant emissions called the Regional Greenhouse Gas Initiative, which launched a decade ago.

TCI has been in the works for a similar amount of time, with discussions involving 11 eastern U.S. states and Washington, D.C.

However, Monday’s announcement revealed that the program, which has drawn criticism because it could lead to higher fuel prices for consumers and the trucking industry, is headed into its final planning stages with just four signatories (Connecticut, Massachusetts, Rhode Island and Washington, D.C.).

Early this year, before the COVID-19 pandemic struck, Gov. Ned Lamont and Massachusetts Gov. Charlie Baker had each expressed concern about potential impacts on gas prices, creating uncertainty over whether they would ultimately commit to the program, but the signing of the final memorandum of understanding confirms that each is on board.

In a statement, Lamont said the revenue from the TCI program will be a boost for the state's economy, in addition to improving the environment. 

"Connecticut has always taken pride in our leadership role when it comes to climate, and when we can combine that with a stronger economy, fast transit systems, and regional cooperation, that’s a win for all of us," Lamont said.

A group of more than 100 businesses and colleges wrote to Lamont in October urging Connecticut to sign onto TCI. Energy giant BP also recently wrote to Lamont to signal its support.

A recent poll of eastern U.S. states found that 70% of voters support the program.

State officials said on a call with reporters that they anticipate more states could sign the final TCI MOU in the coming months and said that even with fewer participants, the program would produce significant environmental and health benefits.

The four signatories anticipate collecting a total of approximately $2.3 billion in proceeds from the auctioning of emissions allowances between 2023 and 2032, at least 35% of which would be steered to underserved communities, the officials said.

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1 Comments

Anonymous
December 22, 2020

In light of this initiative, the cT Legislature should allow electric car companies, I.e. Tesla, to sell cars in CT!!

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