State-level carbon tax climate agreement 'having a hard time getting off the ground'

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An interstate carbon tax agreement promoted as having 13 mid-Atlantic and Northeastern members appears shaky after the Connecticut legislature snubbed the idea in September, leaving as the only committed jurisdictions the District of Columbia and Massachusetts, though the Bay State faces a possible ballot initiative against it.

While officials from 10 other states have been in discussions to enter the Transportation and Climate Initiative, or TCI, only then-Rhode Island Gov. Gina M. Raimondo, Massachusetts Gov. Charlie Baker and Connecticut Gov. Ned Lamont joined D.C. Mayor Muriel Bowser in signing a memorandum of understanding in December to implement the plan.

The cap-and-trade initiative would require vehicle fuel suppliers in participating jurisdictions to buy energy allowances for CO2 emissions. The volume of allowances for sale will decrease each year, meaning fuel suppliers will pay more each year for emissions.

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Proponents say this will cut greenhouse gas emissions by 26% from 2022 through 2032, and bring $3 billion in revenue for the next decade. Opponents say it will drive up fuel prices for consumers and is a regressive fuel tax. With regards to a regressive tax, proponents contend that signatories would dedicate at least 35% of revenue to transportation needs in underserved communities.

Baker, a Republican, unilaterally entered the agreement under the Bay State’s law requiring emission reductions. The other two New England states, both with Democratic governors, require legislative approval to seal the deal, and lawmakers in each state balked.

Massachusetts Gov. Charlie Baker (AP)

The idea was launched in 2010 when environmental officials of these jurisdictions, as well as  Delaware, Maine, Maryland, New Hampshire, New Jersey, New York, Pennsylvania and Vermont, signed onto a "declaration of intent," though not directly committing to actions. Environmental officials from North Carolina and Virginia later announced support without making commitments.

"It’s fair to say TCI is having a hard time getting off the ground. However, the program was designed to be basically like a zombie. It dies and comes back to life," Paul Craney, spokesman and board member for the Massachusetts Fiscal Alliance, which opposes the agreement, told Fox News.

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"It was first rolled out that a dozen states were doing it, saying everyone is going to have shared pain for environmental benefit because you’ve got some big states mixed in there," Craney added. "Then we learned in December, it was three states. Now it’s one that is fully committed." 

If Massachusetts fully enters the agreement by 2023 as scheduled, about 80,000 vehicles in the state will not have enough fuel by 2025, according to an analysis by the Massachusetts Fiscal Alliance Foundation in August. To avoid a major fuel shortage later, the analysis says, Massachusetts drivers would now have to swap their gas-powered vehicle for an electrical vehicle at a rate of about 2,000 electric vehicles per month. But only about 2,000 electric vehicles were sold in Massachusetts during the entire calendar year of 2020. 

Transportation for Massachusetts, a coalition of Massachusetts environmental groups, opposes the ballot initiative to leave the agreement. 

"The ballot question proposed by TCI opponents threatens our environment, our health, and our transportation. But that’s not all," the group says in a statement. "This poorly drafted, overly broad petition could threaten any policy or revenue source designed to eliminate pollution from transportation. That includes both existing revenue sources and potential future policies which benefit families and communities most burdened by transportation pollution." 

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In neighboring Vermont, Republican Gov. Phil Scott expressed skepticism in August during a Zoom meeting of the New England Council.  

"I wasn’t seeing how this could work for Vermont and I am not convinced today that it works for Vermont," Scott said, later adding, "I feel good about the direction we are going without the need to raise taxes and certainly not a regressive carbon tax." 

Although the Rhode Island legislature recessed this summer without adopting the TCI, the Senate passed the measure without House support, and current Gov. Daniel McKee, a Democrat, is "totally committed" to the agreement entered by his predecessor, said Mike Healy, a spokesman for the Rhode Island Department of Environmental Management.  

"Governor McKee supports efforts under TCI to address climate change and improve public health, and is actively in conversations with Governors Lamont and Baker on this initiative," Healey told Fox News in a statement.  

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"The Department of Environmental Management continues to engage legislators, environmental and equity advocates, and other stakeholders to discuss the benefits of TCI and why putting the brakes on air pollution and accelerating innovation in cleaner transit and healthier communities are so important to Rhode Island," Healy continued. "We are very hopeful that both houses of the legislature will take the issue up early in the 2022 session, pass the bill, and present it to the governor for signature."