Connecticut, Massachusetts, Rhode Island and D.C. signed a memorandum of understanding Monday to launch the Transportation and Climate Initiative Program (TCI-P), which aims to cut greenhouse gas emissions from vehicles by 26% from 2022 to 2032 and invest $300 million per year in cleaner transportation choices and public health improvements.
A cap-and-invest program, TCI-P will require large gasoline and diesel fuel suppliers to purchase allowances for the pollution and later auctioning them, which officials said will generate $300 million for yearly investments in less polluting transportation. Each year, the total number of emission allowances would decline.
“Joining the Transportation and Climate Initiative is an investment in Rhode Islanders,” Gov. Gina Raimondo said in a statement. “This first-of-its-kind program will provide $20 million annually for public transit, safe streets for bikers and pedestrians, and other green projects. … I look forward to working with the Rhode Island General Assembly to launch this program and protect the health of Rhode Islanders.”
TCI-P projects carbon allowance prices beginning at nearly $6.60/metric ton in 2023 and rising to almost $12.50 in 2032, including inflation. In 2023, if allowance prices fall below $6.50, the emissions containment reserve (ECR) would tighten the cap by up to 10% to take advantage of the opportunity to reduce emissions at a lower-than-expected cost. If allowance prices rise above $12, the cost containment reserve (CCR) would release additional allowances equal to up to 10% of the cap to mitigate higher-than-expected prices.
The states and D.C. also committed to investing a minimum of 35% of their proceeds, nearly $100 million each year, to ensure that communities underserved by the transportation system and overburdened by pollution benefit equitably from clean transportation projects and programs. The program would designate advisory bodies to identify underserved and overburdened communities, provide investment guidance and measure progress toward goals. Members of the advisory bodies would be representative of the underserved and overburdened communities.
Eight other states signaled in a statement that they would work with the MOU signers on the program’s development while pursuing state-specific initiatives to reduce emissions and provide clean transportation solutions. As part of the Transportation and Climate Initiative (TCI), Delaware, Maryland, New Jersey, New York, North Carolina, Pennsylvania, Vermont and Virginia actively participated in developing the program and can join it in the future. If all the TCI states eventually choose to implement the program, the amount available annually for investment could exceed $2 billion.
Massachusetts Gov. Charlie Baker said in a statement: “By partnering with our neighbor states with which we share tightly connected economies and transportation systems, we can make a more significant impact on climate change while creating jobs and growing the economy as a result. Several other Transportation and Climate Initiative states are also committing to this effort today, and we look forward to these partners moving ahead with us as we build out this first-in-the-nation program.”
“By working together across our borders at the state level, we can take on the greatest challenges posed by climate change,” D.C. Mayor Muriel Bowser said in a statement. “Through this multijurisdictional commitment, we will cut pollution, improve health outcomes and deliver much needed investments for our most vulnerable communities.”
Added Connecticut Gov. Ned Lamont: “Participating in the TCI-P will help grow our economy through a fresh injection of capital to provide for jobs and new infrastructure. This collaboration will cut our greenhouse gas emissions, and it will make our urban centers healthier after decades of being adversely impacted by the emissions being released by traffic every day.”