Mass. could reap over $500M from regional emissions pact
The pact being developed by Massachusetts and other East Coast states to cap carbon emissions from vehicles could add up to 17 cents to the price of a gallon of gas, according to the newest estimates, but could also generate more than $500 million in revenue for state government in Massachusetts.
Leaders from a coalition of eastern states, including Massachusetts, have been working for over a year to develop a regional "cap-and-invest" program to reduce carbon pollution from cars and trucks and generate the resources needed to expand clean transit options and improve public health.
The effort, known as the Transportation Climate Initiative, has also become a central part of Gov. Charlie Baker's transportation and climate agenda, with the administration proposing to earmark half of all proceeds generated toward improving public transit.
But the coalition already began to splinter Tuesday in light of the newly forecast economic impacts, with New Hampshire Gov. Chris Sununu announcing that his state would not participate.
"We are already taking substantial steps to curb our carbon emissions, & 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 NH will never support it," Sununu wrote on Twitter.
The coalition, chaired by Massachusetts Energy and Environmental Affairs Secretary Kathleen Theoharides, released a draft memorandum of understanding on Tuesday that states would be asked to sign onto next spring once it is finalized.
The officials involved in the effort are eyeing a reduction in emissions of up to 25 percent by 2032, but it will come at a cost.
States in the coalition are exploring three scenarios for capping emissions from motor gasoline and on-road diesel, with a final cap proposed after a public comment period ends on Feb. 28.
The plan to reduce carbon emissions from vehicles by 25 percent would add an estimated 17 cents to the price of a gallon of gas at the pump starting in 2022. If states elected for a smaller reduction goal of 22 percent, the cost per gallon, based on the group's modeling, would drop to 9 cents.
The third option presented is for a 20 percent emission reduction by 2032 at a cost to drivers of 5 cents per gallon.
The new economic forecasts also figure to play heavily into the upcoming debate that House Speaker Robert DeLeo has planned for January to generate new revenue for transportation. Several of his top deputies have suggested a gas tax hike would be high on the list of options.
While a straight gas tax hike may be less popular with business leaders, TCI has significant backing from many of the major environmental and employer groups in Massachusetts, including Associated Industries of Massachusetts and the Greater Boston Chamber of Commerce.
Transit activists also see an opportunity in the program to generate significant new resources to invest in improved public transit and build new sidewalks and bicycle paths. The concept, however, has been coming under increasing fire from a small group of Republican legislators and small business groups.
The TCI coalition states represent 72 million people and 52 million registered vehicles, with a gross domestic product larger than the economy of California at $5.3 trillion.
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