What the Northeast Could Build With a Transportation Cap and Invest Program

, policy analyst | September 15, 2017, 5:40 pm EDT
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While the Northeast region struggles to make significant progress in reducing pollution from transportation, our neighbors and allies in California and Canada are investing billions of dollars in clean mobility solutions thanks to their successful implementation of a cap and invest program covering transportation emissions.

Today California finalized its plan to invest over $2 billion over the next year on initiatives designed to reduce our use of oil and pollution from transportation. These investments will make it easier for California residents to purchase an electric vehicle, or to save money by trading in an old gas guzzling car for an efficient conventional vehicle or hybrid. They will improve public transportation services, both in California’s big cities and its small towns and rural counties. They will provide more affordable housing in communities near public transportation. And they will create jobs, reduce emissions, and save consumers money.

Meanwhile, our neighbors in Ontario and Quebec are projected to spend $2.1 and $1.9 billion respectively on clean transportation programs by 2020.

These jurisdictions are making investments on a far greater scale than anything currently happening in any state in the Northeast. They are able to do so because unlike the Northeast, California, Ontario, and Quebec have enacted a comprehensive climate policy that establishes enforceable limits on pollution from transportation, holds polluters accountable for their emissions, and provides a dedicated funding source for clean transportation investments.

This policy, known as “cap and trade” but which could be more accurately called “cap and invest”, is run through the increasingly misnamed “Western” Climate Initiative (or WCI), an international carbon market that now limits emissions in a region covering over 60 million people in the United States and Canada.

Cap and invest is not new to the Northeast. Under the Regional Greenhouse Gas Initiative (or RGGI), the Northeast established the first market-based limit on pollution from power plants, and used the funds generated by the program to invest in efficiency and clean energy. Thanks in part to this policy, Northeast states have dramatically reduced pollution from electricity. Unfortunately, the Northeast states have yet to take the next logical step and enact a similar policy to limit emissions from transportation, which is now the largest source of pollution in the region.

As a result, Northeast states are missing out on an opportunity to make investments that will reduce pollution, save consumers money, increase economic growth, create jobs, improve public health, and reduce our use of oil. If the Northeast had a program similar to WCI covering transportation pollution, it could raise up to $4.7 billion every year for clean transportation initiatives in the Northeast.

Here are some of the things that we build in the Northeast with a cap and invest program:

Better transit

Unlike diesel and natural gas vehicles, electric trucks and buses, like the BYD articulated bus pictured here, produce no hazardous exhaust emissions.

At a time when we need to be making transformative investments in public transportation, the transportation agencies tasked with maintaining and expanding our public transportation systems are broken. While public transit use is near an all-time high, a variety of factors including inflation and increasing fuel efficiency are reducing real gas tax revenues. Limited transportation funding has led to several well publicized transit failures in New York City, Boston, New Jersey, and other cities in the Northeast.

State

Revenues at $14.75 per ton 

(million$)

Transit (48%)

Sustanable Communities (26%)

Clean Vehicles (26%)

Connecticut 246.33 118.24 64.04 64.04
Delaware 67.85 32.57 17.64 17.64
D.C. 17.70 8.50 4.60 4.60
Maine 143.08 68.68 37.20 37.20
Maryland 452.83 217.36 117.73 117.73
Massachusetts 469.05 225.14 121.95 121.95
New Hampshire 109.15 52.39 28.38 28.38
New Jersey 954.33 458.08 248.12 248.12
New York 1181.48 567.11 307.18 307.18
Pennsylvania 983.83 472.24 255.79 255.79
Rhode Island 66.38 31.86 17.26 17.26
Vermont 53.10 25.49 13.81 13.81
Total 4745.08 2277.64 1233.72 1233.72

Almost half of the transportation funding from California’s program will go towards improving public transportation services in the state. The long list of programs and projects that will be funded (at least in part) from California’s climate program includes transit expansions in every major metro region, high speed rail, bus service improvements in dozens of small towns and rural counties, replacement of diesel buses with electric buses, and programs to provide low or reduced fares for low income residents and college students.

Clean vehicles

Both California and (most) Northeast states offer rebates to make electric vehicles more affordable for drivers but California’s programs are larger, more comprehensive, and more specifically target moderate and low-income drivers. For example, low-income drivers who trade in a gas guzzler for an electric vehicle can qualify for a rebate of up to $14,000 through the state’s Enhanced Fleet Modernization Program.

California is also expanding their efforts to provide vehicle financing assistance to help residents who lack the credit to purchase or lease clean vehicles. These investments have helped California achieve electric vehicle sales numbers six times higher than the Northeast.

California also provides a rebate of up to $110,000 for businesses that replace diesel buses and trucks with zero-emission vehicles, which can have a dramatic impact on air quality in low-income communities. Finally, California is using funds from their climate program to build electric car-sharing networks in Los Angeles and Sacramento.

Sustainable communities

People want to live in communities with access to multiple transportation choices, if they can afford it. But rising demand and limited supply for transportation-accessible housing is contributing to a housing affordability crisis that is impacting every major metropolitan area in the Northeast. Five of the eight metro areas with the highest monthly rent in the United States are located in the Northeast; the other three are in California.

High housing costs have enormous implications for racial and economic equity. The cost of housing also has a significant impact on climate emissions. As families find themselves unable to afford communities with strong transportation choices they are forced to relocate to communities with cheaper rent but higher fuel consumption.

California has spent over $700 million to date from their climate program on affordable housing and sustainable community programs. The largest of these programs is the Affordable Housing and Sustainable Communities program (AHSC), which provides grants for affordable housing and bike and pedestrian infrastructure projects that reduce global warming emissions. In the most recent year in which data is available, AHSC-funded projects created 2427 affordable housing units near transit that will reduce emissions by over 800,000 metric tons.

Pollution from transportation is the largest source of emissions in the Northeast region, responsible for over 40 percent of our total emissions. Solving this problem is going to require bold new policies to transition our transportation system away from gas guzzling automobiles towards electric vehicles, transit, and sustainable communities. Cap and invest is a policy model that has been proven to be effective, in the Northeast under RGGI, and as a strategy to reduce transportation emissions in California, Ontario and Quebec. We encourage the Northeast states to consider adopting this model as a key component of our strategy to promote clean transportation in the region.

Posted in: Uncategorized, Vehicles

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