Northeast Reaches Major Milestone to Reduce Emissions and Raise Revenue for Transportation, but Much More Work Remains

December 21, 2020 | 1:56 pm
A bus at a bus station with a curved canopyPi.1415926535/Wikimedia
Maria Cecilia Pinto de Moura
Senior Vehicles Engineer

A collaboration of Northeast and Mid-Atlantic jurisdictions just signed the final Memorandum of Understanding (MOU)  for the Transportation and Climate Initiative Program (TCI-P) This program sets a much-needed limit on emissions from burning dirty transportation fuels in the region and brings in revenue for the participating jurisdictions.

Exactly two years ago, a group of nine states and the District of Columbia announced their intent to design a new landmark clean transportation program that would set a cap on carbon dioxide emissions from gasoline and diesel. This was to be remembered as a ground-breaking moment for transportation in the region, since for the first time Northeast and Mid-Atlantic jurisdictions started working together to address emissions from transportation in a concrete way.

The 2018 agreement was the start line of a long journey, and one year later a draft MOU was signed in the region. The just-released final MOU means the region is a few laps closer to achieving a modern and equitable transportation, but is still very far from the finish line.

What will a TCI program look like?

Today’s announcement defines important design elements for the program. It lays a solid foundation for a program that will continue to grow and improve. The cap requires a 30% reduction of fossil-fuel carbon dioxide emissions from 2023 to 2032 for motor gasoline and on-road diesel, based on the initial 2023 base annual CO2 emissions budgets for the jurisdictions, and declines by equal amounts every year. This cap is slightly more ambitious than the initial range of 20 to 25 percent for the 2022-2032 period considered in preliminary studies. Using a 2022 base year, the cap amounts to a 26% reduction, as emissions are assumed to be higher in 2023 compared to 2022. One of the program’s greatest benefits for the states and for people in the region will be the revenue from the auctions, which will be used to make investments in clean transportation. The cap is slated to start in 2023, which is also when states should start receiving revenue. This revenue has been estimated to be at least an annual $8.5 billion for the region by 2032.

As of today, Connecticut, Massachusetts, Rhode Island and the District of Columbia have committed to participate in the program. Jurisdictions that have not signed on have stated  that they will continue to collaborate in the TCI process.

Most people in the region are in favor of TCI

A recent survey shows that a majority of people in every TCI state support their state joining the program. The vast majority – seven out of every ten people – say that their state should join as part of the COVID-19 recovery, as the TCI program will help jumpstart their state’s economy and will create new good-paying jobs, while reducing air pollution.

The survey demonstrates broad support for directing TCI proceeds to a variety of projects, from road and bridge maintenance, improving the reliability of public transit, improving walkability and public health, expanding high speed communications and Internet to rural communities and to those who can least afford this essential service, replacing older buses with new electric ones, adding new bus routes and train lines in locations that don’t currently have access to public transit, and providing consumer rebates and incentives to purchase cleaner fuel vehicles like electric vehicles (EVs).

TCI benefits will be tangible for states and for people

Setting a limit on carbon dioxide emissions will help the region achieve its climate goals, an important effort, given that transportation in the region accounts for over 40% of the greenhouse gas emissions. These emissions are accelerating global warming, threatening our coastal communities with sea-level rise, increasing the frequency and intensity of devastating extreme weather events and reducing biodiversity.

Furthermore, reducing gasoline and diesel consumption from vehicles has the additional benefit of reducing local air pollution which prematurely kills over 3 million people in the world every year. A multitude of studies has shown that breathing dangerous fine particulate matter (PM2.5) has extremely negative health impacts such as heart disease, pulmonary diseases and cancer, among other diseases. Two trailblazing studies have shown that exposure to air pollution increases the likelihood of dying from COVID-19 (Harvard study, University of Birmingham study).

These miniscule and deadly particles emitted from vehicle tailpipes have also been shown to be distributed inequitably among racial groups in the U.S.  A recent UCS study showed that people of color in the Northeast and Mid-Atlantic TCI jurisdictions are exposed to air polluted with a concentration of PM2.5 that is 66% higher than the exposure of white people.

Studies show emissions reduction are only one part of the benefits. TCI will provide tangible net economic and social benefits for people, businesses, and communities in the participating jurisdictions. For instance, a Harvard study from the Transportation, Equity, Climate and Health (TRECH) collaboration showed that for a 25 percent emissions cap, slightly lower than the cap to be adopted by the program,  local air quality improvements from electrification of vehicles and transit expansion, and improved health from walking and biking, among other strategies, can avoid 1100 deaths in the region in 2032, as well as 4,700 annual cases of childhood asthma that same year. Families will benefit not only from improved health but also from reduced health costs.

The same TRECH Harvard study mentioned above estimated that in 2032, at a cap level of 25 percent, over $11 billion could be saved in the region from the health improvements resulting from a TCI program, savings that are even larger than the estimated annual TCI auction proceeds of $8.5 billion for that cap level. The program would have a positive impact on the region’s GDP, income and jobs.

The proceeds from TCI program investments in clean transportation can drive additional regional emissions by putting up to 44,000 transit buses, 42,000 school buses and 84,000 electric trucks on the road by 2032. Regionwide investments of over $1 billion annually could be made for bus service and transit improvements, and up to $5.6 billion through 2032 for bike lanes and sidewalks.

While averaged benefits are important, it is also critical to make sure that benefits reach all communities, particularly those overburdened by transportation pollution and with limited or inexistent access to transportation options. To address this concern, participating TCI jurisdictions have committed to investing at least 35% of its proceeds for dedicated transportation investments in underserved and overburdened communities, as well as mandatory commitments to transparency and equitable processes.

While we appreciate these commitments, the 35% share should be the absolute minimum, as stakeholder feedback has repeatedly stated. Each jurisdiction should reassess these commitments to make sure the funding percentage meets or exceeds the share of the population that falls under the category of overburdened and underserved. States should also design safeguards to guarantee that the funds cannot be redirected.

Are we there yet?

Much effort has gone into negotiating and drafting this final MOU for TCI. Since 2018, dozens of state officials have facilitated listening sessions and workshops with thousands of stakeholders across the region, ensuring that a broad spectrum of voices were heard. There have been over 4300 submissions to the TCI public input portal, representing the views of over 10,000 people. Much learning has emerged from this long and winding road. TCI has learned from its own 2-year experience developing the program but has also had the benefit of building into the program elements that similar cap-and-invest programs (such as the California program and the Northeastern electricity sector program), did not add until much later down the road.

There have been several complex studies by research teams, with Georgetown University and Harvard University leading policy and economic analyses, and analyses on the public health impacts of the program. The latest modeling study of the TCI program took into account aspects of the impact of the recession caused by COVID-19, but also brought to light the difficulties of designing such a program in the midst of so much uncertainty.

The journey continues

This final MOU signals that the Northeast and Mid-Atlantic region has arrived at another important marking on the climate change and air pollution racetrack, but a TCI program is just the start. To build a clean, resilient, and truly equitable transportation system, investing the proceeds of the program must unquestionably be combined with complementary policies, but must also address land-use, the environment, and local economies. States have already started compiling complementary policies that aim to advance the goals of equity and environmental justice, but they should work directly with underserved and overburdened  communities to define further needs. The TRECH Harvard study (mentioned above) found that the TCI program leads to some reduction in air pollution inequity, but this resulting reduction is far from sufficient. This underscores the need for the TCI jurisdictions to continue to engage with overburdened communities. To build trust, state officials must listen to community input and adapt the policy to meet community needs. Next, a draft Model Rule for the program will be released which builds on the final MOU, and jurisdictions will be able to focus on their specific needs.

A TCI program that is consistent with equity principles, together with state-level complementary policies, can continue to lead the region’s economy, its climate mitigation, its public health, and its transportation system in the right direction.

Editorial Update, 12/21/20: The wording contained in the fourth paragraph of this blog was slightly modified to improve clarity.