John Walters is a political columnist for VTDigger. He also contributes to our daily Statehouse newsletter, Final Reading. Subscribe here.
On most issues, Vermont Gov. Phil Scott and Massachusetts Gov. Charlie Baker are closely aligned. Both are Republican governors who have remained popular in strongly Democratic states. Both are social liberals and fiscal conservatives. Both are frequent critics of President Donald Trump. But on a key climate-action program, they have taken two very different paths.
Baker is the head cheerleader for the Transportation and Climate Initiative, a multi-state compact designed to reduce carbon emissions and encourage renewably powered transportation by raising the cost of fossil fuels. Participating states range from Virginia in the Mid-Atlantic to Maine in the Northeast. “I get that this is going to be hard,” Baker said in his State of the State address, which focused heavily on climate issues. “But together, we have a real opportunity and a responsibility to achieve a significant reduction in transportation emissions.”
Scott, on the other hand, used his State of the State to throw cold water on TCI’s core concept. “I simply cannot support proposals that will make things more expensive for [Vermonters],” Scott said in a speech that included one brief passage on climate. TCI is almost certain to raise fuel costs. If it takes effect as scheduled in 2022, fuel distributors would pay a charge of 4 to 5 cents a gallon of gas, and the fees would increase over time. (It’s a fair bet that any charge would be passed on to consumers.) Revenues would be distributed to member states to spend however they wish.
TCI is not yet a final product. In December, the 12 participating states (plus the District of Columbia) agreed on a broad memorandum of understanding. Crucial details remain unresolved. A full agreement is expected to emerge this spring, when states will have to declare whether they are in or out.
One governor, New Hampshire Republican Chris Sununu, has called TCI “a financial boondoggle” and declared that he’s out. Other governors from both parties are taking a wait-and-see approach, including Democrats Janet Mills of Maine and Ned Lamont of Connecticut. Maryland’s Larry Hogan who, like Scott and Baker, is a popular moderate Republican in a blue state, remains committed to TCI but is withholding final judgment until all the details are set.
The Transportation and Climate Initiative is a multi-state coalition similar to the Regional Greenhouse Gas Initiative, which uses a regional carbon emissions cap on electric power generation. TCI’s launch in 2010 was followed by several years of research and information gathering. “It’s much more complicated than RGGI,” said Scott’s deputy natural resources secretary, Peter Walke, who is Vermont’s representative to TCI. That’s because most electricity is produced by a small number of regulated providers, while transportation is a broad, multifaceted activity.
The lengthy process culminated in December’s MOU, which agreement left four key aspects unresolved. “What fuels are covered, who has to buy carbon allowances, how the [carbon emissions] cap changes over time, and who gets what slice of the revenue,” Walke said.
That’s a lot of uncertainty, which is why most governors are uncommitted at this point.
There is one big factor to consider, and it might give Scott a back-door rationale for joining TCI. The charge on fossil fuels will be imposed, Walke said, at “the point of regulation” — which means at regional fuel terminals, all of which are outside Vermont. “If Massachusetts and New York are in TCI, would terminals offer a lower price to Vermont? It’s in their control,” said Walke.
That could allow Scott the wiggle room to endorse TCI despite his opposition to price hikes, because they’d likely happen either way. Baker has threaded a similar needle, endorsing TCI’s carbon pricing despite his continued opposition to raising his state’s gasoline tax.
Johanna Miller, energy and climate program director for the Vermont Natural Resources Council, said that alone is a compelling reason to stay inside TCI. “It’s essential we keep our foot in the door,” she said. “If we don’t, we have no say and are likely to pay the cost and not reap the benefits.”
Rep. Sarah Copeland Hanzas, D-Bradford, co-chair of the Legislature’s Climate Solutions Caucus, has another spin on the economic argument. “The best way to protect Vermonters from rising fuel prices is to fuel-switch them, because we regulate electricity prices. They’ve stayed relatively flat,” she said.
For now, Scott is keeping his options open. “The governor’s direction is to negotiate the best possible deal and let’s talk about it,” Walke said. “He wants to understand the potential costs and potential benefits.”
Walke’s agency is holding four public hearings on TCI, starting Wednesday in St. Johnsbury and Thursday in Manchester and continuing Feb. 6 in Burlington and Feb. 13 in Springfield.
Govs. Scott and Baker agree that climate change is real, and that action is required to limit its effects. Baker has seized the reins and adopted climate action as a central part of his agenda. Scott, by and large, continues to sit on the sidelines. In a way, it’s the least intellectually consistent stance of all. If you don’t believe in climate change, then it makes sense not to fight it. But if, like Scott, you agree that we face a climate crisis, and yet you continue to oppose action because of potential short-term costs, there’s a fundamental disconnect in your thinking.
In the Legislature, majority Democrats and Progressives are pursuing multiple policy ideas on climate, including TCI. They’re running short on patience. “We will not be deferring to the governor’s leadership on climate change until he starts showing some leadership,” said Copeland Hanzas.
