Politics

Walters: A tale of two governors: Scott, Baker and TCI

Gov. Phil Scott delivers his State of the State address to a joint session of the Legislature Jan. 9. Photo by Glenn Russell/VTDigger

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. 

Massachusetts Gov. Charlie Baker. Wikimedia Commons photo

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. 

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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. 

Sarah Copeland Hanzas
Rep. Sarah Copeland Hanzas, D-Bradford. Photo by Mike Dougherty/VTDigger

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.

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John Walters

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Laura Stone

Please tell us where you are getting this figure of this raising our gas prices only 4 to 5 cents per. gallon. I have heard two interviews now with Gov. Sununu, one to the state and one on Howie Carr’s show where he said the same thing twice, this would be .17 per gal. and then he said this was sure to rise “And what are the people going to do when this thing hits .25 a gallon-where does this end??”
Which is why he calls it a financial boondoggle..
Are you suggesting that the Governor does not know what he’s talking about?
OR does the article intend to mislead the readers about this cost by making it appear less that it will be in reality?

Job Tate

Spoiler alert: this is really the tale of geography and two vastly different economies.

John McClaughry

Peter Walke now admits that the TCI hasn’t decided “who has to buy the “allowances”, the key part of the TCI plan. At the ANR info meeting in December, he said that the “position holders” (fuel distributors) would have to pay (and pass the cost on to motor fuel users). That was assuming VT signed on to TCI. But what if VT, like NH, stays out? Will the “regulated terminals” in MA and NY be made to buy the allowances due (3 years further on) from their VT and NH customers? If so, that will raise the price paid by those distributors, and VT and NH motorists will pay the carbon tax even if their states refuse to participate. And of course, no revenues would come back to those non-participating states. And what of Valero and Irving, whose gas and diesel fuel comes in from Canada? Will TCI make the Canadians pay? Or will those companies be able to sell (allowance-free ) fuel in Vermont at a price below their competitors buying from the NY and MA terminals? TCI is a colossal stinker.

Robert Roper

“If Massachusetts and New York are in TCI, would terminals offer a lower price to Vermont? It’s in their control,” said Walke.

Thank goodness one of those terminals is in Portsmouth, NH, and NH ain’t participating. Some VT distributors get their gas and diesel from terminals in Canada and, again, not participating.

Finally, if MA and NY etc did form a coalition and forced non-participating states to pay higher prices, it would certainly be challenged in court as an interstate tariff, unconstitutional under the interstate commerce clause.

The difference between Scott and Baker is that MA passed a decade or so ago what VT is contemplating right now: Mandated GHG reduction goals (STUPID!). Baker is under threat of lawsuit if he doesn’t “do something” and TCI, as he sees it, is the least damaging option politically and economically. Scott has the luxury of seeing TCI for what it is: a regressive carbon tax that’s horrible for a rural state. He’s promised to veto a carbon tax.

Tom Koch

Governor Scott is not simply opposing action because of short-term costs; he’s looking for long-term solutions that actually work and don’t penalize Vermonters for not being like residents in more urban states. TCI, whether we’re in it or not, will be controlled by unelected regulators from other states. They will determine how much the price of a gallon of gas will go up and how much Vermont will get back after the costs of administration are deducted. And unlike residents of Boston or the metropolitan New York City area, Vermonters who need to drive to work—or anywhere else—will not be able to make significant changes in their driving patterns. In the end, this effort to bludgeon Vermonters into solving the problem of climate change will be an expensive failure.

Kim Fried

Sure am glad that we have a Governor that doesn’t make critical decisions on legislation that continues to have “a lot of uncertainties”. Maybe some of the other legislators could follow this very reasonable approach as opposed to today’s”ready shoot aim” we’ll try to deal with the unanticipated consequences some time in the future, maybe.

Kenny Keith

To begin with, if one follows Massachusetts politics at all they would know that Charlie Baker is a RINO through and through. At least Scott is on the right side of this one. The TCI is another boondoggle just waiting to be unleashed onto a unsuspecting public once again making everyone’s wallet lighter. When do programs like this ever produce the outcomes that are predicted, Answer: Never. If you really believe that the climate is in crisis and we just have to do something start protesting at the Chinese and India’s embassies and ask what their plan is. If you really believe with your heart of hearts that we are all going to perish in less than 12 years due to climate change please include me in your will I’ll be here, after all I bet the farm on it.

james_Baker

The difference between Scott (Vermont) and Baker (Massachusetts) is Baker can extort more money from taxpayers because of the better economy. Who would believe that Taxachusetts has a lower total tax burden then the Peoples Republic of Vermont.
With all that said, Clearly Gov. Sununu is the only clear thinking Governor in the bunch! Chris Sununu, has called TCI “a financial boondoggle” and declared that he’s out.
Look at New Hampshire’s economy compared to VT…. Pathetic

Randall Bates

WHY the push to punish citizens in the lowest emitting State? We all need to be good stewards of the environment however considering Vermont’s total emissions, low, there are more common sense things that can be done without making Vermont even more of an expensive place to live and do business.

Alan Teague

“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,” – Rep. Sarah Copeland Hanzas
Where will the capital come from to change to an electric economy? Not just cars, boiler, etc., but also infrastructure to move that extra electricity? Most of Vermont, NH, and Maine can sequester GHG’s with the exception of some minor metropolitan areas so maybe a carbon tax on Chittenden County or Rte. 1 corridor to north of Portland ME, or in NH from Manchester south. These are all areas where public transportation can work and that is where the benefits will be the most efficient while leaving the rural economy alone.

Mark Higley

Massachusetts GWSA looking for 3200 MW of off shore wind. If they were similar to Kingdom Community Winds towers @ 3 MW each unit, that would be 1066 units. They are still trying to get power from Hydro Quebec through Maine. They need TCI because there emission from transportation are going up. They were looking for 300,000 new EV vehicles by 2027. As of 2015 the number is 15,111. They do not allow any Biomass electric generation facilities that burn wood chips. Massachusetts population 6.9Million. Vermonts population 626,299

Learning more each day. We need to be aware of our geography and economy compared to other states.

Tim Vincent

TCI AKA carbon tax, minimum wage increase, paid family leave.
Add all these up and you get………a significant increase in the cost of living in Vermont.

Does anyone think that the grocery chains will pay for family leave , increased cost of goods (which all come by truck) and an increase in hourly wages by reducing their profits?

The minimum wage beneficiary will pay more in gas to get to a grocery store where the prices will be seriously higher.
And that’s just ONE example of the results from “feel goodism.”
“Vermont’s economy may be wiped out, but I still feel good about stopping global warming.”
Oh and BTW, ignore the thousands of coal-fired power plants in China and India.

Gary Cassady

Both Scott, Baker et al., miss the point entirely. Scott talks about his fear that TCI will increase costs to Vermonters and disproportionately, lower income citizens which is certainly true, but the debate should be this:
States must retain the right and responsibility to control the purse strings of it citizens. The only exception to this is when duly elected representatives in the U. S. Congress impose fiscal demands that every states’ citizens must pay for.
So, these multi-states “commissions” answerable to no one, yet fiscally impactive to everyone would exist outside these parameters and thus, I believe should be simply unconstitutional.

Shayne William Spence

Vermont’s carbon emissions have decreased for the first time in recent history under Governor Scott. Why would the Governor abandon his most consistent stance of all, against broad-based taxes, in the name of emissions reductions when current policy is already working to do so?

 

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