Anne Watson: Transportation & Climate Initiative would be a win for Vermont

Editor’s note: This commentary is by Anne Watson, mayor of Montpelier.

Vermont has an opportunity to make an investment in our local economy and make a substantial reduction in our state’s greenhouse gas emissions by joining a regional program called the Transportation and Climate Initiative (TCI). Transportation is the largest source of climate pollution in Vermont, and TCI may be a way for us to both reduce our greenhouse gas emissions and improve our economy. How is it that I can say that with any degree of certainty? There are similar models across North America with successful results.  

TCI is a cap-and-invest program similar to the Regional Greenhouse Gas Initiative (RGGI) that Vermont participates in to reduce carbon pollution from electricity generation. In 2005, Republican Gov. Jim Douglas signed on together with six other Northeast states. Vermont is still a part of it today, and it has been successful in multiple ways. Analysis from Acadia Center shows that since 2008: 

  • GDP of the RGGI states has grown by 47%, outpacing growth in the rest of the country by 31%;
  • Electricity prices in RGGI states have fallen by 5.7%, while prices have increased in the rest of the country by 8.6%;
  • RGGI states have generated $3.4 billion in allowance auction proceeds, the majority of which have been invested in energy efficiency and renewable energy programs, including incentives for advanced wood heat and solar panels;
  • CO2 emissions from RGGI power plants have fallen by 47%, outpacing the rest of the country by 90%.

TCI is intended to build on this successful model, but target our most polluting sector: transportation. TCI would require large distributors of diesel and gas to buy carbon “allowances” in an auction to account for the carbon emissions from the fuels they sell. Revenues raised from these auctions would go to states to fund programs that would ultimately reduce the demand for fossil fuels in the transportation sector and reduce transportation costs for Vermonters. This could be direct rebates to low-income residents, increased EV rebates, funding for EV charging stations, or increased access to public transit, to name a few examples. 

Since Vermont doesn’t produce or refine any petroleum, and 70% of the money Vermonters spend on transportation fuel leaves the state, Vermont is currently bleeding money through its transportation spending. If we’re able to reinvest some of our own money into reducing the demand for fossil fuels, that means there will be more money available to circulate within the Vermont economy. That could offer real value to low-income earners. TCI can and must be designed to mitigate the impacts to low-income and rural Vermonters. We can alleviate the energy burden through using the generated revenue to benefit targeted communities by reducing their transportation costs, providing new and improved transportation services, or even through direct rebates.

Again, we have done this before. We have a successful model in RGGI. Most of the RGGI states have instituted programs to ensure that RGGI proceeds serve low-income consumers. Some states provide energy bill rebates to low-income households. Some have RGGI-funded energy efficiency programs that serve low-income consumers. In California’s cap-and-invest program for transportation fuel, they set aside revenue for what they define as priority populations, including disadvantaged communities and low-income households. At least 35% of their proceeds must benefit these populations, and at least 25% of their proceeds must be invested in projects located in those communities. These equity principles will be important to ensure that TCI is designed to benefit underserved communities and deliver benefits where they’re needed most.

We have far too much at stake to miss this important opportunity. Since Vermont is just one of 12 states that are considering joining TCI, and our petroleum passes through these surrounding states, it’s very possible that our gas prices in Vermont will go up regardless of whether or not we join. We could either join and benefit from the collected revenue or we could simply be stuck paying the increased price without seeing any returns. Sitting on our hands will cost us, while proactive leadership will help Vermont thrive. 

Many Vermonters understand that joining TCI would be a good move. The Winooski City Council specifically endorsed TCI through a resolution. To quote a statement from VPIRG: “Of the 353 comments submitted by Vermonters through the Scott administration’s TCI portal between April 2019 and February 2020, more than four out of five comments (83%) support the initiative.” 

Vermont, led by the governor, should move forward on TCI, for many reasons, including that signing on is the fiscally responsible thing to do. Our current transportation infrastructure is outdated and insufficient. The current failures of our transportation system exacerbate social and environmental injustices, and TCI may be a real way to help alleviate these injustices. It will keep more money in Vermont and model for the country how a rural economy can successfully reduce its carbon emissions. I look forward to seeing that happen when Vermont moves forward with this critical initiative. 

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