Gov. Chris Sununu of New Hampshire has announced the state will not participate in the Transportation and Climate Initiative (TCI), a regional association of state governments pledging to reduce carbon dioxide emissions from the transportation sector.
In a December 17 tweet, Sununu said he “will not force Granite staters to pay for gas just to pay for other state’s [sic] crumbling infrastructure.”
“Under this scheme, NH drivers would be forced to pay a significant new gas tax with little environmental benefit to NH,” Sununu’s tweet continued. “Rural communities would be left at a severe disadvantage if we participated in the TCI, as drivers will bear the brunt of artificially high gas prices.”
Sununu’s announcement came shortly after TCI officials released a draft memorandum of understanding (MOU) outlining the group’s goals once it starts functioning this spring.
The MOU sets a goal of reducing transportation emissions in the Northeast and Mid-Atlantic regions by 20 to 25 percent over the next decade. Caps on emissions would drive up the price of gasoline by 5 to 17 cents per gallon if fuel suppliers pass on the cost to consumers.
Cap and Trade Scheme
TCI would require transportation fuel suppliers, or wholesalers bringing fuel into a TCI state, to purchase allowances per ton of carbon dioxide the fuel produces. The total number of allowances would be limited under a regionwide cap. Fuel suppliers would buy allowances through an auction, and the allowances could be traded, with the price depending on the market.
Officials estimate TCI could bring in $7 billion per year in revenue for participating states, with proceeds dedicated to what are referred to as “clean energy investments,” such as electric-powered public transit.
States currently slated to participate in TCI include Connecticut, Delaware, Maine, Maryland, Massachusetts, New Jersey, New York, Pennsylvania, Rhode Island, Vermont, and Virginia, as well as the District of Columbia.
‘Sununu Made the Right Call’
A coalition of business groups and research institutes signed a letter calling on governments not to participate in TCI, saying it would increase energy costs.
“We do not believe that driving to and from work, transporting children to school, transporting goods, going to the grocery store, and all the other necessary activities that generally require a vehicle should be treated by governments as a sin,” the coalition letter states. “These are not activities that people can, or should be forced to, avoid.”
Sununu was looking out for New Hampshire’s residents, says David Stevenson, director of the Delaware-based Caesar Rodney Institute’s (CRI) Center for Energy & Environmental Policy. CRI was among the groups signing the coalition letter.
“Gov. Sununu made the right call,” said Stevenson. “TCI would raise gasoline prices by up to 17 cents a gallon for a mere 1 percent to 6 percent reduction in carbon dioxide emissions.
“The gas price increase could total $225 per family per year, for a cost per ton of emission reductions topping $3,500,” Stevenson said. “For comparison, the latest auction price for emission credits under the Regional Greenhouse Gas Initiative (RGGI) is about $6 per ton. The decade-old RGGI program didn’t reduce emissions, so why would we expect TCI to work any better?”
‘Debatable Environmental Benefits’
The environmental gains from cap and trade programs are not worth the high costs they impose, says Tirzah Duren, a policy analyst with Pennsylvania’s Commonwealth Foundation.
“Both RGGI and TCI are excessive restraints on energy supplies that Americans depend on to do basic things like heat their homes and drive to work,” said Duren. “The debatable environmental benefits of these initiatives do not justify the increased expense they place on average people’s shoulders.
“New Hampshire has realized this, and other states, including Pennsylvania, should follow its lead by rejecting TCI,” Duren said.
Bonner R. Cohen, Ph.D. ([email protected]) is a senior fellow at the National Center for Public Policy Research and a senior policy analyst with the Committee for a Constructive Tomorrow.
Carol Platt Liebau et al., “TCI Opposition Letter,” December 11, 2019: https://heartland.org/publications-resources/publications/tci-opposition-letter