Last week, 5 Northeastern states along with Washington, DC announced their intention to explore a market-based program similar to the Regional Greenhouse Gas Initiative (or RGGI) to reduce emissions from transportation.
This is a great idea and I hope that Massachusetts joins these states in creating a strong regional program to cover transportation.
Why is this a great idea?
The short answer is that creating a market-based program like the Regional Greenhouse Gas Initiative in the transportation sector would help create a cleaner, more efficient transportation system for the region. In the process, we can create jobs, save consumers and businesses money, and drive economic growth.
According to the report issued by the Georgetown Transportation and Climate Initiative, when combined with existing state and federal policies, a market-based system could help reduce emissions by 40%, save consumers up to $72 billion and create over 90,000 jobs in the region by 2030.
The long answer requires a bit of background on the RGGI program and some of the core challenges facing the region in transportation and climate policy.
What is RGGI?
RGGI is a regional program created by a network of states in the Northeast and Mid-Atlantic region. The core of the RGGI program is a requirement that big utilities that emit large quantities of global warming emissions purchase allowances sold at regional auctions. The requirement to purchase these allowances holds utilities accountable for their emissions and creates an economic incentive to reduce pollution as much as possible. Moreover, by limiting the total number of allowances available, RGGI guarantees overall regional emission reductions.
At the same time, the sale of allowances at these regional auctions raises money, which is then invested in projects that reduce consumer costs. In Massachusetts, the RGGI program is one of the primary funding sources for our efficiency programs that have helped make Massachusetts the most energy-efficient state in the nation.
The “triple win” that defines the success of the RGGI program is that by investing in efficiency and low-carbon technologies, RGGI saves consumers money, reduces pollution and improves economic performance.
The Transportation Challenge
The biggest limitation to the RGGI program right now is that it only applies to electricity. While generating clean electricity is important, electricity is responsible for only 20 percent of total emissions in Massachusetts. Our largest source of pollution is transportation.
Solving the climate challenge in transportation requires significant new reforms and investments. We need more public transportation. We need to invest in new technologies, such as electric vehicles and low-carbon fuels. We need to be doing more to encourage active transportation by creating communities where walking and biking are real choices for people. And we need to make housing more affordable in areas with convenient access to public transportation.
At the same time, responding to the climate crisis also requires us to make our transportation system more resilient to climate change. From the billions in damage to the New York and New Jersey transportation system in Hurricane Sandy to the devastating storms in Massachusetts last year, it’s clear that more intense storms and floods are going to create challenges for our transportation systems. Protecting our transportation system from climate change will require billions in new infrastructure investments.
Unfortunately, the actual agencies responsible for making the needed reforms and investments are broke, and since the primary source of transportation funding is the gas tax, everything we do to reduce gasoline consumption is making the transportation agencies more broke.
What would Transportation RGGI look like?
The good news in the TCI report is that the RGGI “triple win” of reduced consumer costs, reduced pollution and increased economic growth can be replicated in the transportation sector.
The TCI report evaluates a model in which states would use some kind of pricing mechanism to raise funds to invest in sustainable regional transportation. While the report leaves open the possibility of different kinds of pricing strategies, the most straightforward approach would be to expand the existing requirement that electric utilities purchase allowances to transportation fuel distributors.
These auction sales would raise money that could then be used on projects that help reduce emissions and consumer costs and create a more resilient transportation sector. The report suggests that auction proceeds could be invested in improving public transportation in the region, investing in new technologies, promoting active transportation, and expanding housing opportunities close to transportation, while also looking at new transportation systems technologies to increase efficiency and reduce congestion.
The result for residents of the region would be cleaner air, less time spent in traffic, less money spent at the pump and a stronger and more resilient regional economy.
I hope that our elected leaders take advantage of this great opportunity to build a stronger transportation system for the state.
Daniel Gatti is Executive Director of Massachusetts League of Environmental Voters (MLEV) and a consultant to the Massachusetts Campaign for a Clean Energy Future, which advocates for smart carbon pricing policies in MA. You can follow me on twitter @danielsgatti or @massenvirovoter. And while you’re at it like us on facebook too.