Northeast United States Transportation Climate Initiative Draft Framework

Guest post by Roger Caiazza

On October 1, 2019 the Georgetown Climate Center announced that the framework for a draft regional Transportation Climate Initiative policy to reduce greenhouse gas pollution from the transportation sector was available. I encourage residents of the participating jurisdictions to comment on the draft framework because it will surely impact your transportation options and costs.

According to the distribution email: “This high-level framework represents an important milestone in the jurisdictions’ bipartisan regional collaboration this year, and reflects extensive public engagement, technical analysis and consultation. A draft memorandum of understanding (MOU) building on the framework is anticipated in December of 2019. After considering further public input, a final MOU is expected in the Spring of 2020, at which point each jurisdiction will decide whether to sign the final MOU and participate in the regional program. TCI jurisdictions encourage all interested parties to provide input and feedback on the draft framework in writing via the online portal on the TCI website. Feedback on the draft framework is most helpful if received by November 5.”

Background

The distribution email describes the Transportation Climate Initiative as follows:

“Pollution from transportation accounts for the largest portion of climate-changing carbon emissions in the Northeast and Mid-Atlantic region (more than 40% region wide). Recent reports by the Intergovernmental Panel on Climate Change found that ambitious reductions are needed within the next decade to avoid dangerous impacts to public health, infrastructure, and the environment. At the same time, people and businesses across the region are calling for cleaner, more efficient, more equitable, and more resilient transportation options. Transportation and climate issues don’t stop at state borders, and regional challenges call for regional action, in addition to efforts undertaken by individual states.”

“Thirteen jurisdictions, including states led by governors from both parties, participate in TCI: Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Vermont, Virginia, and the District of Columbia. With facilitation from the Georgetown Climate Center, the TCI jurisdictions work together toward two overarching goals:

· Making significant reductions in greenhouse gases and other harmful air pollution from transportation across the region; and

· Delivering modern cleaner, more resilient transportation systems that benefit all our communities, particularly those underserved by current transportation options and disproportionately burdened by pollution.”

Framework Conversation

The purpose of the framework is to “foster an informed public conversation”. The draft is a high-level regional policy proposal for public input. It “reflects progress to date on several key elements of a proposed program, informed by public and expert input received so far”. The input report claims that more than 1,000 people have participated in workshops and webinars and that “Online submissions have come from individuals, non-governmental organizations, associations and

businesses, and from coalitions of organizations”.

I have not participated in the regional meetings, but did attend two New York transportation workshops. The participants do not represent a cross-section of society. Instead attendees were the usual suspects of advocacy organizations, environmental activists, and crony capitalists. It is obvious where the framework is going based on the biased input.

Framework Contents

There are six program design elements: equity; applicability; compliance and enforcement; flexibility, allowance allocation, and stringency; regional program administration; and additional program design elements. I will address each below. Note that the overall plan is to control emissions by setting a cap on emissions and then developing a market trading program which, theoretically, is an efficient way to implement emission reductions.

Equity is a common element in all recent environmental initiatives. According to the framework draft: “TCI jurisdictions embrace the goals of equity, environmental justice, non-discrimination and meaningful public participation. TCI jurisdictions have committed to working with people and communities to develop and implement a regional policy that addresses the urgent need to reduce greenhouse gas (GHG) emissions and other harmful pollutants generated by the transportation system, while seeking to improve equity, mobility and community engagement.” Is there anyone who disagrees with those goals? Cynic that I am, I suspect they are prominently included to cater to a particular demographic who might, upon serious review of the plan, realize that this kind of program will significantly impact those who can least afford the inevitable extra costs and become opponents of the initiative.

There are two components to the applicability design element: affected fuels and emissions and regulated entities. The proposed program would “cap emissions of carbon dioxide from the combustion of the fossil component of finished motor gasoline and on-road diesel fuel in the region”. The regulated entities would include “owners of fuel at terminals within the TCI jurisdictions and owners of fuel delivered into the jurisdiction for final sale or consumption in the state from a facility in another jurisdiction. Owners and operators of fuel supply infrastructure (terminals, pipelines, distributors, etc.) may also have reporting or recordkeeping obligations.” One of my big concerns about this program is that it is flying under the radar of all but a few. I have been active in the Regional Greenhouse Gas Initiative (RGGI) since its inception and was part of an organized industry response that had extensive experience with this kind of pollution control program. I suspect that the proposed regulated entities for the TCI are not nearly as experience or organized and may not be able to provide meaningful comments on the plan even if they are aware of this initiative. The general public will likely only be aware of this when the costs shoot up and then will blame the evil fossil fuel industry.

There also are two components in the compliance and enforcement design element: emissions reporting requirements and monitoring and verification. Fuel suppliers would be required to “report emissions to TCI jurisdictions, plus supporting information” and compliance obligations would be calculated based on the emissions that occur when the affected fuel is combusted, using standard emission factors developed by the United State Environmental Protection Agency (US EPA), California, or other similar sources”. Based on my experience with electric generating sector emissions reporting it would be much easier for the affected sources to report fuel quantities and let the jurisdictions calculate the emissions. EPA emission monitoring reporting requirements spawned a niche industry that was much more complicated than it had to be and the authors of the initiative appear to want to emulate that approach. The draft framework proposes that TCI jurisdictions would “establish an electronic emissions reporting system informed by existing reporting requirements for fuel suppliers”. I worry that the pre-disposition of the developers of the framework to require reporting emissions rather than simply using existing reporting requirements for fuel suppliers will unnecessarily complicate reporting.

The flexibility, allowance allocation, and stringency design element is complicated and skeptical concerns are usually overlooked. As is the case with RGGI and New York’s carbon pricing initiative for the electric sector, the authors of the draft framework rely heavily on economic theory. However, in my opinion, reality is different for these programs. The draft says that the program will incorporate “allowance banking and multi-year compliance periods and include price-based mechanisms for cap flexibility and cost containment based on examples from RGGI.” This flexibility approach is based on the premise that the affected sources will somehow treat the allowances as a storable commodity and make long-term plans for complying with the rules to efficiently reduce emissions. In reality, the affected electric generating sources in RGGI and, I can almost guarantee in this program, will treat this added expense just like a tax. It is just an added cost to doing business and the planning horizon for costs is the short-term compliance period. I believe that disconnect will eventually cause unanticipated problems.

In the successful EPA acid raid program, sulfur dioxide (SO2) allowances were allocated based on past operations. Future allocations were initially set in 1990 at half the historical rate by 2020. Affected sources installed control equipment or switched to lower emitting fuels and sources that did not have cost-effective options purchased the excess allowances from the facilities that over-controlled their emissions. The resulting reductions ended up costing much less than initially expected and were implemented sooner than the deadline. However, reductions came primarily from fuel switching to lower sulfur coal which was economic, in no small part, due to the de-regulation of the railroad industry. This was not anticipated when the rule was enacted.

The authors of this program are basing this program on RGGI’s auction allocation approach. RGGI auctions its allowances so that the affected sources have to buy allowances to operate. This “cap and auction” approach is supposed to invest the auction proceeds in emission reduction programs. On the surface it appears that this worked in RGGI because the CO2 emissions cap has gone down from 188 million tons per year in the initial 2009-2011 compliance period to 62,452,795 tons in 2017. In 2020 the cap will be 56,283,807 tons. However, the observed reductions in RGGI are primarily due to fuel switching to natural gas which is now cost-effective because of the hydraulic fracturing natural gas revolution. When you look at the reductions that can be traced back to the auction investments, those investments are not a primary driver of observed reductions. In New York, $558.9 million auction proceed investments have only reduced CO2 emissions 1,116,587 tons compared to 2009 to 2018 emission reductions of 10,074,794 tons so the investments are responsible for only 11% of the observed reductions. Investment reductions for all of RGGI range from 24% to 4% depending on the assumptions made concerning displaced fuels.

There is an important difference between cap and trade programs for SO2 and nitrogen oxides (NOx) emissions and cap and invest programs for GHG emissions. There are add-on control options for SO2 an NOx whereas there isn’t any cost-effective options for CO2. As a result, the only options for CO2 trading programs are to switch fuels or run less. For the TCI that means replacing vehicles to hybrids or electrics or switching to public transit. One would hope that the stringency of the proposed program will be based on reasonable expectations of transportation alternative changes but the key point is that the stringency is a major factor affecting costs If they get too ambitious the costs will soar.

In the regional program administration design element, a regional organization would be “used to conduct carbon market monitoring, auction administration and allowance tracking. This would include the establishment and maintenance of a system to collect and manage reported emissions-related data from regulated entities and track allowance accounts. Emission allowance and transportation fuel markets would be monitored on an ongoing basis regional program administration”. In the past some of the loudest advocates for this type of program ended up in the regional organization and I have no doubts that the same will be true for this program.

The additional program design element includes investment of proceeds and complementary policies. While these are necessary, they also are opportunities for cronyism. Obviously there has to be a bureaucracy set up to invest the proceeds and the complementary policies offer all sorts of opportunities to feather the nest of connected advocates for this program.

Summary

This initiative has operated without general public knowledge for several years. Although the advocates for this program probably believe that they are doing the will of the people the limited audience involved so far has biased the approach. For starters the basis of the program is “the urgent need to reduce GHG emissions and other harmful pollutants generated by the transportation system”. Most people who have bothered to wade through the documents believe that so are ready for this kind of program. Advocates also believe “people and businesses across the region are calling for cleaner, more efficient, more equitable, and more resilient transportation options”. Again in their echo chamber that may be true but I believe the majority of people are pretty happy with what we have available. The disconnect between aspirational goals and the real world will inevitably become obvious.

The reality is that Roger Pielke Jr.’s Iron Law of Climate Policy is an inevitable outcome for the changes envisioned for the TCI. His “iron law” states that “while people are often willing to pay some price for achieving environmental objectives, that willingness has its limits”. I have been unable to find any mention of costs in the publications. However, at the meetings I have attended conversations with attendees have talked about dollar and more adders to the cost of fuel. I imagine that amount will exceed the willingness of the public.

In the introduction I encouraged residents of the participating jurisdictions to comment on the draft framework because it will surely impact your transportation options and costs. It is completely fair to ask for cost estimates now before they proceed any further. You can also ask how this is supposed to work in a limited area of the country. Will you get taxed if buy gas across the state line? If nothing else submit a comment saying how much you are willing to pay and why. TCI jurisdictions encourage all interested parties to provide input and feedback on the draft framework in writing via the online portal on the TCI website by November 5. Please take them up on that.

Roger Caiazza blogs on New York energy and environmental issues at Pragmatic Environmentalist of New York. This represents his opinion and not the opinion of any of his previous employers or any other company he has been associated with.

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56 thoughts on “Northeast United States Transportation Climate Initiative Draft Framework

  1. If this passes, I suspect we’ll see mass migrations from Northeast states. I wouldn’t stand for it, if I lived there and was financially impacted by it.

    Regards,
    Bob

    • My first thought exactly Bob.

      Second thought was a safety review of what they already have and frequency of lapses in safety.

  2. That’s how socialism advances towards the suppression of money.

    Soon it’ll make no sense to pay wages as all would somehow go in taxes.

    Better save on accounting, transfer all wages directly to the state and receive food & strict necessities tickets.

    • This is very old news, I think a few decades, but, if I remember correctly, in Sweden, tax rates became steep enough and high enough, that some higher level employees refused promotions, because they would be moved to a stiffer tax bracket that would make them worse off financially. I expect that the problem was corrected. For taking on additional “environmental costs”, I don’t have much leeway.

      • And in the UK, “musicians” (Beatles, The Who, Pink Floyd etc etc) were taxed at 99% of their earnings. So they f*$ked off to the US.

  3. All this will accomplish is producing a lot of text and news clips justifying raising taxes and spending the money for the favorite green projects of someone. Who?
    Some documents will be available in spring 2020 and signed sometime. When?
    A few years later costs to residents of the jurisdictions will increase.

    Is it cynical to mention that the world as we know it is supposed to end before the poorer folks of the jurisdictions notice their well being has degraded, again?

    As for Earth, the atmosphere, and the various climates, the impact will be Zero.

  4. This is just more “fighting climate change” stupidity. There is nothing the U.S. or any other developed country can do to reduce global emissions or energy use. These metrics are completely dominated by the developing nations which account for about 70% of global energy and emissions and will continue to increase that dominance for the next several decades. Programs like this one are nothing but energy and climate meaningless political gestures by ignorant politicians and clueless media propagandists.

    • BS, indeed. That 5,000 words of bureaucratic gobbledygook means absolutely nothing. You want the REALITY? The roadbed our trains are running on was laid in 1844. The bridges, half of which don’t open and close properly and cause horrific delays, date from the 1910’s or before. The Amtrak Acela trains are themselves over 30 years old and unable to hit top speed for more than a couple of miles along the entire Boston to DC corridor due to the aforesaid outdated trackbed and bridges.
      Buses are ridden almost entirely by a subset of low-wage service sector workers who cannot afford cars, and that about does it for the joys of mass-transit.

      I-95 was built in the mid 1950’s, and it is crumbling. Dominated by vastly more excessive heavy truck traffic than it was ever designed to handle, the stretch through CT commonly creates so much carnage that many residents refuse to drive on it entirely. The Merritt Parkway, cars-only alternative, is a parking lot every single morning and evening commute hour. How much “carbon” is THAT? Plenty of carnage on there, too–built in 1938 and designed for slow, leisurely tourist travel, today’s users are stressed-out commuters who regularly drive 80 while texting! The firemen frequently pick their cars out of the swamps and trees when they run off the road.

      Airports are difficult to get to for all the reasons above, you generally have to leave a minimum of 3 hours early. Anything that CAN be made more inconvenient, IS, not least the degrading “security theater” which interestingly is far less intrusive on El-Al in Israel where they scan for real threats sensibly. No, here we all but strip-search tiny tots and nonagenarians in wheelchairs because we can’t “profile,” we must pretend everyone’s an equal “threat.”

      That’s the REALITY of the transportation picture in the Northeast–a principal reason why 300 people a DAY are fleeing from NYC alone. Half of CT at least also has a realtor’s sign in the driveway.

  5. The emissions problem is really simple. Just electrify the trains and buses and pretend that they create no pollution of any kind and no CO2 emissions. Bam! Problem solved.

    • they did that to trains in Aus so when the power goes out they stop dead
      at least old diesel engines gave you the chance to get to work or home regardless
      pity us in Aus my local petrol unleaded was 1.39 last week today its 1.46.9 per LITRE!
      excuse is the saudi blowup fact is saudis got repair well under way and yet again we are being ripped off

  6. The flexibility, allowance allocation, and stringency design element is complicated and skeptical concerns are usually overlooked. “

    WTF???

    ========================================

    As for [Pielke’s] “iron law” states that “while people are often willing to pay some price for achieving environmental objectives, that willingness has its limits”.

    I filled up in Tucson Arizona today for $2.61/gal Reg unleaded. Phoenix area gas prices are around $3.05/gal.
    A couple hundred miles west on I-10, LA-Southern California gas pump prices are in the $3.85/gal (lowest: Costco) to $4.80/gal (typical name brand: Chevron, Mobil) range.

    Apparently if you’re brainwashed enough. even getting BOHICA everytime someone fills up in SoCal is okay.

    • Joel,

      My apologies for the language used. Unfortunately their “flexibility, allowance allocation, and stringency design element” is not easy to describe much less critique. It boils down to this. They wrap several critical assumptions in one element, throw in some jargon so it sounds as if there is a strong basis for their plan, and then conveniently overlook inconvenient facts. The flexibility component elements worked when used for SO2 and NOX but CO2 is different and I think that makes it less likely to work. The allowance allocation can be best described simply as how they will implement the tax. Stringency makes all the difference – too stringent and no one gets to have their own car and not stringent enough the environmentalists whine. Wonky details on these topics are available on my blog.

    • A couple of hundred miles? More like 400.
      Secondly. California gas prices are higher for a reason: the special California formulation gasoline mandated by CARB.
      Sure, you can drive the 400 miles for cheaper gas – but that isn’t a net win.

  7. Since the politicians have decreed that ‘Global Warming’ will have occurred and the sea level will drown the NE before this study is approved – and these politicians are never wrong – just ask them; would it be remiss to ask why work such as this should even be considered? Nothing can happen on this proposal since the transportation will no longer be needed!

  8. Northeast states are high tax and are already seeing a quantifiable loss of business and higher income tax payers. I live in the TVA service area. Some years back that utility was under heavy political pressure to spend money on various green programs. At one point the hired a firm to find out what ratepayers wanted. Low cost electricity was number one by a mile. TVA proceeded with their plans and artificially raised rates anyway

  9. Under ‘Background’ it starts like this…

    “Pollution from transportation accounts for the largest portion of climate-changing carbon emissions in the Northeast and Mid-Atlantic region […]”

    …and goes downhill from there.

    I’m still waiting for the explanation of how CO2, which lags temperature on all time scales*, causes temperature change, let alone Climate Change.

    *For once, I have to give Al Gore his due. He had the graph showing that in his “Inconvenient Truth” movie. He drew the wrong conclusion, of course, but he did show the relationship between CO2 and Temperature.

    • I would think that the Mid-Atlantic region would be one of the highest CO2 producers in the world. Of course there is not much that can be done about the tectonic activity along the ridge but there are no states there anyway as it is international waters.

      Ban the Mid-Atlantic Ridge (and slack use of the English language).

    • “I’m still waiting for the explanation of how CO2, which lags temperature on all time scales*, causes temperature change, let alone Climate Change.”
      Exactly! It should be repeated again and and again and again how C02 does NOT cause rising temps or any other climate change. AGW is the naked emperor and instead of debating his threads we should be collectively shouting ‘He’s buck-naked!’

  10. Wake up people. We’re being regulated into oblivion based on scaremongering tactics. If you wait too long to speak up it will be too late. Fortunately we’ll have many European countries to base our efforts on and they won’t be pretty. How long will it take for people to recognize that it’s the Western industrialized countries that will be the only ones toeing the line for CO2 reduction?

  11. Recent reports by the Intergovernmental Panel on Climate Change found that ambitious reductions are needed within the next decade to avoid dangerous impacts to public health, infrastructure, and the environment.

    Somebody can now inform the Georgetown Climate Center that the IPCC doesn’t know what it’s talking about.

    Literally.
    The IPCC’s air temperature projections are physically meaningless. The scare about an impending thermal nightmare is scientifically unfounded.

    The demonstration of this conclusion was discussed at Watts Up With That here.

    CO2 is not known to be a pollutant.

    The only known effect of human-caused CO2 emissions is global ecological greening.

  12. Bad, bad, bad.
    This is the punishment for all, because too many weak and ill-informed people believed in the myth of environmentalism and encouraged its growth, the growth of a monster.
    You can redeem yourselves by getting up off your bums and actively opposing this stupidity. Now, not next week.Geoff S

    • Most “environmentalists” live in cities and the closest they ever get to nature is a flower box.
      They are the same ones who believe that food comes from grocery stores.

      • Well, here in Portland, a lot of stoners (who will give a lot of lip-service to environmentalism, dude) will go skiing on Mt. Hood – but that’s a pretty short drive.

  13. If this is an agreement amongst several states, Article 1 Section 10 of the US Constitution prohibits such agreements.

    From my read this would be unconstitutional as interaction between the States is the domain of the Federal government.

    • I looked it up thinking this clause would also have been an impediment to RGGI. Apparently, the clear language of the Constitution hasn’t been applicable to intra-state compacts since Virginia vs. Kentucky, which found that such compacts were a-ok unless they infringed on the supremacy of the Federales.

  14. Let me guess. They’re going to reinvent something like that Californian boondoggle I read so much about. Another square wheel.

  15. Methinks there is a flaw in advocating electric vehicles. – primarily cars. If you have a ‘gasoline’ powered car, it is easy to calculate the amount of carbon dioxide produced from the combustion of the gas. Consider an electric powered car – where does the energy come from? If you can guarantee that the sole source is a hydro-electric power station, easy, there is no CO2 produced. If it comes from a coal burning power station – like some or even most in the USA – you should take into account the CO2 produced from burning the coal to calculate the emissions from the ‘electric’ car. This program seems to omit that, and assume that since the car is ‘electric’ then there are no CO2 emissions.

    Go figure!

    • Dudley,
      Germany has done the math already.

      ELECTRIC VEHICLES EMIT MORE CO2 THAN DIESEL ONES, GERMAN STUDY SHOWS
      * Date: 23/04/19
      http://bit.ly/2ZYdUXJ

      When CO2 emissions linked to the production of batteries and the German energy mix – in which coal still plays an important role – are taken into consideration, electric vehicles emit 11% to 28% more than their diesel counterparts, according to the study, presented on Wednesday at the Ifo Institute in Munich.
      Mining and processing the lithium, cobalt and manganese used for batteries consume a great deal of energy. A Tesla Model 3 battery, for example, represents between 11 and 15 tonnes of CO2. Given a lifetime of 10 years and an annual travel distance of 15,000 kilometres, this translates into 73 to 98 grams of CO2 per kilometre, scientists Christoph Buchal, Hans-Dieter Karl and Hans-Werner Sinn noted in their study.
      The CO2 given off to produce the electricity that powers such vehicles also needs to be factored in, they say.
      When all these factors are considered, each Tesla emits 156 to 180 grams of CO2 per kilometre, which is more than a comparable diesel vehicle produced by the German company Mercedes, for example…

  16. There is no such thing as climate changing carbon emissions. There is no real evidence that CO2 has any effect on climate and there is plenty of scientific rationale that the climate sensitivity of CO2 is zero.

    • I am always astounded by those who talk about net zero CO2 or carbon output. To achieve such a thing they would have to kill every living thing on the planet including themselves. You are correct CO2 has no effect on climate.

  17. What’s the problem, again? Commuter rail is common in my area, bringing people from the ‘burbs into the city to work. As common as peas and apples. Very affordable , a lot LESS in the way of carbon emissions and gas money spent on commuting by POV, which makes sense in my view. The trains run on time, for the most part and I never had to sit in traffic, inbound or outbound, and struggle to find parking in a congested city. I could walk from the train station to work, a good and very healthy walk, or if the weather was too nasty, take the bus instead.
    So what was the problem about this, again? Used to be that rail transportation was the way to go for a lot of people from suburban areas in the East/Northeast into urban/metro areas to work. Why/how did that disappear? Was that mostly just attrition?

    • Which is fine and dandy when you’re commute/work involves the city. However there is a large percentage of the population in rural and suburban areas who live and work outside of the cities, and indeed rarely ever need to step foot into the city. city bound trains/buses are useless to them, and their rural/suburban destination are far and diverse enough that public transportation doesn’t make economic or environmental sense.

      Case in point, I live and work in the suburbs. I couldn’t tell you the last time I went to the city (though on the rare occasions that I do go to the city, I take the existing trains – naught wrong with public transit when and where it makes sense to use). There is no viable public transportation option to take me from my home location to my work location. And even if the government set up a bus route that would be viable for me, it wouldn’t be viable for my neighbor who works in a completely different non-city suburban area. And if the government set up a separate route that would be viable for him, well guess what, the next neighbor in line would find both those route equally useless for getting to where he works. And if you are going to set up individualize bus routes for everyone, just cut out the middle-busperson and use individual transport (IE personal vehicles) like we currently do.

      • Bottom line is that mass transit only makes sense when there is a mass to transit. Such as between two points in a densely packed city or between a suburban transportation hub and an densely populated urban center. For rural and many suburban areas, mass transit isn’t workable because there’s no mass to transit.

    • Sara,

      I think your example illustrates the problem. Very few would argue that commuter rail and good mass transit works very well in major urban centers. However, that approach fails when the population density drops. For example, Albany, NY used to have a commuter train from Saratoga but that went out of business about 1960. Even though the commuter interstate route to the north of Albany is always busy even bus commuting is limited because the urban job area is spread out. Going out to rural areas the Transportation Climate Initiative suggestions make even less sense.

      • Indeed. City dwellers/workers don’t realize just how big the US and how sparsely populated many areas are. To pick up from my previous example. Let’s say the government sets up a bus route from roughly my location directly to my roughly my work location. The route might only accommodate say 5 people daily – myself from my area and maybe 4 others along the way (and that’s being generous). Is it really viable to have a dedicated route running back and forth for 5 people? Now consider that those 5 people don’t all go to/leave from work at the same time, there might only be 1 or 2 of us travelling at the same time at most! Does anyone think that is a viable route to have? either economically or ecologically?

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