Transportation Climate Initiative Update

Guest post by Roger Caiazza

On December 17, 2019 the Transportation and Climate Initiative (TCI) hosted a public webinar that invited public input on “a new draft proposal for a regional program to establish a cap on global warming pollution from transportation fuels and invest millions annually to achieve additional benefits through reduced emissions, cleaner transportation, healthier communities, and more resilient infrastructure.” This is a follow up to my earlier post describing the initial draft framework for this initiative.

Overview

The TCI is a regional effort by thirteen jurisdictions, , Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Vermont, Virginia, and the District of Columbia, facilitated by the Georgetown Climate Center. There are 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.”

The TCI’s Regional Policy Design Process 2019 web page provides links to the draft of the Memorandum of Understanding (MOU). If a jurisdiction agrees to pursue the initiative in the Spring of 2020, they will sign this document. It contains an appendix that describes the goals and schedule, the rules for establishing the program, rules for investing the proceeds, sets up another bureaucracy to implement the program, and defines a couple of other operating rules. There also is a link to a summary of the initial evaluation results.

The announcement encourages people, companies, organizations, and communities to provide their input on the modeling findings and draft MOU to inform the final program design. They say that “Feedback is welcomed on all aspects of a potential program, and TCI jurisdictions are highlighting specific topics on which public input is of particular interest. Those topics include:

· What factors should TCI jurisdictions consider when setting the starting level and the trajectory for a regional cap on carbon dioxide emissions from transportation fuels?

· How should the compliance period be structured to provide needed flexibility, while ensuring environmental integrity?

· What factors should TCI jurisdictions consider when designing mechanisms for managing uncertainty regarding future emissions and allowance prices?”

Observations

I believe that this process is operating in a bubble. The TCI started in June 2012 and since that time a small group of jurisdictions and people have been working on a plan to reduce GHG emissions from the transportation sector. The about web page notes that “The initiative is facilitated by the Georgetown Climate Center with support from its funders, including the Barr Foundation, Energy Foundation, Hewlett Foundation, John D. and Catherine T. MacArthur Foundation, John Merck Fund, New York Community Trust, Town Creek Foundation, and our core funder, Rockefeller Brothers Fund.” The supporters and jurisdictions are convinced that climate change is a threat and that we have to do something. I believe it is a major problem that while the folks running this show have convinced themselves that they are engaged with the public the fact is that the only segment of the public that is aware of this at this time are folks that believe that climate change is a threat and we have to do something. As a result, I worry that it will be a fait accompli by the time the rest of the public catches on to what they are planning to do.

Another issue for the general public is that the available documents are written in “regulatory speak” which is a chore for anyone to try to understand even if they have relevant background and experience. In order to sift through the documentation in order to make meaningful comments takes time and effort. Anyone who has a real job and family probably does not have the time to attend stakeholder meetings or try to understand what is going on, much less make comments. On the other hand, there are many non-governmental organizations that have the time to attend stakeholder meetings, are likely funded by the same organizations funding the TCI, and have the resources to develop comments to support their agendas. Unfortunately, the TCI folks believe or want to believe that they are engaged with all of society rather than just a motivated subsection.

TCI Recommendations

The draft MOU bases its recommendations on modeling future emissions, economic effects and public health outcomes. The key findings that provide the basis for the MOU recommendations are described in the summary of evaluation results:

· “Under all three cap reduction scenarios, the program is projected to produce positive overall environmental, health, economic and other benefits.”

· “A declining emissions cap could lock in decreases in carbon dioxide emissions that are expected through 2032 and potentially drive additional reductions.”

· “The program would enable the jurisdictions to work with communities and businesses to reduce carbon dioxide emissions through programs that expand access to clean mobility and other transportation options, spur economic growth, and improve the lives of residents.”

Everything sounds wonderful but the devil is in the details.

My only experience with the emissions and economic modeling was during the development process for the Regional Greenhouse Gas Initiative (RGGI). Despite their confidence in the modeling results common sense suggests caution. The documentation includes a graph of the historical variation of gasoline price relative to 2019 which shows that it has been up to \$1.50 higher and \$0.90 lower going back to 1999. They claim that the modeling shows that if emissions are reduced 25% that the price increase will only be \$0.17. In order for me to have confidence in that claim I would have to see a model validation of gasoline prices projections relative to the observations. Based on my RGGI experience it is asking a lot of these models to adequately project the effects of a tweak in gasoline price taxes.

I had the impression during the webinar presentation that the TCI approach proposed is based on the RGGI approach because RGGI was “successful”. I see no reason to believe that the RGGI results provide a basis for TCI success. Last month I posted on this presumption. I showed that fuel switching was the most effective driver of emissions reductions since the inception of RGGI. That occurred because affected sources switched to a cheaper alternative and I don’t think you can make the argument that an electric vehicle is a cheaper alternative. Emission reductions from direct RGGI investments were only responsible for 5% of the observed reductions. This result cannot be over-emphasized in this context because barring a magical solution there is no reason to expect something like the reduction in natural gas prices due to a technological innovation. RGGI investments in emission reductions were not efficient at \$897 per ton of CO2 removed. In the TCI all the emission reductions will occur as the result of investments and I have no reason to believe that the poor investment showing in RGGI will improve much.

I believe that the biggest issue is cost. I leave it to the reader to determine what price point would be unacceptable but I think that their first estimates don’t exceed that threshold. The summary states: “If the regulated entities in the petroleum industry choose to pass the costs of compliance with a cap and invest program on to consumers, our modeling estimates an incremental price increase in 2022 of \$0.05, \$0.09 or \$0.17 per gallon in the 20%, 22% and 25% Cap Reduction Scenarios, respectively.” I believe that the regulated entities will simply consider this a tax and cannot imagine any scenario where the petroleum industry would not “choose to pass the costs of compliance with a cap and invest program on to consumers”. Even though these numbers don’t exceed my acceptability threshold I have to spend time evaluating the projections because they seem low.

I could devote an entire post to just these estimates but will only note that these modeling are relative to a reference or business as usual scenario. The summary notes that, in this scenario, they expect “that carbon dioxide emissions from on-road transportation fuels are expected to decrease by 19 percent by 2032 compared to emissions in 2022. This decline is largely the result of improving vehicle efficiency and greenhouse gas emission standards and a shift away from internal combustion engines and toward zero emission vehicles (ZEVs). The shift to ZEVs is achieved through implementation of existing federal and state regulations, shifts in consumer preferences, and innovation that lowers technology costs.” That means that their price increases really only represent a reduction of 1%, 3%, and 6% rather than the 20%, 22%, and 25% showcased values. The analysis admits that if things don’t work out as well as they think that the reference case could have reductions as low as 6%. For all intents and purposes the 19% figure presumes that one out of five new cars purchased in 12 years will be an electric vehicle. I do not find that credible based on my preferences and most people I have talked to. As a result, for those jurisdictions that have a 25% transportation sector emission reduction target I think the actual costs will be much higher.

Conclusion

This process continues to move ahead within a bubble of motivated agents of change. Even if I were confident that a groundswell of public input to the stakeholder process would be acknowledged, the fact is that developing comments beyond a simple “this is just another tax” is difficult and few people outside the bubble have time to do so. If there is interest expressed in the comments then I could provide some thoughts on potential submittal topics.

One final note. Before any estimates of costs were available the Barr Foundation sponsored a survey from MassINC Polling Group. Steve Koczela, president of The MassINC Polling Group, claimed that “Support was broad, stretching across demographic and party lines and throughout the region.” He also said that “This is a complex policy, and so we took the time to explain the basics of how it would work and how states might use the funds generated by it”. I believe that this poll is deeply flawed primarily because it asked whether people supported feel good measures without the context of what this might cost. I think there is a corollary to the concept that you can prove anything with statistics. In particular, you can prove anything with a survey poll. The Barr Foundation sponsored this poll to provide support for the TCI which they also fund. I believe they got what they paid for.

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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Rob
December 19, 2019 6:13 am

Sounds like the kind of plan for economic and financial collapse that the fools in Europe would come with with.

Greg
December 19, 2019 11:33 am

and defines a couple of other operating rules.

That single phrase sounds ominous. Just a couple of tiny, tiny other rules that are so insignificant it’s not worth me bothering you with the details. ( But I did declare them publicly in case anyone tries to claim we sneaked it in without telling anyone, once it is too late ).

commieBob
December 19, 2019 6:31 am

Ammonia has been proposed as a fuel that does not emit CO2. It can be burned in an internal combustion engine or used in fuel cells. It is much easier to store than hydrogen. For reasons I don’t understand, there is a lot of work on ammonia as fuel for large ocean going ships. example My guess is that it has something to do with how long ships last. The conversion from bunker fuel to ammonia may be cheaper than any other way to get rid of CO2 emissions.

NorwegianSceptic
December 19, 2019 6:56 am

And how is ammonia produced without huge energy consumption….?
https://en.wikipedia.org/wiki/Ammonia_production

MarkW
December 19, 2019 8:02 am

What? We don’t have ammonia mines? /sarc

commieBob
December 19, 2019 8:33 am

How bad it sounds depends on what you’re comparing. link For use in internal combustion engines, the round trip efficiency isn’t that bad. Compared with batteries, ammonia is an inefficient way to store electricity. On the other hand a big tank for ammonia is much cheaper than a big battery that would store the same energy.

Kevin Kilty
December 19, 2019 12:29 pm

The link shows three schemes, two of which reform the ammonia as a source of $H_2$ for fuel cells, and direct combustion in an internal combustion engine. The direct combustion is the most daft idea. I worked in a DynoNobel plant during summers as a college student and got pretty familiar with ammonia, nitrogen oxides, nitric acid and ammonium nitrate. None of it is nice. Ammonia will blister skin at 2,000 ppm; $NO_2$ will cause all sorts of trouble in lungs and mucous membranes at 300 ppm.

Ammonia is produced generally from hydrogen made from reformed methane at high temperature and high pressure which all suggests lots of irreversible processes. The minimum input demanded by the 2nd Law of Thermodynamics is roughly 20kJ/kg and best current practice is probably 27 kJ/kg. That makes the initial energy conversion about 75% efficient. Already this is below the 79% efficiency of the chain of processes of exploring for and producing petroleum all the way through refining and delivery to the pump.

Scissor
December 19, 2019 2:31 pm

Yes, ammonia used to be a common refrigerant , which injured and killed people when there were large leaks. That and the energy required to produce it don’t seem attractive for consumer uses. It might be more palatable for ocean going vessels.

December 19, 2019 8:00 am

Anhydrous ammonia is some nasty stuff. Using it for fuel is insane. I work with the stuff, and unless you want to drive around in a hazmat suit don’t even think about it.

mikewaite
December 19, 2019 8:58 am

On combustion 17g of ammonia will result in 46g NO2 and I thought that diesels were being banned in city centres because the high compression resulted in small, but noticeable, quantities of oxides of nitrogen in the exhaust.

oeman50
December 19, 2019 9:31 am

When you combust NH3 (ammonia), you emit water and NOx (nitrogen oxides) which are heavily regulated gases. NOx is removed from flue gases from both coal and natural gas plants at the PPM level. NOx would consist of at least 25% of the flue gas (by volume) or 250,000 PPM. I am not sure how that works out.

David Chappell
December 19, 2019 6:31 am

“…invest millions annually to achieve additional benefits…” ’nuff said

beng135
December 19, 2019 9:22 am

The “benefits” are for the bureaucrats/regulators. More power/influence & bigger budgets.

December 19, 2019 6:44 am

“a new draft proposal for a regional program to establish a cap on global warming pollution …”

Misprint here: it should read: “a new daft proposal…”

beng135
December 19, 2019 9:29 am

+100

December 19, 2019 7:40 am

Malarkey. Plain and simple.

yirgach
December 19, 2019 9:23 am

The US seems to have contracted a severe case of Malarky.
Millions have been infected. The long term effects are unknown, but generally not good.

Joel Snider
December 19, 2019 7:45 am

‘achieve additional benefits through reduced emissions’

Yeah – let’s see those ‘benefits’ spelled out.

December 19, 2019 7:48 am

This whole strategy belongs in the 1990s and is fast becoming totally stupid. Electric cars are the obvious future – most automakers are going all electric, some right now and most over the next 5 years.

December 19, 2019 9:08 am

Dream on

John Cherry
December 19, 2019 9:51 am

I don’t believe you, ColMosby. Most major automakers here in the UK are making/selling ICE models, plug-in or self-charging hybrids, and a very few all electric cars. The biggest short-term investor in all electric cars here is Jaguar, with the I Pace, and the new XJ series (not yet being manufactured.) Despite the drivel being talked now about “range anxiety”, an electric car which cannot make 200 miles on a charge, and cannot be recharged in under an hour, and costs £25,000 more than an ICE vehicle, is never going to make big sales even in a (geographically) small country. This, to be fair, is what Ralf Speth at Jaguar says, and he is right. Better technology is awaited. On the other hand, electric trams, light and conventional rail, make perfect sense if the electricity is produced cleanly.

Johann Wundersamer
January 1, 2020 12:14 pm

Nassau, Bahamas – perfect world for e-mobility:

MarkW
December 19, 2019 10:19 am

You’ve been corrected on this fallacy before.
There is one car company that is talking about going all electric and hybrid. Not all electric.
The others are only producing electrics because government demands it of them.

Eliminate the subsidy and demand for electrics collapses.

Daniel J Hawkins
December 19, 2019 10:24 am

I’ve got a mortgage payment here that says you won’t find even 30% of passenger cars sold in the US in 2025 being electric, let alone 100%.

Scissor
December 19, 2019 3:08 pm

You’ll get more mileage out of a mustang, the kind that eats grass and hay.

MarkW
December 19, 2019 7:59 am

“If the regulated entities in the petroleum industry choose to pass the costs of compliance with a cap and invest program on to consumers”

If. IF

These guys know nothing about economics or how private companies operate.

December 19, 2019 8:49 am

Right! It is mind boggling that someone would write that. What are the private companies supposed to do other than pass the costs on? I also think they are dreaming if they think the companies will do anything other than pass the costs on. I talked to one of the supports who said companies would do more with bio-fuels. You gotta be kidding.

Gerry, England
December 20, 2019 5:47 am

LOL! We had the same dumb talk in the UK when the Tories increased the insurance tax saying that the insurers could choose to pass it on the the customers! There is still a myth around that the Tories – laughingly officially called The Conservative Party – are somehow right wing. The current government are centre left liberals who would be right at home with Tony Blair as Prime Minister. Boris Johnson is a metropolitan liberal who in the past supported EU membership but then he is noted as being a liar.

MarkW
December 20, 2019 9:10 am

In many political circles, right wing starts just to the right of communism.

Drake
December 19, 2019 8:34 am

Dr. Bob
December 19, 2019 8:59 am

When entities use the term pollution but mean CO2, they are already misleading the public. So polling people with questions like “do you want to reduce pollution?” when the actual question is “Do you want to reduce GHG or CO2 emissions?” will always lead to the wrong answer. We have to really start educating the public that CO2 is a necessary gas in the atmosphere and we have no clue yet what is the optimum concentration of CO2 that will enhance plant growth, increase food production, green the deserts, or increase forest growth. Past concentrations of CO2 have been significantly higher than now and the world survived or even thrived. So why the war on CO2? It is about money and control.

yirgach
December 19, 2019 9:44 am

You are of course correct. The TCI, however, just uses the term “carbon” when referring to emission reductions. All encompassing but very misleading. It could include particulate emissions, the cost of moving the carbon around and the every present but highly suspect notion that CO2 will cause an increase in water vapor which will Venusize the Earth.
This frothy balderdash is being pushed by unelected bureaucrats in order to affect policy decisions. The country has become Ballkanized over this nonsense. I noticed that there have been no TCI statements from any New Hampshire groups…

beng135
December 19, 2019 10:02 am

Right. How could something (CO2) absolutely vital for all earthly life (except perhaps some anaerobic/extremophile life) be a pollutant? The lies being casually promoted are astonishing.

Wharfplank
December 19, 2019 9:26 am

TCI? When are we going to vote on that? Oh, I see…

Sara
December 19, 2019 9:33 am

I believe that this process is operating in a bubble. – No, really???

Just a question: do the people who propose these “brilliant” ideas have the faintest idea HOW goods get to market? Just asking, because they seem to be detached from reality in a strange way.

December 19, 2019 11:30 am

“I believe that this process is operating in a bubble.”

A BUBBLE?? They’re in a fantasy universe. World of Warcaft is more believable than this CAGW nonsense.

Ron Long
December 19, 2019 9:37 am

The little girl in the headline photo has her left thumb positioned to control methane emissions. Move over Greta, here is carbon control that works.

bw
December 19, 2019 9:43 am

Carbon dioxide is not pollution.
Carbon dioxide does not cause pollution.

Ask a thousand random people who are breathing out carbon dioxide if what they are doing is polluting the environment.

Keith
December 19, 2019 9:50 am

Roger is correct about the bubble and the vested interests. In Vermont “we the people” are behind on this power curve and I for one appreciate Roger’s heads up earlier. Most of us are busy working and taking care of our families. The Vermont legislature commissioned three studies last year that recommended against this approach.

SeveralVermont legislators worked on the TCI over the summer to push this through in the upcoming year supported by Conservation Law Foundation, Vermont Public Interest Group, Greenpeace, Union of Concerned Scientist and a dozen other like tax exempt entities shown on a slide at a town hall meeting last month. There were several clumsily transparent climate emergency propaganda efforts this fall including dragging kids out of classrooms to add their voices to the urgency of the effort. The series of local town hall meetings around Vermont by the legislators pushing this emergency were expecting to build support for it. Most of us present pushed back on their presentation and the state legislators were taken aback by the resistance. Vermont has the lowest carbon emissions of any state so the entire exercise is based completely on fantasy. I am working with several of our area senators to try to head this off but it is difficult with our legislature’s bias and they will probably ignore us. Vermont’s governor is resistant to participating and Governor Sununu from New Hampshire has said he will not sign on. I recommend that if you are in one of these states you engage your legislators immediately.

December 19, 2019 10:47 am

Keith,

Thank you for that link. Very interesting.

Roger

Keith
December 19, 2019 11:28 am

Roger: Vermont has decades-long experience with weatherization because of our climate so the buildings approach gets Vermont’s emissions down at least cost. That said Vermont might already be below 1990 emissions and we already are on a per capita basis. The EIA and EPA statistics released this year only cover up to the end of 2017 so we will not know until 2021 for this year. Of course those who are vested in this charade will flimsily declare we have to do more to meet the emergency.

Gary
December 19, 2019 10:41 am

The weaselly governor of Rhode Island has been making noises about raising taxes to “save the planet.” Rumors are she wants to impose an additional 25 cents to the already high gasoline tax. Democrat, of course.

mwhite
December 19, 2019 11:38 am
December 19, 2019 1:14 pm

The TCI and its MOU seems to me to be an interstate agreement or compact.
So the question I have is, “Has the US Congress consented to this interstate compact/agreement?”

US Constitution – Article I, Section 10. para 3. “No State shall, without the Consent of Congress, lay any Duty of Tonnage, keep Troops, or Ships of War in time of Peace, enter into any Agreement or Compact with another State, or with a foreign Power, or engage in War, unless actually invaded, or in such imminent Danger as will not admit of delay.”

It seems to me as a simple matter for a trucking or freight company (someone with clear “standing”) in the TCI region to sue TCI in Federal Court to get an injunction to stop this dead in its tracks… if Congress didn’t consent to TCI MOU.

We are seeing something similar with the US DoJ suing California in Federal Court over its agreement with Canada’s Quebec province to trade carbon credits between the two. Pretty clear case and one that Cal will certainly lose in courts.
https://wattsupwiththat.com/2019/10/24/california-veered-out-of-its-lane-in-climate-pact-with-quebec-u-s-lawsuit/

RickWill
December 19, 2019 2:08 pm

or in such imminent Danger as will not admit of delay.

If the States declare a “climate emergency” they clearly believe they are in imminent danger. Has “Danger” in the context of this Article ever been clearly defined?

With POTUS Trump being unsupportive of their “climate emergency”, they could argue they are justified in taking action at State level.

The big problem is finding a commercial operator in the States to challenge any green legislation. Their business would likely take a huge hit if they challenged the States’ program on carbon reductions. The press would crucify them.

December 19, 2019 2:28 pm

That statement was written before even the telegraph was invented. I doubt the courts would find “a self-declared climate crisis” satisfies the imminent danger as will not admit delay “ threshold.

Steve Z
December 19, 2019 4:26 pm

If we assume gasoline to be iso-octane (C8H18), one gallon (about 6.25 lb) of gasoline would contain 0.055 lbmol of iso-octane, and when burned would produce about 8 * 0.055 * 44 = 19.3 lb of CO2, so that 1 ton (2000 lb) of CO2 would be generated by 2000 / 19.3 = 103.6 gallons of gasoline.

If some regulators tried to impose a \$897 per ton tax on CO2 from transportation fuel, it would be equivalent to a tax of \$897 / 103.6 = \$8.65 per gallon, which would quadruple the current price of gasoline at the pump, which already includes Federal and state taxes supposedly used for building roads.

A ridiculously high tax on gasoline might persuade people to buy electric cars, but they would not reduce CO2 emissions, since something (coal or natural gas) must be burned to generate the electricity to charge the electric cars. Natural gas generates about half the CO2 as coal per unit energy generated, but power plants are not 100% efficient either, so that some of the CO2 emitted is wasted on the inefficiency of converting fuel to electricity, so the net effect on CO2 emissions is minimal.

In all-electric cars (not hybrids), the weight of the batteries is a substantial fraction of the weight of the car. For truck transportation, it would be very difficult to build an electric motor with a large enough battery to rival the power of the Diesel engines that power most large trucks on the road, and electric-powered trucks (due to the battery weight) would have worse acceleration than Diesel-powered trucks, which already accelerate much more slowly than passenger cars.

It may be possible to convert freight railroads from Diesel-powered locomotives to electric locomotives, which have already been developed for passenger trains, but this would require stringing electric wires over thousands of miles of freight railroads, and additional generating capacity (from coal or natural gas) would be needed to power the additional electric locomotives.

The only real solution to reducing CO2 emissions from transportation is to use electric vehicles recharged by electricity from nuclear power plants, which have very low emissions but are expensive to build, and some people have an irrational fear of nuclear power due to the Chernobyl and Fukushima incidents.

December 19, 2019 6:00 pm

\$10/gallon gas would not stop the uber rich and political elites (who would be using government transportation) doing exactly what they do now.

It would only stop you and me and the rest of us middle classLes Deplorables from cluttering up the ski slopes and beaches while the rich have them all to themselves and their families.

December 19, 2019 5:04 pm

“A ridiculously high tax on gasoline” would be political suicide for Democrats.

shortus cynicus
December 20, 2019 2:31 am

…invest millions…
People calling themselves government do not invest.
Investment is done only by capitalists, small or big, but always by people speculating to get more capital back than invested.
Autocrats just spend money taken from others.