Transportation Climate Initiative Request to Comment

Watts Up With That

Guest post by Roger Caiazza,

I have previously described the Transportation and Climate Initiative (TCI) framework and Memorandum of Understanding (MOU). This post summarizes my comments on the MOU in hopes that readers of this blog will submit comments to the TCU Public Input form to balance the comments made that are flooding that forum saying that, for example, “We must forge ahead at full speed if we have any hope of staving off climate disaster.”

Last December the TCI released a draft proposal and 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.” They propose a cap-and-invest approach to reduce pollution from the transportation sector. According to their fact sheet, this is “an approach that limits the total amount of emissions from an industry or the whole economy. The total emissions limit—or cap—gets lower and lower over time, which means that less and less pollution is permitted from the capped sources of pollution.” The second aspect, investments “provide funding for programs to further reduce emissions or to provide other benefits to households and communities, as determined by each state.”

If you are a resident of Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Vermont, Virginia, or the District of Columbia it is in your best interest to comment on their public input page. Most of the comments have been entered on the input page form but you can also attach a document. Hopefully my description of the comments that I submitted will give you some ideas for your submittal. The bottom line is that this is a fuel tax that has little hope of making cost-effective reductions much less reductions that could possibly do anything to affect climate change.

I submitted TCI comments on 2/21/2020. The comments were split into two parts. The first part described my concerns with carbon pricing initiatives and then I responded to their specific questions. I have not found any comments submitted by anyone else from the general public that actually addressed those questions.

My Carbon Pricing Comments

Based on my experiences with cap and trade programs there are a number of practical reasons that carbon pricing will not work as theorized. The theory for carbon pricing may work if it covers all sectors across the globe but this proposal is one sector in one region of one country. As a result, the emissions will likely just move elsewhere rather than actually be reduced. For example, this tax will increase fuel prices inside the TCI region. The likely response for visitors is to purchase as much fuel outside the region as possible to avoid the tax.

The Social Cost of Carbon (SCC) is supposed to represent the future cost impact to society of a ton of CO2 emitted today. Therefore, it is entirely fair to use it as a metric to determine if the investments made from carbon pricing income are cost effectively reducing CO2. I believe New York and other TCI states will base their carbon pricing on a $50 global social cost of carbon at a 3% discount rate so that is the cost benefit effectiveness threshold metric I used. I evaluated the New York State Energy Research and Development Authority (NYSERDA) report New York’s RGGI-Funded Programs Status Report – Semiannual Report through December 31, 2018 to determine how New York’s investments have been doing relative to this metric. They have spent over billion dollars and can only claim 1,207,781 tons of CO2 emissions reduced. There were 19 programs that claimed to reduce CO2 emissions and none of them had a cost per ton reduction efficiency less than $50. Worse there were 18 programs funded with RGGI investments that could not even claim CO2 reductions. The record shows that RGGI-funded investments were not cost effective.

Another problem with carbon pricing schemes is that the affected sources, in this case state fuel suppliers, have limited options to make reductions. The only one I can think of is lower-carbon fuel. The most likely scenario is that they will buy what allowances they can and pass the costs on to the customer because they have no way to make effective emission reductions. Also consider options for the TCI investments. One potential control option is to reduce transportation CO2 emissions is to replace gas and diesel passenger vehicles with electric vehicles. The EPA Greenhouse Gas Equivalencies Calculator calculates the greenhouse gas emissions from a passenger vehicle driven for one year. Based on their numbers the average car drives 11,705 miles and emits 4.72 metric tons of CO2 or 5.2 short tons of CO2. The NYSERDA NY Drive Clean rebate is a typical electric vehicle (EV) program to encourage EV adoption. The program offers rebates from $2,000 for buying a model that has an EPA all-electric mileage range of more than 120 miles to $500 for a model that only has an all-electric mileage range of less than 20 miles. The $ per ton reduced rate for the $2,000 rebate is $384.65 and for the $500 rebate it is $96.19. Using the EPA numbers any rebate over $259.98 exceeds the $50 SCC cost effectiveness threshold.

I made several other points related to carbon pricing. A problem with all carbon pricing schemes is that revenues decrease over time. I believe that air pollution control costs increase exponentially as control efficiency increases. Consequently, at the same time revenues are going down the cost to make reductions is going up. I have shown that the RGGI affected sources don’t behave as economist theory says they should. The fact that electric generating companies with extensive experience with market-based programs did not behave as expected means that affected sources in TCI are even less likely to operate as theory expects simply because they have experience with this type of program. I am sure they will treat this as a tax and there is no more regressive a tax than one on energy and transportation. Finally, I referenced the Regulatory Analysis Project (RAP) study: Economic Benefits and Energy Savings through Low-Cost Carbon Management that concluded “ that an attempt to reduce Vermont’s carbon emissions based on carbon pricing alone will cost more, and deliver less, than a program of carbon reductions that is based on practical public policies”.

My Reply Comments to TCI Questions

The TCI asked what level should be used to set the starting point or cap and what future reductions limits should be. They provided no numbers describing current emissions or historical emissions and I was unable to find any. Consequently, I offered no recommendation for the cap or trajectory. In the absence of numbers, I recommended that they start the program without a cap, establish the cap once they had a reporting system in place for several years and determine the trajectory based on expected emission reductions. For example, if you use the EPA Greenhouse Gas Equivalencies Calculator and estimate the number of conventional vehicles you can displace then you can estimate how many tons could be reduced.

My biggest concern with this initiative is price. The ultimate problem with a carbon pricing scheme is that the ultimate control option is to simply stop operating. In this case once the allowed fuel allotments are sold then fuel suppliers will simply stop selling fuel. That surely will spike prices higher and get the attention of the general public that is blissfully unaware of this process. As a result, whatever they do should avoid a cap that leads to fuel shortages.

I also commented on the TCI documents. I explained that I was disappointed with the initial projection summary’s description of costs. 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. These changes would be well within the range of historical variability. The goal of a regional cap-and-invest program would be to use the proceeds to invest in clean transportation options, reducing the exposure of our economy to these oil market price fluctuations. Complementary programs that reduce fuel consumption, such as more ambitious federal and state vehicle emissions standards, would be expected to moderate costs further.”

My comments explained why I thought this paragraph was misleading and naïve. It is unreasonable to expect that the regulated entities in the petroleum industry would do anything but pass the costs of compliance on to consumers. As written this sentence attempts to deflect blame for the costs away from the TCI and on to corporations. The modeling results present 20% to 25% reduction scenarios but disingenuously omit the fact that the TCI component of the reduction is only 6% of the total. They claim that this program will moderate price fluctuations and actually reduce costs. It is more likely that the opposite will occur.

Conclusion

I think it would be in the best interest of residents in the affected states to submit a comment saying this initiative is a bad idea that will likely only increase costs. There was no evaluation included that claimed how this program would affect global warming. The fact that there is no evidence that RGGI investments were cost-effective relative to the social cost of carbon metric that advocates claim account for the impacts means that even if you want to do something this is not appropriate.

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 with which he has been associated.

Advertisements

27 thoughts on “Transportation Climate Initiative Request to Comment

  1. Thank you for posting this. As a resident of the state of New York, I see your point and will definitely look into this.

  2. “Looks like” the initiative functions as a special interest group. Attracting support without limit or reason, where any input by opponents is used to show they aren’t special interest. The fix is already in,

    (I live in Illinois and the new Governor and his controlling party don’t need no stinking MOU to rearrange the political/economic landscape of energy or anything else.)

    • I saw the news of her passing this morning on the news. God Bless her. She was 101 years old. She lived long enough to she her efforts at NASA honored for all to see.

  3. As a not resident of those states I cannot ethically post to their comment forum

    I will note that the law of the harvest has not yet been repealed. Sadly for all of us, they are making themselves even less competitive in the marketplace and giving sensible conservative Staes an even greater competitive advantage than the lower tax lower regulatory advantage already enjoyed. They will continue to reap the economic self-destruction that they sow while reaping no benefit other than points virtue signaling treating a harmless trace gas as if it is a pollutant. We lose a large portion of the productivity that they could contribute to make all of us better. Thankfully they have not seized enough control over the rest of us to do this to everyone in the US, but they certainly would do so if they could.

    • As a not resident of those states I cannot ethically post to their comment forum

      You can post freely, no worries. If it may affect you, you are entitled to have your say. With such a big chunk of the Northeast US involved, it is easy to see that it could impact you.

      You can also have your say as an interested party, analogous to a “Friend of the Court” brief in our judicial system.

  4. TCI will Enhance Climate Migration
    This New England Transportation Climate Initiative is likely to ENHANCE Climate Migration – by improverishing New Englanders and driving them out (-9.6%) from cold Blue New York etc. and seek haven in Warmer more prosperous climates of Red Florida, (+9.9%) South Carolina, and Texas etc. e.g., see:
    US State Domestic Migration Map 2016-2017
    https://www.businessinsider.com/state-domestic-migration-map-2016-to-2017-2018-1

    • Depending on when this falls apart, I am absolutely convinced that the high costs will prevent full implementation, I am planning to move out of New York sooner or later.

    • David-
      The problem is that these folks bring their liberal voting habits with them when they move south (or east in the case of California). That’s because they have no understanding that it is these very voting habits that caused the conditions they are fleeing from.

      I’d call it cognitive dissonance, but my understanding it that cognitive dissonance involves some mental discomfort, and these folks feel no such discomfort. They should stay where they are. We really don’t want them.

  5. Just once I would like one of these “save the world from carbon” narratives state explicitly how they will achieve their goal. EVs? Just moving the emissions from the tailpipe to the energy production source and no infrastructure to deliver it. All electrical? Where will the extra electricity come from, what will it cost, and what will it do to our environment aesthetically and physically? Stop manufacturing? How will you replace the lost jobs and cope with the economic downturn?

  6. I still do not see how those states can participate in an interstate compact without explicit US Congressional approval. The US Constitution specifically requires Congress provide its consent to interstate compacts. Without that consent , this compact would be easily challenged in a Federal Court and thus ruled illegal and an injunction placed against its operation.

    • As far as the legal for Standing to sue is concerned, I see two possible groups able to establish “standing.”

      – A local or regional trucking/freight company in the TCI region being being put at a competitive disadvantage to companies like in North Carolina, West Virginia, Ohio.
      – An federal executive branch administration charged with regulating rail and road interstate commerce under existing federal statutes passed by Congress.

      It seems abundantly clear to me that the Trump Admin could sue to get an injunction against this TCI until such time as Congress provides the constitutionally-required “consent.” This regional TCI is EXACTLY the kind of interstate complicity that the Constitutional framers explicitly intended to halt without Congress’s approval.

  7. These ‘carbon’ taxes all seem to be money laundering schemes. ‘Pretend’ taxes leading to money passed to projects run by politicians’ family, friends and contributors. If passed to contributors the politicians are suggesting laws that will lead to their own monetary gains.

    Regardless, everyone who works in the companies involved and/or supports this proposal, and their immediate family, should be put on the No Fly lists and have their driving licenses over-stamped ELECTRIC VEHICLES ONLY. After all it is what they want everyone else to do.

  8. This is an emergency. Would you all please hand in your car keys, refrain from flying, and avoid buying anything that requires international shipping. /sarc

  9. The first comment should be WHY?
    There is NO credible climate data to support doing this or any other form of Cap & Trade. If Carbon (dioxide or otherwise) is supposed to have such a bad effect there must be a measurable change to some variable (temperature?). If there is no effect from this legislation then there must an automatic cancellation of the whole program.

    • let me copy and paste the above quoted comment here:
      @ Steve Richards, & maybe Phil. and anyone else interested
      you might want to know about my findings.
      I have the first preliminary results of my analysis of the CO2 spectrum. This is not yet final.
      Basically I calculated the obstructed flow of energy in eV, by multiplying the quantum energy E=hv related to each wavelength (as recorded on the x) by the absorbance on the y (=1-%transmittance/100). In the NIST file the absorbance is given on the y.
      According to the spectrum of NIST it looks like there is almost no difference between the outgoing energy from earth and the incoming energy from the sun. Namely, summed up together it comes to:
      22.8 eV obstructed 6-20um (earthshine)
      54.8 eV /2 = 27,4 eV obstructed 2.6- 5.3um (sunshine)
      I divide the result for sunshine by 2 since we only have 12 hours sunshine per day, on average, everywhere, in a year. (Remember I am not looking at energy per surface area, I am looking at energy per wavelength).
      Now, Steve, I had the second file that I asked you to convert as a back up. It appears now that if I do my calculations with this file, I find completely different results. I subsequently investigated where this file came from. Apparently it came from SpectralCalc (Phil. favorite site?) It is used to teach learners about CO2 being a ‘GH gas’. Now, obviously being completely puzzled about this turn of events, I printed the graphs and I carefully looked at what the difference was between the NIST file and the SpectralCalc file. What I found was even more astonishing. The absorption at 15 um was exactly at the same wavelengths as the NIST file, but the peaks were going much deeper, going down further. Also, the absorption at 2.7 um was exactly at the same wavelengths as the NIST file but the peak was much smaller…..
      How strange. We say here: Baie snaaks….The SectralCalc file looks fishy to me.
      Anyway, I am a bit stuck now. Perhaps I need to get a third file? If somebody there in an independent lab. can get me an infra red spectrum of CO2?

  10. as a resident of rhode island i do appreciate the attention you are paying and the general utility if not likely effectiveness of comments contrary to the wishes of our regional bureaucrats. One thing I find ironic is that I’m quite willing to accept higher fuel taxes if there is a grander bargain, i.e. a highway fund established at the state level so that money is spent on highway infrastructure (and i’ve got some new highways in mind, not just fixing bridges – that do need fixing) coupled with some givebacks on the prevailing wage union requirements inthat arena would look like a no regrets policy. Indeed the trucking association in Rhode Island when targeted with trucks only tolls for bridge repairs suggested instead a diesel tax increase.

    Building new highways and rebuilding those we have enables the best of american transportation. I have supported some efforts to limit highway infrastructure within dense urban settings but highways are by far the best way to get between urban centers or to dispersed non-urban-hub economic and education campuses, e.g. https://www.facebook.com/photo.php?fbid=1685559931585558&set=a.496539147154315&type=3

    So no money for amtrak. this isn’t europe which the TCI folks haven’t figured out.

    (and, BTW, infrastructure and wealth we build today–enabled by fossil fuel consumption should be discounted against future supposed costs of carbon.)

  11. Any reduction of carbon dioxide would be a total waste of money. The Obama EPA, admitted during testimony to Congress that any reduction of carbon dioxide by the US would be symbolic. Al Gore agreed. Trillions of dollars for a symbol? Even if carbon dioxide were a factor only a global reduction would matter. All of the US carbon dioxide is just a drop in the global bucket. China alone would overwhelm our reduction and their agreement in the Paris Accord is no reduction until 2030.
    The reduction of global temperatures? The United Nations IPCC and the Obama EPA’s computer model titled MAGICC estimates that reducing the US carbon dioxide emissions to zero will prevent a grand total of 0.018 degrees centigrade by 2100. This is the symbol that they are talking about. Why so little? This is true because developing countries like India, and China will not depress their economy with useless and expensive non-solutions. Cheap energy is required to reduce poverty and imposing carbon emission restrictions would encourage poverty by raising the cost of living. The developing countries are not going to make our reduction of carbon dioxide relevant ever. The reality is that the change of temperature is related to natural forces. I can show you data which indicates that the US temperatures were higher in the 1930’s than now when carbon dioxide was 300 parts per million vs 400 parts per million now.
    https://www.youtube/watch?v=hEITSfQEdsk

  12. I can show you data which indicates that the US temperatures were higher in the 1930’s than now when carbon dioxide was 300 parts per million vs 400 parts per million now.

  13. The climatic problems today, it is no longer the fault of the big industries but of us, the entire population of the world. Nowadays, the maintenance of the environments has been lost, awareness raising must begin in schools and continue until university studies, and the support of the family of new citizens must be essential for this great step. Civilization must be aware of this.

    Follow me on my channel: http://www.cinecalidad.plus

Comments are closed.