Transportation Climate Initiative (TCI)
FICTION #1: The Transportation Climate Initiative (TCI) is a regional approach encompassing all of the Northeast and Mid-Atlantic states.
FACT: TCI was promoted, developed, and described by the Georgetown Climate Center (GCC) and state regulators as a 13-state region and Washington D.C., but only Massachusetts, Connecticut, Rhode Island, and Washington D.C, chose to take the next step toward launching TCI by signing the MOU.
FACT: TCI was promoted, developed, and described by the Georgetown Climate Center (GCC) and state regulators as a 13-state region and Washington D.C., but only Massachusetts, Connecticut, Rhode Island, and Washington D.C, chose to take the next step toward launching TCI by signing the MOU.
Expand Fact #1
During the 2021 legislative session, none of the remaining collaborating states submitted legislation to implement TCI. New Hampshire and Maine dropped out and no longer participate, and Vermont’s Governor is on record opposing implementation of TCI. There isn’t any evidence that other states have the political will to push this fee onto their constituencies or its risky and flawed program design.
The participating jurisdictions once included: Connecticut, Delaware, the District of Columbia, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, North Carolina, Pennsylvania, Rhode Island, Vermont, and Virginia.
The participating jurisdictions once included: Connecticut, Delaware, the District of Columbia, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, North Carolina, Pennsylvania, Rhode Island, Vermont, and Virginia.
FICTION #2: TCI was developed by state regulators and includes a shared vision among all stakeholders across the entire 13-state consortium and Washington D.C., including an estimated 72-million residents?
FACT: TCI was created by the GCC, a division of Georgetown University’s Law Center, made up of lawyers and former White House officials.
FACT: TCI was created by the GCC, a division of Georgetown University’s Law Center, made up of lawyers and former White House officials.
Expand Fact #2
Numerous private foundations fund their projects including a staff of lawyers, scientists, and former White House policy officials. The GCC’s role with TCI encompasses preparing all research & development, messaging, policy document preparation, model regulations, and managing all public comment materials including content and format, virtual meetings, and comment tracking. By all appearances the GCC is the think-tank and driver behind this program, not the states.
The scheduled release of TCI’s model regulations did not occur until 70-days after MA, RI, CT, and the Washington D.C. signed an agreement on December 21, 2020, to each launch the program. All stakeholders would agree that the 153-page draft model rule’s public release on March 1, 2021, was the first-time detailed information, not conceptual information, ideas, or diagrams, about the program’s operation and mechanics became publicly available.
The program’s design and development as orchestrated by GCC with state oversight was conducted in an opaque manner, where conceptual presentations were made by state TCI Leaders, and every webinar presentation ended leaving minimal time for any meaningful discussion. Questions posted “in the chat” were filtered by the GCC host. No meaningful opportunity was ever provided for a two-way dialogue. Moreover, summing up best this frustration are remarks made by Climate Justice Alliance Steering Committee member Maria Lopez-Nuñez of Ironbound Community Corporation, located in New Jersey challenging TCI’s state leadership team to delay moving forward with TCI until authentic public involvement occurs. The Ironbound Community Corporation remains opposed to TCI, as well as the Sierra Club.
At the bottom of TCI’s homepage, it includes a telling disclaimer on who is really behind this program:
“Information and documents published under the Transportation and Climate Initiative (TCI) name represent work produced in support of the TCI or its projects. Information contained on this site does not necessarily reflect the positions of individual jurisdictions or agencies unless explicitly stated.”
The design of the TCI program including the public involvement process that was undertaken and funded by a private organization appears to disregard public comments critical of its public involvement process and substance with programmatic flaws identified with its design.
The scheduled release of TCI’s model regulations did not occur until 70-days after MA, RI, CT, and the Washington D.C. signed an agreement on December 21, 2020, to each launch the program. All stakeholders would agree that the 153-page draft model rule’s public release on March 1, 2021, was the first-time detailed information, not conceptual information, ideas, or diagrams, about the program’s operation and mechanics became publicly available.
The program’s design and development as orchestrated by GCC with state oversight was conducted in an opaque manner, where conceptual presentations were made by state TCI Leaders, and every webinar presentation ended leaving minimal time for any meaningful discussion. Questions posted “in the chat” were filtered by the GCC host. No meaningful opportunity was ever provided for a two-way dialogue. Moreover, summing up best this frustration are remarks made by Climate Justice Alliance Steering Committee member Maria Lopez-Nuñez of Ironbound Community Corporation, located in New Jersey challenging TCI’s state leadership team to delay moving forward with TCI until authentic public involvement occurs. The Ironbound Community Corporation remains opposed to TCI, as well as the Sierra Club.
At the bottom of TCI’s homepage, it includes a telling disclaimer on who is really behind this program:
“Information and documents published under the Transportation and Climate Initiative (TCI) name represent work produced in support of the TCI or its projects. Information contained on this site does not necessarily reflect the positions of individual jurisdictions or agencies unless explicitly stated.”
The design of the TCI program including the public involvement process that was undertaken and funded by a private organization appears to disregard public comments critical of its public involvement process and substance with programmatic flaws identified with its design.
FICTION #3: The Georgetown Climate Center has the expertise to create this program.
FACT: The GCC does not understand the complex and hyper-competitive downstream fuels distribution chain. The GCC failed to meaningfully engage with the industry participants they seek to regulate when they cemented its program’s design and accepted little to no industry advice during its so-called “public feedback” processes and public document comment periods.
FACT: The GCC does not understand the complex and hyper-competitive downstream fuels distribution chain. The GCC failed to meaningfully engage with the industry participants they seek to regulate when they cemented its program’s design and accepted little to no industry advice during its so-called “public feedback” processes and public document comment periods.
FICTION #4: Polling data shows residents want TCI implemented.
FACT: Polls conducted by TCI proponents[1] in December 2019 and by opponents[2] of TCI in 2020 and 2021 reveal most people want to reduce Greenhouse gas (GHG) emissions; however, polling by TCI proponents consistently avoids a critical question: Are you willing to pay for it? When asked, the overwhelming majority does not support implementing the TCI program.
[1] MassInc Poll of TCI state jurisdictions December 2019.
[2] CEMA poll of CT residents released September 2, 2021, and Boston Herald, January 22, 2020 on new MA TCI Poll.
FACT: Polls conducted by TCI proponents[1] in December 2019 and by opponents[2] of TCI in 2020 and 2021 reveal most people want to reduce Greenhouse gas (GHG) emissions; however, polling by TCI proponents consistently avoids a critical question: Are you willing to pay for it? When asked, the overwhelming majority does not support implementing the TCI program.
[1] MassInc Poll of TCI state jurisdictions December 2019.
[2] CEMA poll of CT residents released September 2, 2021, and Boston Herald, January 22, 2020 on new MA TCI Poll.
Expand Fact #4
MA Poll Results:
CT Poll:
- The poll also found that more than 63 percent of Massachusetts voters strongly or somewhat oppose paying the TCI fuel costs and any additional gasoline taxes increased by the legislature.
- Just over 61 percent of people said they strongly or somewhat oppose Massachusetts joining TCI if neighboring states decide not to join.
- The strongest response in the poll were given when voters were asked if they would support TCI in addition to a separate gas tax legislative leaders are promising, in which 63.6% of the voters “strongly/somewhat” are against.
CT Poll:
- By more than a 2 to 1 margin (57% to 27%), CT residents oppose the state’s entry into the TCI program. Opposition is strong — two-thirds of those opposing say they “strongly” oppose the plan. By better than 3-to-1 margins, Republicans and independents oppose TCI. Even among Democrats opposition (45%) exceeds support (39%) for entry into TCI.
- The vast majority of CT residents are unhappy with the current price of gasoline in the state. Seventy-six percent say that the cost of gas in CT is too high and 74% feel that the current 44 cent tax on gas is too high. Eighty-eight percent say it is a problem that CT has the highest cost of gasoline in New England, with as many as 68% saying this is a “big” problem. Strong majorities of Democrats (70%), Republicans (88%) and independents (82%) all say gas prices are too high in Connecticut.
- The increase in gas prices under TCI underlies this strong opposition to the plan. 80% feel the estimated 5-9 cent increase in a gallon of gas in the first year of TCI is too high, and 79% say the 25-cent increase by year 10 is too high. Strong majorities of Democrats, Republicans and independents say these increases are too high.
- Moreover, the vast majority (82%) of CT residents feel that the additional fees on gas under TCI places an unfair burden on low- and middle-income residents. Democrats, Republicans and independents all agree that this is an unfair cost burden on low- and middle-income residents.
- Also underlying opposition to TCI is the view that consumers should not be burdened with the cost of building electric charging stations (7-in-10 agree with this); and that state government should not raise gas prices to make it less attractive for consumers to buy gas-powered vehicles (62% feel this way).
FICTION #5: Independently implementing TCI will greatly reduce transportation sector emissions.
FACT: TCI will only reduce emissions .3% for a $3 Billion price tag
FACT: TCI will only reduce emissions .3% for a $3 Billion price tag
Expand Fact #5
The GCC and state regulators disingenuously claim TCI will reduce transportation related emissions 26% by 2032. However, what they don’t tell you is that without[1] implementing TCI participating states will achieve 25.7%[2] of the 26% reductions through existing and anticipated new car fuel economy standards . TCI’s baseline reference case modeling was developed to measure continued fuel usage and emissions without implementation of the TCI program. So, implementing TCI will only reduce emissions by a meager 0.3%, and cost residents across MA, RI, CT, and Washington D.C., over $3 Billion by 2032.
[1] “Reference Case scenarios examine how different external factors, including economic and behavioral impacts of COVID-19, oil prices, federal policies, and technology costs, could lead to lower or higher emissions, in the absence of the TCI-P.” TCI: Estimating the Regional Environmental, Health, and Economic Benefits and Costs of the Transportation and Climate Initiative Program March 2021, page 3.
[2] TCI: Estimating the Regional Environmental, Health, and Economic Benefits and Costs of the Transportation and Climate Initiative Program, March 2021, page 4.
[1] “Reference Case scenarios examine how different external factors, including economic and behavioral impacts of COVID-19, oil prices, federal policies, and technology costs, could lead to lower or higher emissions, in the absence of the TCI-P.” TCI: Estimating the Regional Environmental, Health, and Economic Benefits and Costs of the Transportation and Climate Initiative Program March 2021, page 3.
[2] TCI: Estimating the Regional Environmental, Health, and Economic Benefits and Costs of the Transportation and Climate Initiative Program, March 2021, page 4.
FICTION #6: TCI is not a gas tax.
FACT: Calling TCI a “fee” is a legal-term approach designed by GCC and state regulators to circumvent existing due process taxpayer protections and thereby impose a never-ending series of annual gas and diesel price increases on working families without any legislative oversight
FACT: Calling TCI a “fee” is a legal-term approach designed by GCC and state regulators to circumvent existing due process taxpayer protections and thereby impose a never-ending series of annual gas and diesel price increases on working families without any legislative oversight
Expand Fact #6
Taxes are used to generate revenue for general state spending, and constitutional protections for taxpayers, both procedural and substantive, apply over their imposition and collection. Fees on the other hand are imposed to recover the costs of providing a service. TCI by its design by GCC and state regulators attempts to circumvent existing due process taxpayer protections and thereby impose a never-ending series of annual gas and diesel price increases on working families without any ongoing legislative oversight. Instead, the decision to increase fuel prices will be made on an annual basis by a consortium of state environmental regulators whose decision-making criteria will be narrowly focused on program efficacy and maintaining and expanding program revenue streams. Massachusetts does not require enabling legislation as its Global Warming Solutions Act enacted in 2008 and further updated in 2021 provide authority for Massachusetts to enact TCI; however, Connecticut and Rhode Island require enabling legislation to implement TCI.
FICTION #7: TCI fees will be paid by the fuel suppliers who sell the polluting products.
FACT: Fuel suppliers will purchase the emission credits, but all costs will be passed along to the motoring public just as all taxes and fees are today.
FACT: Fuel suppliers will purchase the emission credits, but all costs will be passed along to the motoring public just as all taxes and fees are today.
Expand Fact #7
Just like in any industry, business supply chain costs, like those proposed under TCI for wholesale fuel suppliers, will become passed to distributors, who will then pass these costs onto the retailer, who will in turn pass these costs onto the consumer at the pump. Whether it’s called a tax or fee, the result will be the same for consumers who will bear these costs.
FICTION #8: TCI will only add 5-cents per gallon to the cost of gasoline and diesel.
FACT: There is no way to know how much TCI will add to the cost of a gallon of gasoline and diesel, but it will almost certainly be more than 5-cents and will increase every year.
FACT: There is no way to know how much TCI will add to the cost of a gallon of gasoline and diesel, but it will almost certainly be more than 5-cents and will increase every year.
Expand Fact #8
The allowances or emission credits fuel suppliers must purchase will be sold at quarterly public auctions where the price will be whatever the market will bear. Anyone can participate in the auction, and you do not need to be a regulated business. For example, California’s Cap and Trade program implements a similar auction program that’s proposed for TCI. During California’s most recent auction held on June 30, 2021[1], reveals more than 60% of registered auction participants were speculative buyers, not regulated entities. Credits purchased for their speculative value as opposed to their compliance value, will be held, and at some future moment become sold in a secondary market. Regulated entities that were not successful during one or more public auctions, will have to pay an added premium to acquire credits through these secondary markets; however, companies that hold the credits are under no obligation to sell them to others who need them further driving up their value and cost. TCI jurisdictions will be pressured to raise emission credit prices to increase revenues to fund new or existing transit projects, road and bridge maintenance, EV purchase incentives, EV charging infrastructure and other policy priorities. The GCC and state regulators cannot reasonably guarantee the price of emission credits will hold to only a 5-cent per gallon increase throughout the life of the program let alone guarantee it will not disrupt their state’s respective fuel supply and ability for anyone to obtain fuel they need during this decades long transition to alternative forms of energy. TCI’s design is unrealistic and a reckless public policy.
[1] California Air Resources Board, Compliance Instrument Tracking System Service Registrants Report June 30, 2021.
[1] California Air Resources Board, Compliance Instrument Tracking System Service Registrants Report June 30, 2021.
FICTION #9: TCI’s design will prevent motor fuel supply disruptions.
FACT: Fuel consumption is not predicted to decline as fast as TCI will remove fuel from the marketplace. When demand outpaces supply, the result will be fuel shortages.
FACT: Fuel consumption is not predicted to decline as fast as TCI will remove fuel from the marketplace. When demand outpaces supply, the result will be fuel shortages.
Expand Fact #9
TCI Memorandum of Understanding and regulations require a 3% annual reduction[1] in the number of emission credits offered for sale, along with a corresponding 3% reduction in each states allowable emissions cap. Requiring by law, a 30% reduction in consumption of these fuels in commerce over the next 10 years. The United States Energy Information Administration (EIA) predicts only a 6% reduction in demand[2] for motor fuels over the same period. Within three years of implementing TCI, wholesalers will be unable to meet projected consumer demand, thereby, creating supply shortages and outages, and leading consumers into panic-buying, hoarding, and other undesirable consequences.
[1] TCI Finalized Model Rule June 10, 2021, page 3, paragraph 2.
[2] U.S. Energy Information Administration, Annual Energy Outlook 2021, Transportation Sector, Motor Gasoline.
[1] TCI Finalized Model Rule June 10, 2021, page 3, paragraph 2.
[2] U.S. Energy Information Administration, Annual Energy Outlook 2021, Transportation Sector, Motor Gasoline.
FICTION #10: TCI design will prevent high or low-price per gallon price swings attributable to fuel suppliers having to purchase emission credits at the public auction.
FACT: TCI’s design only allows for an additional 10% infusion of emission credits per year above each state’s legally enforceable emission cap. Once exhausted no additional credits may be added per the program’s regulations[1] – period. If consumer consumption exceeds lawful sales under the declining cap, then high prices swings and shortages will occur. Its simple supply and demand economics.
[1] TCI Finalized Model Rule, section XX.11.3 (f)(3) – page 153, dated June 10, 2021.
FACT: TCI’s design only allows for an additional 10% infusion of emission credits per year above each state’s legally enforceable emission cap. Once exhausted no additional credits may be added per the program’s regulations[1] – period. If consumer consumption exceeds lawful sales under the declining cap, then high prices swings and shortages will occur. Its simple supply and demand economics.
[1] TCI Finalized Model Rule, section XX.11.3 (f)(3) – page 153, dated June 10, 2021.
FICTION #11: Each State will get their fair share of allowances and avoid any state-specific supply disruptions.
FACT: TCI is a regional program and a regional auction, which means states will not have their own dedicated allowances. TCI cannot allocate allowances to states based on consumption demand, meaning states will be subject to the success or failure of their fuel suppliers at the public auction and secondary emission credit market. State regulators will have no power to release additional fuel.
FACT: TCI is a regional program and a regional auction, which means states will not have their own dedicated allowances. TCI cannot allocate allowances to states based on consumption demand, meaning states will be subject to the success or failure of their fuel suppliers at the public auction and secondary emission credit market. State regulators will have no power to release additional fuel.
Expand Fact #11
As a practical matter, independence with respect to fuel supply will cease to exist for states that participate in TCI. If fuel suppliers operating in a certain state are unsuccessful at auction, then that state will see outages or disproportionate price hikes. Worse, because non-industry participants are allowed to participate at the quarterly auctions, speculation and hoarding of crucial allowance credits is certain to occur. There is nothing state regulators can do until the 3-year adjustment period occurs. Nothing.
FICTION #12: TCI has a built-in safety net to adjust the program as needed.
FACT: Major program adjustments, such as raising or lowering the emission cap or adding more or less emission credits, will only be made every 3 years, which means supply disruptions or other problems with the program will exist until the end of a 3-year compliance period, and likely much longer, years longer. The states will need to collect data, determine how an interruption occurred, propose a remedy, and reach agreement among themselves, and then each state will need to promulgate new regulations to implement the remedy. Not a quick or easy fix
FACT: Major program adjustments, such as raising or lowering the emission cap or adding more or less emission credits, will only be made every 3 years, which means supply disruptions or other problems with the program will exist until the end of a 3-year compliance period, and likely much longer, years longer. The states will need to collect data, determine how an interruption occurred, propose a remedy, and reach agreement among themselves, and then each state will need to promulgate new regulations to implement the remedy. Not a quick or easy fix
FICTION #13: The GCC and state regulators decision to model TCI’s design after the Regional Greenhouse Gas Initiative (RGGI) was appropriate.
FACT: The only similarity TCI has with the RGGI is that both are cap-and-trade invest programs. Otherwise, the differences are stark.
FACT: The only similarity TCI has with the RGGI is that both are cap-and-trade invest programs. Otherwise, the differences are stark.
Expand Fact #13
Within the RGGI states, fossil-fuel-fired electric power generators with a capacity of 25 megawatts* or greater ("regulated sources") are required to hold allowances equal to their CO2 emissions. While electric power generators operate in the wholesale marketplace, the vast amount of the electric power generation they provide is in the form of stable power purchase agreements with electric distribution companies (DISCOs) who control defined distribution service territories with millions of captive retailer customers. Public utility commissions regulate these service territories and must approve the electric generation rates charged to every consumer to ensure they reflect accurate market conditions.
Fuel suppliers on the other hand operate in a hypercompetitive marketplace where prices are not approved by regulators, but by world events, and national and global commodity markets. Fuel suppliers must earn their territory and compete against other suppliers. Wholesale prices are dynamic, constantly changing each and every day, if not multiple times each day. Moreover, they are competing to provide supply to thousands of fueling stations throughout the region who compete every day for consumers to fill up at their pumps. Retail motor vehicle gas consumers are not restricted to a given service territory and regularly shop for the best retail price.
RGGI is a model for a cap and trade invest program, but only when combined with similar participants and markets. TCI’s participants and markets bear no such resemblances. The programmatic transferability of RGGI in whole to TCI is not appropriate, even reckless.
Fuel suppliers on the other hand operate in a hypercompetitive marketplace where prices are not approved by regulators, but by world events, and national and global commodity markets. Fuel suppliers must earn their territory and compete against other suppliers. Wholesale prices are dynamic, constantly changing each and every day, if not multiple times each day. Moreover, they are competing to provide supply to thousands of fueling stations throughout the region who compete every day for consumers to fill up at their pumps. Retail motor vehicle gas consumers are not restricted to a given service territory and regularly shop for the best retail price.
RGGI is a model for a cap and trade invest program, but only when combined with similar participants and markets. TCI’s participants and markets bear no such resemblances. The programmatic transferability of RGGI in whole to TCI is not appropriate, even reckless.
FICTION #14: States that do not participate in TCI will end up paying higher gas prices but get no program benefit.
FACT: Fuel suppliers will not pass along the TCI fee to gas stations in non-participating states. While it is true that states will not receive TCI proceeds, residents and businesses in non-participating states will also not bear the burden of the higher cost for gasoline and diesel
FACT: Fuel suppliers will not pass along the TCI fee to gas stations in non-participating states. While it is true that states will not receive TCI proceeds, residents and businesses in non-participating states will also not bear the burden of the higher cost for gasoline and diesel
Expand Fact #14
Suppliers delivering fuel into TCI states will apply the TCI program costs but will not for fuel delivered and consumed into non-participating states. Suppliers can easily track where fuel is sold and apply the added costs appropriately. In fact, non-participating states are projected to see increased sales of their less expensive fuels, as customers from TCI bordering communities avoid the higher fuel costs. This is especially true for trucking companies.
FICTION #15: TCI will affect gas and diesel sales similarly.
FACT: The GCC and state regulators failed to recognize that trucks have a 1,000+ mile range and will bypass the region to re-fuel on diesel outside the TCI region to save money. Look for increased diesel sales in NY, NJ, PA, NH, ME, and VT outside the RI, CT, and MA corridor. As a result, TCI proceeds will not be realized, diesel excise tax revenue will not be collected, and local businesses will suffer.
FACT: The GCC and state regulators failed to recognize that trucks have a 1,000+ mile range and will bypass the region to re-fuel on diesel outside the TCI region to save money. Look for increased diesel sales in NY, NJ, PA, NH, ME, and VT outside the RI, CT, and MA corridor. As a result, TCI proceeds will not be realized, diesel excise tax revenue will not be collected, and local businesses will suffer.
FICTION #16: Under TCI, state legislatures will continue to have a role in balancing how gas and diesel fuel fees and taxes are assessed.
FACT: Participating in TCI cedes the state’s ability to control and balance future fees and taxes on gasoline and diesel to a coalition of regional regulators, who know little and care less about the price to the average consumer. Future legislative gas and tax increases will become that much harder, if not impossible to pass after TCI is enacted
FACT: Participating in TCI cedes the state’s ability to control and balance future fees and taxes on gasoline and diesel to a coalition of regional regulators, who know little and care less about the price to the average consumer. Future legislative gas and tax increases will become that much harder, if not impossible to pass after TCI is enacted
FICTION #17: TCI will generate $3 Billion in revenue for complimentary polices.
FACT: The actual amount that will go to emission reducing programs is far less after earmarks and administrative expenses
FACT: The actual amount that will go to emission reducing programs is far less after earmarks and administrative expenses
Expand Fact #17
A minimum of 35% of revenues are required to benefit communities underserved by transportation or overburdened by air pollution, 5% reserved for state administration, and an unknown share to fund TCI’s Administrative Organization. Meaning 40% or more of the proceeds are earmarked elsewhere. It’s fair to ask how much revenue will be left for measurable emission reduction programs, public transit projects, and transportation infrastructure maintenance. Connecticut’s proposed enabling legislation earmarked 50% of their share from TCI to communities underserved by transportation and overburdened by air pollution. MA, RI, and Washington D.C. proposals remain at the 35% minimum distribution.