Atlantic Seaboard states embrace measures to reduce greenhouse gas emissions

by Peter Maloney
APPA News
January 5, 2021

The New York State Department of Environmental Conservation (DEC) has finalized guidance on developing a “value of carbon” metric.

Separately, three states and the District of Columbia have signed a memorandum of understanding (MOU) to reduce their transportation sector greenhouse gas emissions.

In New York, the DEC said a value of carbon metric would help state agencies estimate the value of reducing CO2 and other greenhouse gas emissions. (The value of carbon guidance and supplemental documents are available on the DEC’s website).

The value of carbon guidance, developed by DEC in consultation with the New York State Energy Research and Development Authority (NYSERDA) and Resources for the Future, establishes a monetary value for the avoided emissions of CO2, methane, and nitrous oxide.

When developed, the metric would be “broadly applicable to all State agencies and authorities to demonstrate the global societal value of actions to reduce greenhouse gas emissions,” the DEC said.

The DEC noted, however, that its value of carbon guidance is not a regulation, nor does it propose a CO2 “price, fee, or compliance obligation.”

The DEC said the guidance “establishes a value of carbon focused on the federal social cost of carbon and incorporates public comments DEC received when the draft guidance was proposed earlier this year.”

DEC’s guidance recommends a lower central discount rate of two percent, which should be reported alongside a one and three percent discount rate for informational purposes. Use of the lower central discount rate translates into a 2020 central value of CO2 of $125 per ton; methane of $2,782 per ton; and nitrous oxide of $44,727 per ton.

MOU

The MOU calls for Connecticut, Massachusetts, Rhode Island, and Washington D.C. to participate in the Transportation and Climate Initiative Program (TCI-P), a cap-and-invest program that aims to reduce transportation emissions and raise money to speed the shift to low emitting, safer and more affordable transportation alternatives.

The TCI-P is an ongoing effort among 12 states that seeks to tax fuel suppliers and invest the proceeds in alternatives such as public transportation and clean vehicles and fuels.

Eight of those states chose not to join the launch of the Transportation and Climate Initiative Program, but instead issued a statement, Next Steps for the Transportation and Climate Initiative, in which they committed to continue to engage in “collaboration and individual actions to equitably reduce air pollution, create healthier communities, and invest in cleaner transportation.”

The eight states have the option to sign on to the full program any time in the next three years. The eight states are Delaware, Maryland, New Jersey, New York, North Carolina, Pennsylvania, Vermont, and Virginia.

The TCI-P will require large gasoline and diesel fuel suppliers to purchase allowances for the emissions caused by the combustion of fuels they sell in the regions.

The MOU calls for the proceeds of the auction allowances to be invested “in ways that help both urban and rural residents, including improving and expanding public transportation; zero-emission buses, cars, and trucks; electric vehicle charging infrastructure; development of interstate electric vehicle charging corridors; improving high speed wireless internet in rural and low-income areas to allow for teleworking; repairing existing roads and bridges; and providing safer bike lanes and sidewalks.”

The TCI-P jurisdictions have committed to invest 35 percent of annual allowance revenue in communities underserved by current transportation options and with disproportionately high levels of pollution.

Each participating jurisdiction will have an individual program adopted and implemented under its independent legal authority. And each jurisdiction has the authority to decide how to invest program proceeds.

The MOU calls for the four jurisdictions to develop and release a model rule that will establish a multi-jurisdictional base annual carbon dioxide (CO2) emissions cap starting in 2023, which will be equal to the sum of the TCI-P participating jurisdictions’ CO2 emissions budgets set out in the MOU. From 2023, the base annual CO2 emissions budgets are scheduled to decline by 30 percent by 2032, by equal amounts each year.

The first TCI-P reporting period is set to begin as early as Jan. 1, 2022, and the first compliance period will begin Jan. 1, 2023 or at such later time as at least three jurisdictions have completed the legal processes required to implement their individual programs. The MOU participants intend to conduct one or more early CO2 allowance auctions in 2022.

Massachusetts projects TCI-P will reduce motor vehicle emissions in the state by at least 26 percent and generate over $1.8 billion by 2032. Rhode Island projects the program will provide $20 million annually for public transit, safe streets for bikers and pedestrians, and other green projects.

Despite the potential for eight more states to join the program, there also has been push back against the Transportation and Climate Initiative. Three retail fuel trade groups ─ the National Association of Convenience Stores, the Society of Independent Gasoline Marketers of America, and NATSO, which represents truck stops and travel plazas ─ are urging states to reconsider participation in the Transportation and Climate Initiative.

The plan, as currently structured, “will not work,” the groups said in a statement and would “result in higher costs without any meaningful environmental benefit.”

The governors of New Hampshire and Vermont have declined to implement the program in favor of waiting to see how it unfolds. And several environmental justice organizations have voiced their opposition to TCI-P.