Even as Coronavirus disrupts business as usual, talks regarding the TCI (Transportation Climate Initiative) continue via video conference and email amongst the involved 12 States & Washington DC.
The TCI is a cap and invest system to curb emissions, with some estimates putting the reduction of carbon emissions at up to 3 times as much as we have achieved with the RGGI (Regional Greenhouse Gas Initialtive) enacted 10 years ago. (For a quick review of what the TCI entails and how it works, go here: What's the TCI & How Does It Work?)
The pandemic has caused adjusted timelines for the initiative. Current adjusted timelines for the TCI put the final Memorandum of Understanding (MOU) in the fall of this year, and it appears states planning on joining are looking at a launch date of January 2022.
As discussed prior, the impact of the TCI would be a tax of 5-17 cents per gallon, and as expected, its looking like 17 will be the number. At that level, transportation emissions, (which comprise 40% of greenhouse gas in the region) would drop by 25% by 2032. (As an aside - without the TCI being passed, emissions are expected to drop in that category by 19% based on efficiencies, etc - not including any pandemic induced curbing of emissions).
While we are seeing lower fuel prices, which would generally make passing the TCI or similar plans involving gas taxes more viable politically, on the other side of the equation there is legitimate concern that the economic impacts of COVID-19 make the timing of any tax increases tone deaf (at best), especially in the face of the unemployment levels we are seeing.
We wrote an article for the July issue of Oil & Energy detailing the progress being made on the TCI regional talks, as well as some of the details in contention. You can read that article here: TCI Moves Forward
