With regional transportation pact in doubt, Vermont considers other policies

Climate advocates in Vermont are considering new strategies for reducing transportation emissions as the prospects fade for establishing a regional cap-and-invest program.

Vermont’s initial Climate Action Plan, released Dec. 1, leans significantly on the proposed Transportation and Climate Initiative for meeting the state’s mandatory emission targets. The Northeast interstate initiative would require fuel suppliers to buy annual pollution allowances, which would shrink in supply each year while also generating revenue for clean transportation projects in participating states.

Weeks ahead of the Vermont plan’s release, however, the governors of Connecticut, Rhode Island, and Massachusetts announced that their states would not join the transportation program after all, dealing a blow that has left its future uncertain.

A group within Vermont’s climate council recently began discussions on other potential policies to reduce transportation emissions. They include adopting a statewide transportation fuel standard or joining a cap-and-invest program led by California and Quebec.

Vermont’s Global Warming Solutions Act, adopted in 2020, set a legally binding requirement to cut emissions 80% from 1990 levels by 2050. At 40%, transportation emissions make up the biggest share of Vermont’s greenhouse gas emissions, the nonprofit Energy Action Network found in an analysis of 2018 state data.

The 23-member Vermont Climate Council was created by the same legislation to develop a climate action plan to guide state policy. Among the recommendations in its first action plan was for the state to join the Transportation and Climate Initiative, known as TCI.

One of opponents’ biggest points of resistance to the initiative has been its impact on gasoline prices. Estimates vary, but the TCI website projected a 5-cent increase per gallon in 2023.

“To me, the high cost and price volatility of gasoline is an argument to transition off, not double down on it,” said Jared Duval, executive director of the Energy Action Network and a member of the Climate Council’s transportation group.

With electricity costs far lower than gasoline prices, electric vehicles could help drivers save money. That is, if they can afford the upfront cost — something the Transportation and Climate Initiative could be used to help them do.

Duval and the other group members recently issued a memo to launch discussions about two alternative strategies on transportation that could be incorporated into an amended state climate plan in June. One idea is to implement a transportation fuel standard. The other is to join the Western Climate Initiative, a cap-and-invest program led by California whose members also include Quebec, which shares a border with Vermont. (The other member is Nova Scotia.)

Duval said the transportation fuel standard offers key benefits for Vermont. It would require fossil fuel suppliers to decarbonize, either by changing the fuels they sell or by purchasing credits to offset their emissions. As the memo notes, performance standards have been used in other sectors such as electricity, through which states including Vermont have pushed utilities to decarbonize their generation sources. Several states, including California, Oregon and Washington, have already adopted standards for transportation fuels.

A transportation fuel standard would also mirror the heating fuel standard recommended in Vermont’s Climate Action Plan. That recommendation has already led the state’s legislature to begin drafting a law to address Vermont’s other major emissions contributor: building heating fuels. It’s possible the building fuel standard could eventually be extended to cover the transportation sector.

The Western Climate Initiative may be more challenging to join, given that Vermont’s governor hasn’t supported the cap-and-invest program already on the table in the Northeast. Still, the Western initiative has one advantage over the Transportation and Climate Initiative simply by being up and running.

“I think the clean transportation standard makes a lot of sense,” said Jordan Stutt, carbon programs director at Acadia Center. “We’ve seen the low carbon fuel standard approach elsewhere.” He added that other states had been considering similar standards in addition to the Transportation and Climate Initiative, and if TCI does end up happening, the two policies would complement each other.

Stutt’s work has focused on advancing TCI. He said the program “is now a fully developed policy that states have in their back pocket. And while it’s still a possibility, it has a very uncertain future right now and states cannot afford to wait on that.” They need to invest in new clean transportation solutions now, he said.

As a reference point, the transportation group in Vermont has pointed to Oregon and Washington, both of which have implemented transportation fuel standards but whose leaders have opted not to join the Western Climate Initiative. Oregon in December implemented a new carbon cap for all fossil fuel emissions, which will likely eclipse the transportation standard the state already has.

Angus Duncan, former chair of Oregon’s Global Warming Commission and a consultant for the Natural Resources Defense Council, helped write the state’s climate strategy and greenhouse gas emissions reduction goals, adopted in 2007. The goals and policy recommendations have been important for the state to make progress on climate goals, he said, noting a 2019 New York Times analysis that found per capita emissions dropped in Portland more than 20% from 1990 to 2017. At the same time, total emissions rose nearly 25% in the same period.

“There’s bad news and good news,” he said, “but the bad news way outweighs the good news.” A fuel standard adopted by Oregon in 2015 “has not moved the pump price of gasoline very much at all,” he said. That’s a good thing in that it helps prove wrong warnings opponents initially gave that the standard would lead to a rise in gas prices. But it’s also a bad thing, he said, because without a steady, discernible increase in gas prices, people won’t be incentivized to switch to electric vehicles.

Duncan said that overall, Oregon’s fuel standards and other policies, including adopting California’s vehicle efficiency standard, put it on a track similar to the path it would have been on had it joined the Western Climate Initiative. Joining that pact could still help Oregon invest in more clean transportation solutions, he said, but it’s not likely to happen since it’s difficult to get state leaders on board with something that could mean surrendering Oregon’s policy initiatives to other states. Oregon is part of an interstate electricity planning body with the three other Northwest states, but while that body makes recommendations, it doesn’t require members’ compliance.

He said the new carbon cap in Oregon will eventually lead to an increase in gas prices. That could help incentivize drivers to start using electric vehicles, he said, but that shift will depend on the state and electric utilities also investing in electric vehicle incentives including public fast-charging stations, particularly in low-income areas where residents often can’t have a charger at home. At the same time, he said, vehicle manufacturers — which he noted small states like Oregon have no control over — need to make electric vehicles available at lower costs and with greater driving ranges so drivers can travel long distances.

If that happens, he said, “we can expect that EV penetration curve, which is relatively flat right now, to bend sharply upwards.”

“I’ve not fully given up hope [on TCI], and I feel like the Transportation and Climate Initiative … has been underway for well over a decade,” said Johanna Miller, energy and climate program director at the Vermont Natural Resources Council and a member of the transportation subgroup that released the new memo. “I’m an optimistic person, so I’m hopeful that it is not completely off the table, but I’m also pragmatic.”

She and others noted that while federal pandemic relief and infrastructure aid could help Vermont in the near term, the state needs a long-term strategy to reduce transportation emissions.

“Whether that’s a performance standard, like a clean transportation standard … or another cap-and-invest program like the Western Climate Initiative — I think they’re both promising and I think they warrant a lot more analysis, especially embedded in the Vermont context,” Miller said.

Read the full article at Energy News Network here.