Northeast States Tap the Gas Pump for Carbon Emissions Cuts

by Gerald B. Silverman (Bloomberg) Motor fuel could be the next target for controlling greenhouse gas emissions in the Northeast, as seven states that have already clamped down on power plants train their sights on the transportation sector.

The states are considering a new cap-and-trade program modeled after the Regional Greenhouse Gas Initiative, which has capped carbon emissions in the power sector since 2008.

The Georgetown Climate Center, which is helping along the effort under its Transportation and Climate Initiative, will be holding several “listening sessions” throughout the region next year.

The initiative is designed to reduce greenhouse gas emissions and provide a source of revenues to improve transportation infrastructure. A cap-and-trade model such as RGGI would require that proceeds from allowance auctions be used for clean transportation, improved public transportation, and zero emissions vehicles.

The policy framework for the program was laid out in a report from the Transportation and Climate Initiative, which outlines the key options and the benefits and drawbacks from different approaches. The report didn’t make a specific recommendation but favored a cap-and-trade program that covers a minimum of gasoline and on-road diesel fuels.

The greatest benefits would come from requiring prime suppliers of gas and diesel—which are already defined by the U.S. Energy Information Administration—to purchase carbon allowances, according to the report.

The report identified two other options for the program: Use existing tax structures through revenue and tax departments or require refineries and fuel importers to acquire carbon allowances.

Kenny Stein, policy director for the Institute for Energy Research, a free-market advocacy group that opposes cap-and-trade programs, said a transportation sector cap-and-trade program would amount to a “not-so-hidden gas tax” that will raise the price of gas at the pump.

The states should focus on other strategies to meet their long-term greenhouse gas emissions goals, Darren Suarez, director of government affairs at the Business Council of New York State, said. He said the states should provide greater support for electric vehicles and the necessary infrastructure, rapid transit, and new battery technologies.

A great deal of groundwork has already been laid at the staff and agency level for the transportation program. “It’s been a long time coming,” Morris (Jackson Morris, director of the Eastern Energy Project at the Natural Resources Defense Council) of the NRDC said.

However, setting up the program will be politically challenging given the clout of the oil industry, Gatti (Daniel Gatti, a clean vehicles policy analyst for the Union of Concerned Scientists) said. READ MORE