FIRST WAVE: ELECTRIFY EVERYTHING 1950s - 1970s
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Transportation Climate Initiative: A case study
And don't think motor fuels are off the hook either. Though the idea of electric vehicles has been around for decades, they've only become a practical alternative to internal combustion engines in the last dozen years or so, and when that happened, they became the darling of the environmental movement, and then state regulators and the utilities. Environmentalists and regulators, as explained above, wanted to eliminate fossil fuels and CO2 emissions from transportation accounts for some 40% of all such emissions. Utilities of course saw electrification of transportation as a gold mine for them.
The Transportation Climate Initiative (TCI) is a joint program of thirteen northeastern states that seeks to curb CO2 emissions from the transportation sector. While conceived in 2010, it wasn’t until 2018 that nine of these states, Connecticut, Delaware, Maryland, Massachusetts, New Jersey, Pennsylvania, Rhode Island, Vermont, Virginia, and the District of Columbia agreed to pursue a plan to develop TCI further. Of these nine, in 2020 eventually only CT, MA, RI and DC decided to actually pursue implementing TCI. To make the multi-state program viable, it was thought that TCI needed to be adopted by at least three states, and CT, MA and RI would serve as this core. MA could enter TCI through executive action by its governor. CT and RI required adoption by their legislatures.
TCI’s goal was to reduce CO2 emissions in the transportation sector by reducing the amount of gasoline and diesel that could be sold by 30% over ten years. At the same time it would raise the cost of fuel by forcing suppliers to purchase the right to sell fuel through regional auctions. The proceeds from these auctions would be used to build electric vehicle (EV) charging stations, to give rebates to those buying EVs, and to fund various infrastructure in major cities.
For the past two years, CEMA has been actively lobbying against TCI in the region, with the idea that if it fails in any of the three core states, the entire program would collapse. Of course our primary effort was in Connecticut. We did extensive press outreach. We testified at hearings and lobbied legislators. We worked with allies in the legislature and with private think tanks. Our primary efforts were to characterize TCI as a tax on fuel. This is because suppliers would bid against each other for the right to sell fuel (through the purchase of so-called CO2 allowances). The cost to purchase these allowances would raise the price of fuel which would be passed on to consumers. CEMA successfully “branded” TCI as a tax, and this ultimately led to its failure in the legislature last spring, when even the president of the CT Senate called it a “regressive tax.”
Against our arguments, TCI proponents advanced an ever-changing narrative. First, TCI would fund the state's Special Transportation Fund and pay for infrastructure. Then, TCI would help save the world and stave off climate change by reducing Connecticut's CO2 emissions. Finally, TCI would save the health of children in inner cities by reducing the toxic pollution from automobiles. As you can see, their argument became ever more emotional and political.
Despite this victory in the legislature, there were calls all summer long to hold a special session in the fall to adopt TCI. Environmental groups such as Save the Sound pushed hard for this, even hiring a powerful lobbyist to persuade legislators to call for a special session. In the meantime mega-corporations including British Petroleum, Shell and Ford were also lobbying for TCI, running advertising all spring and summer. CEMA countered by running our own press releases and holding press conferences. We worked with influential bloggers and non-profit libertarian advocacy groups like the Yankee Institute in Connecticut and MassFiscal in Massachusetts. We talked not just about the TCI tax, but also how the auction system would create fuel shortages in CT as suppliers who lost their bids in the auction would have no fuel to sell. The early fall came and went and still no special session. By now, the question was whether Governor Lamont would bow to environmental pressure, and call for TCI to be adopted next year, an election year.
As an example of the work we did, the graph below shows the growing gap between consumer demand for motor fuels (blue line) and the ever shrinking supply permitted under TCI (red line). In fact our analysis shows that in the tenth year of the program, the shortfall between supply and demand is 361 million gallons of gasoline and diesel, and the cumulative shortfall over ten years exceeds 1.5 billion gallons. The gas lines you saw in the southeastern U.S. earlier this year due to the Colonial Pipeline shutdown would look like a walk in the park compared to what TCI will cause. Lines stretching for miles; rationing; people fleeing the state in droves.
The Transportation Climate Initiative (TCI) is a joint program of thirteen northeastern states that seeks to curb CO2 emissions from the transportation sector. While conceived in 2010, it wasn’t until 2018 that nine of these states, Connecticut, Delaware, Maryland, Massachusetts, New Jersey, Pennsylvania, Rhode Island, Vermont, Virginia, and the District of Columbia agreed to pursue a plan to develop TCI further. Of these nine, in 2020 eventually only CT, MA, RI and DC decided to actually pursue implementing TCI. To make the multi-state program viable, it was thought that TCI needed to be adopted by at least three states, and CT, MA and RI would serve as this core. MA could enter TCI through executive action by its governor. CT and RI required adoption by their legislatures.
TCI’s goal was to reduce CO2 emissions in the transportation sector by reducing the amount of gasoline and diesel that could be sold by 30% over ten years. At the same time it would raise the cost of fuel by forcing suppliers to purchase the right to sell fuel through regional auctions. The proceeds from these auctions would be used to build electric vehicle (EV) charging stations, to give rebates to those buying EVs, and to fund various infrastructure in major cities.
For the past two years, CEMA has been actively lobbying against TCI in the region, with the idea that if it fails in any of the three core states, the entire program would collapse. Of course our primary effort was in Connecticut. We did extensive press outreach. We testified at hearings and lobbied legislators. We worked with allies in the legislature and with private think tanks. Our primary efforts were to characterize TCI as a tax on fuel. This is because suppliers would bid against each other for the right to sell fuel (through the purchase of so-called CO2 allowances). The cost to purchase these allowances would raise the price of fuel which would be passed on to consumers. CEMA successfully “branded” TCI as a tax, and this ultimately led to its failure in the legislature last spring, when even the president of the CT Senate called it a “regressive tax.”
Against our arguments, TCI proponents advanced an ever-changing narrative. First, TCI would fund the state's Special Transportation Fund and pay for infrastructure. Then, TCI would help save the world and stave off climate change by reducing Connecticut's CO2 emissions. Finally, TCI would save the health of children in inner cities by reducing the toxic pollution from automobiles. As you can see, their argument became ever more emotional and political.
Despite this victory in the legislature, there were calls all summer long to hold a special session in the fall to adopt TCI. Environmental groups such as Save the Sound pushed hard for this, even hiring a powerful lobbyist to persuade legislators to call for a special session. In the meantime mega-corporations including British Petroleum, Shell and Ford were also lobbying for TCI, running advertising all spring and summer. CEMA countered by running our own press releases and holding press conferences. We worked with influential bloggers and non-profit libertarian advocacy groups like the Yankee Institute in Connecticut and MassFiscal in Massachusetts. We talked not just about the TCI tax, but also how the auction system would create fuel shortages in CT as suppliers who lost their bids in the auction would have no fuel to sell. The early fall came and went and still no special session. By now, the question was whether Governor Lamont would bow to environmental pressure, and call for TCI to be adopted next year, an election year.
As an example of the work we did, the graph below shows the growing gap between consumer demand for motor fuels (blue line) and the ever shrinking supply permitted under TCI (red line). In fact our analysis shows that in the tenth year of the program, the shortfall between supply and demand is 361 million gallons of gasoline and diesel, and the cumulative shortfall over ten years exceeds 1.5 billion gallons. The gas lines you saw in the southeastern U.S. earlier this year due to the Colonial Pipeline shutdown would look like a walk in the park compared to what TCI will cause. Lines stretching for miles; rationing; people fleeing the state in droves.
In the end, Lamont was saved from having to make this decision once Congress passed their infrastructure bill, giving Connecticut billions of dollars in infrastructure spending; and because of the recent spike in gas prices that made a new fuel tax even more unpalatable. Now was not to the time to add a TCI tax on top of this this, Lamont announced at his Nov. 16 press conference. Later, he did say that if the legislature did pass a TCI bill next spring, he would sign it. Legislative leaders rebuffed this, saying “no thanks,” and that if Lamont really wanted TCI, he’d have to lead from the front, not from the rear.
With Connecticut’s fall, Massachusetts and Rhode Island were not far behind. Throughout the year, CEMA worked with NECSEMA – the New England Convenience Store - and EMARI, the Energy Marketers Association of Rhode Island, in developing anti-TCI messaging to use in MA and RI, for local legislators and the press. We held a press conference with EMARI in Connecticut, and one in Massachusetts. On Nov. 18, two days after Lamont pulled out of TCI, MA Governor Baker announced he was pulling out of TCI as well for the same reasons as Lamont. And two days after that, on Nov. 20, Rhode Island dropped out, blaming CT and MA since there no longer existed a critical mass in which RI could participate.
And yet despite our success, we were lucky. It was touch and go throughout the year, and only the spike in fuel prices and the infrastructure dollars from Congress allowed Gov. Lamont to put TCI on the back burner and resist the demands from the utilities, environmentalists, and even from within his own administration.
We won't be so lucky the next time. We need to make our own luck, this time with more resources.
With Connecticut’s fall, Massachusetts and Rhode Island were not far behind. Throughout the year, CEMA worked with NECSEMA – the New England Convenience Store - and EMARI, the Energy Marketers Association of Rhode Island, in developing anti-TCI messaging to use in MA and RI, for local legislators and the press. We held a press conference with EMARI in Connecticut, and one in Massachusetts. On Nov. 18, two days after Lamont pulled out of TCI, MA Governor Baker announced he was pulling out of TCI as well for the same reasons as Lamont. And two days after that, on Nov. 20, Rhode Island dropped out, blaming CT and MA since there no longer existed a critical mass in which RI could participate.
And yet despite our success, we were lucky. It was touch and go throughout the year, and only the spike in fuel prices and the infrastructure dollars from Congress allowed Gov. Lamont to put TCI on the back burner and resist the demands from the utilities, environmentalists, and even from within his own administration.
We won't be so lucky the next time. We need to make our own luck, this time with more resources.
