As reported by John McClaughry in the Vermont Biz article on December 17th the Georgetown Law Center revealed its long-awaited Transportation
and Climate Initiative (TCI) draft Memorandum Of Understanding (MOU). It will
be open for on-line comments until February 28. At some point after that Gov.
Scott will be asked to sign Vermont into TCI. Presumably the legislature would
have to enact some provisions to make it enforceable on Vermont fuel dealers.
Here are twelve questions and
answers that will explain what TCI is and expects to do.
Q: What is TCI? TCI is a multistate
regional agreement to drive up the price of motor fuel (gasoline and on-road
diesel). It proposes to start at five, nine or seventeen cents per gallon, and
escalate upward from that, with no declared maximum.
Q: Why do the TCI backers want to
drive up the price of motor fuel? Because they are convinced that “climate
change poses a clear, present, and increasingly dangerous threat to the
communities and economic security of each [participating state].” The MOU
says that the participating states will “need to implement bold initiatives to
mitigate the impacts of greenhouse gas emissions from the transportation
sector,” which produce 40% of human-caused emissions.
Q: How will TCI drive down those
emissions? By driving up the price of gasoline and diesel fuel so you will
drive less, drive smaller cars, use electric vehicles, walk, ride bicycles, use
public transportation, move closer to school and work, and so on.
Q: How does TCI drive up motor fuel
prices? It creates what it calls a “cap and invest” system. TCI sets a cap, or
limit, on carbon dioxide emissions from burning motor fuel. Every distributor
of motor fuel – of which there are eighty in Vermont – will be required to
purchase “allowances” to match the motor fuel sold in each reporting period.
Q: So motorists, including
passenger cars, pickups, SUVs, vans, school buses, delivery trucks, contractor
vehicles, milk tankers, ambulances, and motorcycles will end up paying for the
allowances? Yes, of course they will.
Q: What does the state get for
imposing these costs on motorists? TCI will distribute among the participating
states some fraction of the revenue from its sale of “allowances”, according to
an as yet undetermined formula. The states are supposed to use these revenues
to further drive down gasoline and on-road diesel use, and “help their
residents transition to affordable, low-carbon transportation options”. Paying
people to buy electric cars, and building charging stations for them, is a
recommended use of the funds. However, the states can use what they receive for
anything their legislature desires.
Q: How many “allowances” will TCI
issue? As many it sees fit. TCI will invent them out of thin air, and motor
fuel distributors will be required to go into TCI’s auction market to buy
enough of them with real money to match their motor fuel deliveries over a
preceding reporting period. The cost of these “allowances” will be included in
the price you pay at the pump.
Q: Won’t this plan hit hardest on
working people and the poor, especially in Vermont’s rural areas? Of course.
It’s regressive.
Q:
How much will the preferred TCI scenario reduce carbon dioxide emissions from
motor fuel? Drew Cline of New Hampshire’s Josiah Bartlett Center analyzed the
TCI economic model. He found that the “reference case” used by the Georgetown
Climate Center to project what would happen from 2022 to 2032 if states did not implement the TCI would
likely be a 19% reduction in carbon dioxide emissions. If TCI is implemented, emissions are
projected to fall by between 20% and 25% over that decade. So TCI will produce
an additional emissions reduction of between 1 and 6 percentage points on top
of a presumed reduction of 19 percent. In short, TCI would extract $56 billion
from motor fuel users to reduce carbon dioxide emissions by a little more than
5 percent over ten years.
Q: Will that reduction of emissions
actually reduce “climate change”? Certainly not measurably. Probably not at
all.
Q: Wait a minute. Isn’t this TCI
“cap and invest” scheme just another carbon tax in a fancy package , designed
to make it look like it’s not a carbon tax? Yes, of course.
Q: Gov. Phil Scott has steadfastly
promised to veto a carbon tax. Won’t he reject the MOU, as New Hampshire
Governor Chris Sununu has already done, and veto any legislation to force
Vermont fuel dealers to buy those funny money TCI allowances that will drive up
the price of gasoline and diesel fuel for all Vermonters? As of now he
won’t say, so if you don’t want to see the TCI drive up your fuel prices year
after year, it wouldn’t hurt to encourage him to strengthen his resolve.
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