States make climate policies a 2019 priority

Despite federal climate policy rollbacks, governors and cities have decided to take up the mantel on climate leadership. Nine Northeast and Mid-Atlantic governors and the mayor of Washington, D.C. announced that they will move forward with a plan that prioritizes clean transportation and ambitious climate goals.

The leaders of Connecticut, Delaware, Maryland, Massachusetts, New Jersey, Pennsylvania, Rhode Island, Vermont, Virginia, New York and Washington D.C. have all made recent announcements that place climate change as a key priority for their administration in the coming year.

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New York Gov. Andrew Cuomo started by announcing climate justice policy as a key pillar in what he hopes to achieve in 2019. Climate hawks will be closely watching his State of the Union Address on Jan. 9 for details.

However, Cuomo was noticeably absent from joining nine other northeast states, as they reported progress on the ongoing Transportation Carbon Initiative (TCI). Following a year of public hearings, the states will now spend the next year developing policies that advance clean transportation and cut carbon pollution from the sector. 

Connecticut, Delaware, Maryland, Massachusetts, New Jersey, Pennsylvania, Rhode Island, Vermont, Virginia, and Washington DC are all moving forward with a cap and invest program for transportation fuels. The climate agenda aims to make roadways more efficient and accessible, and to reduce carbon emissions from transportation by mid-century.

Cap-and-trade works by requiring polluters and distributors of fossil fuels to purchase a permit otherwise known as an allowance, for every ton of carbon dioxide they emit. Together state governments auction off a number of allowances each year, with the number auctioned decreasing annually. In this way the market is allowed to decide the price of pollution while raising vital revenue that each state can use for clean transportation investment.

A similarly designed program already exists in the Northeast, the Regional Greenhouse Gas Initiative (RGGI), covering emissions from the electricity sector. While there have been significant reductions in emissions from electricity, transportation remains one of the sectors where emissions are rising. The states hope to address this issue, and generate revenue for an aging and inefficient transportation infrastructure as they do so. 

District of Columbia Mayor Muriel Bowser made an even more ambitious announcement that she aimed to increase the district’s renewable portfolio standards to 100 percent by 2032. While other cities have made similar commitments, this is by far the most expedient and ambitious RPS mandate to date.

In Massachusetts, the stage was set for this announcement when the Commission on the Future of Transportation released an extensive report on what transportation issues need to be addressed in the next 20 years. The infrastructure outlined in that report will need new funding sources, for which carbon pricing aims to play a big role. Introducing a policy to the transportation sector that puts a price on pollution will therefore be an essential tool to both reduce carbon pollution in the region to a safe level, whilst raising revenue for vital transportation projects.

While the TCI announcement should be celebrated as progress, the process still has a long way to go. A recent report on RGGI and California’s cap-and-trade policy found that cap-and-trade programs in North America have auctioned too many allowances and kept carbon prices low, leading to diminished environmental impact. Given the dire consequences and 12-year window of action outlined by the IPCC’s recent report, TCI will need stronger design and quicker implementation than previous iterations of cap-and-trade to have meaningful impacts.

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The joint announcement from the 10 participating jurisdictions includes a one-year timeline to produce a policy proposal, a process that so far has happened through executive offices and their administrative agencies. Now the process enters a new phase. Recent lessons in Paris have shown the importance in equitable policy design and further public engagement in the policy design and implementation process. Governors will likely turn towards their state capitals to support and further the agenda. RGGI took four years to implement after the first Memorandum of Understanding was drafted in 2005, a step that has not yet occured for TCI. Due to an inflated CO₂ budget, it then took an additional five years before substantive adjustments were made to the RGGI cap in order to improve the program’s effectiveness. Leaders will have to learn from this and improve upon design to meet more ambitious pollution reduction targets.

The TCI announcement is applauded by a wide variety of organizations and stakeholders, and shows that states in the region have the political will to enact ambitious climate policy. If the initiative can progress in an expedient, inclusive, and transparent manner, the region may find itself at the national forefront and pave the way for states to join the movement for substantive climate policy in the coming decade.

Michael Green is the executive director at Climate XChange in Boston. CXC provides research and insights into carbon pricing and climate policy.