The tax on fuel distributors would raise billions of dollars over the next decade for investments in public transit and other cleaner forms of transportation, while encouraging fuel efficiency, subsidizing electric vehicles and charging stations, and other measures that would promote the transition away from fossil fuels. It could also lead to higher gas prices throughout the region, depending on the price of oil.
The number of states that will sign the agreement remains in flux, as negotiations over the emissions caps and other key details continue. Those that don’t sign on this month will be able to join later on. The pact is scheduled to take effect in 2022.
Kathleen Theoharides, secretary of the Massachusetts Executive Office of Energy and Environmental Affairs, said the agreement is vital for Massachusetts and other states to reach their goals of eliminating carbon emissions as much as possible by 2050.
“All of the states have ambitious climate goals, but none of us can hit those goals without reducing emissions from transportation,” she said in an interview.
Theoharides, who has chaired the initiative, said states have decided to revise the pact as a result of the pandemic, which has delayed the agreement for months.
The coronavirus made clear that the agreement should do more to benefit those most affected by pollution, she said. So the final terms will require each state to dedicate at least 35 percent of revenue to helping those in heavily polluted communities.
States will have discretion how to interpret that provision. But Theoharides said Massachusetts, which has been leading the talks, plans greater investments in public transit, efforts to increase open space and cool urban areas known as heat islands; more electric vehicle rebates; and greater subsidies to help residents access broadband Internet, making it easier to work from home.
The pandemic has also raised questions about the parameters of the agreement, as transportation emissions have declined substantially in the past year. Before the pandemic, the transportation sector was responsible for 28 percent of greenhouse gas emissions nationally and 40 percent of the region’s emissions.
In Massachusetts, traffic has steadily increased after plummeting at the start of the pandemic. But last month it remained 20 percent below pre-pandemic levels, compared to a 13 percent decrease nationwide. That has cast doubt on previous projections, which determine how stringent — and costly for drivers — the carbon allowances will be.
For example, more people continuing to work from home might mean less traffic. But it’s also possible that fewer people will return to using public transportation, meaning emissions could increase.
Governor Charlie Baker has noted this uncertainty, which some have interpreted as a sign that the Republican is backing away from the pact. At a press conference last month, he said it was important to “reexamine a lot of the assumptions” behind the agreement, though he said he remained “very much a fan.”
His comments buoyed critics of the initiative, which could raise gas taxes between 5 and 17 cents per gallon for as many as 52 million drivers along the East Coast.
“While the proponents do not want to describe it as a tax, for the consumer, it will feel like a tax,” said Paul Diego Craney, a spokesman for the Massachusetts Fiscal Alliance, a conservative group. “For a lot of people, that means they will have to pay higher fuel prices, and that will most likely fall the hardest on the working people and the poor.”
Shortly after Baker’s comments, the group released a poll they said showed a majority of state residents oppose the initiative.
“The governor should feel confident that he has the support of the people as he rethinks entering Massachusetts into the TCI compact during the pandemic,” Craney said.
But TCI supporters cited a new regional poll by the Yale Program on Climate Change Communication that found 70 percent of those surveyed supported the initiative.
Proponents say a regional pact would support major investments in public transit and other cleaner forms of transportation, while creating tens of thousands of jobs in those sectors in Massachusetts.
They also pointed to a recent study by researchers at the Harvard T.H. Chan School of Public Health, Boston University, and other universities that estimated the initiative would provide health benefits worth more than $11 billion over the next decade.
Less pollution from cars and trucks would save lives, reduce childhood asthma, and reduce the health disparities of people of color, who on average breathe 66 percent more air pollution from vehicles than white residents, the study found.
“Every reputable source of analysis . . . shows that the TCI program will deliver net economic benefits, will be a job creator, and will save us billions of dollars in avoided health costs,” said Jordan Stutt, carbon programs director for the Acadia Center, an environmental advocacy group in Boston. “We need TCI and other policies to deliver cleaner air, better transportation options, and leadership on climate change.”
Chris Dempsey, director of Transportation for Massachusetts, another advocacy group that supports the initiative, compared the opposition to those who claimed the Regional Greenhouse Gas Initiative, a similarly designed, nine-state regional cap-and-invest system for power plant emissions, would cause prices to spike. That pact, however, helped reduce power plant emissions from Maryland to Maine by at least 40 percent below 2005 levels without raising electricity prices, according to RGGI.
“TCI, which is modeled after RGGI, will help us do the same thing for transportation, saving consumers and businesses on their transportation costs while also improving the quality of the air we all breathe,” he said.
Vicki Arroyo, executive director of the Georgetown Climate Center, which has helped facilitate the agreement, said she was optimistic that a “critical mass” of states would join the pact.
But she said there continued to be some “horse trading” between states as they negotiated the final details, such as how proceeds will be apportioned, how to report emissions, and among other things, whether there will be a controlling authority overseeing the pact.
Many states, not including Massachusetts, will have to win approval in their legislatures before they can participate.
“No one has taken their foot off the accelerator,” she said.