Cap and trade for your car? Pa. is looking at limiting transportation emissions

*This story was updated at 7:56 pm with additional info from the Wolf administration.

Gov. Tom Wolf is kicking the tires on cutting carbon emissions from commuters’ and truckers’ tail pipes, even if it could result in an increase to the Keystone State’s already high gas prices.

The proposal, known as the Transportation and Climate Initiative, or TCI, does not originate with him. Pennsylvania was one of 11 states in 2010 to commence a study of how to slash carbon emissions from vehicles. 

According to a draft proposal finally released last year, TCI would reduce carbon emissions by 20 to 25 percent between 2022 and 2032.

It would work similarly to a cap and trade proposal. Participating states would require diesel fuel and gasoline wholesalers — not individual gas stations — to purchase carbon credits at auction.

Those states would then invest auction revenue in public transit, electric vehicle infrastructure, aid to those who purchase a zero-emissions vehicle, or even broadband expansion to encourage telecommuting.

Wolf’s spokesman, J.J. Abbott, cautioned that administration does not support an increase to the gas tax, and would need to review specific final language before anything would be approved.

But the plan would give Pennsylvania “hundreds of millions to invest in transportation, hopefully to ensure they have a safer, cleaner system,” Mark Szybist, an attorney with the Natural Resource Defense Council, told the Capital-Star. TCI projections put the price tag at $300 million to $1.2 billion in new funding.

Ideally, Szybist said, wholesalers would eat the cost, but acknowledged that some price increases could trickle down to consumers.

The initiative started in 2010, when 11 northeastern states, including Pennsylvania, signed a compact to “reduce greenhouse gas emissions” and minimize “reliance on high carbon fuels” in transportation, while promoting “sustainable growth” and building a “clean energy economy.”

That original decree was signed by former Democratic Gov. Ed Rendell’s PennDOT secretary, and his Department of Environmental Protection secretary, John Hanger.

Hanger told the Capital-Star that he signed the proposal as an economic development measure as well as a climate measure.

If the state reduced its reliance on petroleum and instead used more vehicles running on either electricity, natural gas, of biofuels, that would mean more dollars staying in the Pennsylvania economy.

“Texans love us burning oil to move around, Alaskans love it … I have no clue why we’d want to keep doing that when there are alternatives,” Hanger said.

The road to less carbon?

How much drivers would feel at the pump if the initiative moves forward depends on how far the carbon reductions go. 

TCI’s own preliminary model projected a 5 cent to 17 cent increase come 2022 in gas prices if the entire cost was passed to consumers. Such a change would be “within the range of historical variability” of gas prices, the model says.

Currently, Pennsylvanians pay roughly 11 cents more than the national average for gasoline, according to the American Automobile Association.

A hefty chunk of that price is because of the state’s 58 cent gas tax on every gallon, the second highest in the country, according to the Tax Foundation.

The state chapter of the American Automobile Association pointed out that TCI combined with a 2013 gas tax hike would mean consumers face a 43 cent increase in gasoline prices total.

Their concerns were raised in testimony to the Senate Environmental Resources and Energy Committee website, which is holding a hearing on the initiative Wednesday.

The association’s state executive director Ted Leonard wrote that the AAA  “increasingly concerned initiatives that increase costs to the motoring public while technology and car buying habits are making great strides in reducing green-house gas emissions.”

The assertion of progress can be found within TCI’s own modeling. The initiative projected a best case scenario where transportation emissions fall by 19 percent without any state action by 2032, due to increasing fuel efficiency and more electric vehicles on the road.

The worst case scenario from no action, according to the model, would be a six percent reduction in carbon emissions from transportation.

But environmental activists have pushed for action now, citing a need to immediately cut into global carbon emissions to stave off the worst effects of climate change. 

Transportation is the third largest emitter of carbon in Pennsylvania, according to the 2019 state greenhouse gas inventory. Moving people and products from place to place put 61 million metric tons of carbon into the atmosphere, or roughly a fourth of the state’s net carbon emissions.

Carbon emissions lead to climate change, which 97 percent of scientists agree is caused by human action.

A federal report released in 2018 estimated hundreds of billions of dollars in economic damage, as well as widespread public health risks as a result of that warming. 

The same report called for immediate action to reduce carbon emissions “would be needed to avoid the most severe consequences in the long term.”

What comes next?

Pennsylvania’s participation is far from certain, and if Wolf can enter the proposal without legislative authorization is an open question.

 Abbott pointed to the governor’s move to enter the Regional Greenhouse Gas Initiative, which limits carbon emissions from power plants, and added that Wolf is “interested in whether TCI could be a possible way to address vehicle pollution.”

At least one group, the Pennsylvania Chamber of Business and Industry, is arguing that TCI might not even be legal.

The state’s constitution, written in the 1960’s, says that gas taxes can be used “soley for construction, reconstruction, maintenance and repair of and safety on public highways and bridges.”

Citing the passage, chamber lobbyist Kevin Sunday wrote in Senate testimony that “it is unclear at this point whether the aims of the program are compatible with the state constitution’s restrictions on motor fuels taxes.”

Still, despite the Senate hearing, a final choice on the initiative has not yet been made according to Abbott.

“While the administration is committed to being a part of the TCI conversations, we will not make any decisions until the program is fully designed, modeling results are complete, and we get input from interested communities, businesses and other stakeholders,” Abbott said. “It is important that any plan is in the overall best interests of all Pennsylvanians.”

A final proposal on the program is expected this spring. The earliest it could start is 2022.