The state’s transportation system is literally riddled with challenges: Potholed roads, inadequate public transit service, soul-crushing traffic congestion, and tailpipe pollution that both causes asthma and heart disease and is the state’s largest source of greenhouse-gas emissions. To address these problems, Governor Baker has been working with a bipartisan group of governors from nearby states to advance a regional, market-based program known as the Transportation & Climate Initiative (TCI).
TCI is based on a similar initiative that eleven states, including Massachusetts, put in place in 2009 called the Regional Greenhouse Gas Initiative (RGGI). Most people have never heard of RGGI, but it is one of the most consequential environmental policies the state has adopted in decades. It works by requiring power plants to purchase emissions credits for the pollution they create. The number of credits available for sale across the participating states is capped to ensure total pollution is limited and declines over time. Coal plants and other heavy polluters have to buy a lot of credits. Natural-gas plants have to buy a moderate amount. Clean-energy plants powered by solar and wind don’t have to buy any at all. The program works. Emissions from power plants in the region have fallen 90% faster than the rest of the country.
When RGGI was being developed, opponents said that it would raise electricity costs and hurt the economy. As it turns out, they were wrong on both counts. Since RGGI was put in place, electricity prices in RGGI states have declined 5.7% while they have risen 8.6% in the rest of the country, and the economies of the participating states have grown 31% faster than the rest of the country, according to the non-partisan Acadia Center. What happened? One part of the story is that the price of natural gas declined. But perhaps even more importantly, RGGI helped the Massachusetts energy sector become more efficient. Proceeds from the sale of RGGI credits fund programs such as the popular Mass Save that have provided consumers and businesses with billions of dollars in incentives to upgrade insulation, install new appliances, or make other cost-saving energy-efficiency changes. Programs like RGGI have contributed to Massachusetts being named the most energy-efficient state in the country for the 9th consecutive year. Lowering demand has helped drive down the cost that consumers pay for electricity.
Rather than work through centralized government control, “cap-and-invest” systems like RGGI and TCI use free-market principles to reduce pollution more efficiently than alternative approaches. And by increasing overall demand for carbon-reducing technology and innovation, cap-and-invest systems also drive economic growth. Ultimately, TCI is a program designed to put itself out of business as consumers gradually shift to electric vehicles.
That is why these programs are regularly supported by everyone from public-health advocates, to environmentalists, to conservative economists. In Massachusetts, TCI is supported by business groups such as the Massachusetts High Tech Council, the Associated Industries of Massachusetts, and the Massachusetts Taxpayers Foundation, and environmental groups such as the Environmental League of Massachusetts and the Sierra Club.
Sometimes, cap-and-invest programs are even preferred by the companies that are required to purchase the credits, because the approach lets industry players sort out how to reduce pollution, with government oversight but without government mandates. While we work to ensure that TCI boosts the economy, equally important is ensuring that the commonwealth’s most vulnerable populations share in the benefits this program will create — through investments in public transit, for example. TCI done right can improve air quality and transportation access for those who need it most.
In echoes from the RGGI debate, opponents of TCI, some funded by the oil industry, have claimed the initiative will raise gas prices. They were wrong about RGGI, and voters should be skeptical of their claims about TCI. By making our transportation system more efficient, what consumers pay for transportation can and will decline, just as electricity costs have under RGGI.
By advancing TCI in partnership with other governors, Charlie Baker is applying his bipartisan, innovative, results-driven governing approach to two of our most pressing challenges — fixing our transportation system and addressing tailpipe emissions that currently are the biggest source of pollution in Massachusetts.
Chris Dempsey is the director of Transportation for Massachusetts, a diverse coalition of more than 70 organizations with a stake in improving transportation in the state.