New Hampshire and other Northeast states are considering a carbon pricing system to curb emissions from passenger vehicles.
The transportation sector is New England's top source of the greenhouse gases that exacerbate the effects of climate change.
In New Hampshire, transportation – especially passenger vehicles – contributes more than 40 percent of emissions, while electricity generation contributes around 20 percent.
To address that, the New England states and their East Coast neighbors as far south as Virginia have been working for years on what they call the Transportation and Climate Initiative, or TCI.
Rebecca Ohler leads the climate and energy program at the New Hampshire Department of Environmental Services. She says TCI would be a “cap and invest” program, similar to the Regional Greenhouse Gas Initiative, or RGGI.
That cap-and-trade program, now in its tenth year, limits and prices carbon emissions from the power sector. It’s had a proven economic benefit, and Ohler credits it with helping to lower New Hampshire’s electric sector footprint.
She says New Hampshire hasn't committed to implementing the forthcoming transportation emissions program yet – but they've wanted to be part of the planning process.
"Our travel patterns are so interconnected up here,” Ohler says. “If it weren't a bunch of states together, it wouldn't matter much."
She says the idea is to set and then incrementally lower a limit on emissions from transportation fuels. Fuel companies – likely importers and wholesalers – would have to buy the right to distribute any gas and diesel in excess of that limit in participating states.
"It will probably be passed on through the price of fuels,” Ohler says. “That's where there's a lot of modeling that is yet to be done, that needs to really try to evaluate what would be the impact and how can we mitigate that direct cost to consumers. "
States could choose how to invest revenue from the program in commuter rail projects, electric vehicle infrastructure, bike and pedestrian initiatives, idling reduction equipment or even road maintenance, among other emissions-reducing tactics.
In states like New Hampshire, RGGI generates rebates for consumers affected. Ohler says that’s possible for TCI, but might be more complicated. She says regulators hope to find ways to offset extra costs to consumers by investing TCI money in helping them reduce their fuel costs.
Regulators are still working on economic and environmental models to gauge the impact of different versions of the plan. Ohler says some decisions about specifics of the program would be left up to each participating state – but a lot of the overall details still need to be worked out.
To that end, the TCI states are taking public comment until November 5 on a draft framework for developing the project, released this week.
After that, Ohler says they’ll develop specific plans that states would decide if and how to adopt. In New Hampshire, as with the RGGI program, that decision would fall to the state legislature.
Ohler says they hope to make those decisions and get the program running by 2022.