TCI – What Is It and Why Is It a Game Changer?

By now, we’ve all heard of RGGI, the Regional Greenhouse Gas Initiative that caps greenhouse gas (GHG) emissions from the power sector in the Northeast and reinvests proceeds into clean energy and efficiency programs. But have you heard of TCI? The Transportation Climate Initiative Regional Policy Design Process (TCI) aims to do for transportation emissions what RGGI has done for the power sector – and maybe more.

Since its inception in 2009, RGGI has raised $3.2 billion in auction proceeds to support climate-related policy efforts in the region and has set a global precedent for an emissions cap and invest framework. Now, the Northeast and Mid-Atlantic states are preparing to pioneer climate policy once again. Transportation emissions continue to be a pernicious problem, comprising nearly a third of U.S. emissions on average and even more in states like Massachusetts. The sector continues to lag in emissions reductions due to the infrastructure and market challenges that transportation emissions pose.

Last year, many of the RGGI states turned their attention to regulating climate emissions from transportation, with the goal that a framework for regulation would spur clean transportation investments and sector transformation. The participating jurisdictions are a subset of the Transportation and Climate Initiative (the broader group supporting the policy initiative also known as TCI). This organization, operating since 2010,  is a regional collaboration of 12 Northeast and Mid-Atlantic states and DC that seeks to improve transportation, develop the clean energy economy, and reduce carbon emissions from the transportation sector.

In December of 2018, nine of the 13 TCI jurisdictions signed a statement announcing their intent to design a regional approach to curbing greenhouse gas emissions from transportation. They  include Connecticut, Delaware, Maryland, Massachusetts, New Jersey, Pennsylvania, Rhode Island, Vermont, Virginia, and DC. Since then, the TCI regional policy process, facilitated by the Georgetown Climate Center, has hosted regional workshops and online seminars, solicited significant stakeholder feedback, and begun modeling to inform policy choices.

At the beginning of October, the TCI jurisdictions released a framework for a draft regional policy proposal, from which the group plans to develop a draft MOU by December 2019, with the goal of releasing a final MOU by spring 2020. Similar to RGGI, TCI is designed as a cap and invest program, with emissions allowances distributed to fuel suppliers through an auction mechanism. In the draft framework, each jurisdiction can independently decide how the proceeds from these auctions will be spent to further carbon reductions and other policy goals. Depending on the final MOU, TCI could reduce transportation emissions by up to 40% by 2030.

NECEC has submitted comments on the draft framework, praising the high-level document and encouraging jurisdictions to reserve funds for investment in private sector innovation. Arguably, one of the most important things TCI will do is create the policy environment to spur innovation and demand for low-carbon transportation solutions. The adoption of electric vehicles (EV)  has long-suffered from a chicken-and-egg challenge: charging infrastructure is required to alleviate the perception that EV ranges are limited while EV charging infrastructure is often not profitable due to the low demand in less-dense areas. TCI could address this problem by reinvesting auction funds into a broader charging network, reducing barriers to EV purchase. This is just one of the many ways the program could transform our transportation system in the coming years.

Transportation is at a turning point, and not just because of the significant amount of carbon emissions coming from the sector, but also because there is an opportunity for broad, systematic change. As Dan Sperling pointed out in his book Three Revolutions, new transportation innovations could reshape our lives into a cleaner, more efficient system or  into a more congested, more polluting one. TCI has the potential to not only reduce carbon emissions and put us on track to avoiding catastrophic climate change, but also to develop cleaner and healthier environments across the Northeast.