McClaughry: What you need to know about TCI

By John McClaughry

On Dec. 17 the Georgetown Law Center revealed its long-awaited Transportation and Climate Initiative (TCI) draft memorandum of understanding (MOU). It will be open for online comments until Feb. 28. At some point after that Gov. Scott will be asked to sign Vermont into TCI. Presumably, the Legislature would have to enact some provisions to make it enforceable on Vermont fuel dealers.

Here are 12 questions and answers that will explain what TCI is and expects to do.

Q: What is TCI? TCI is a multistate regional agreement to drive up the price of motor fuel (gasoline and on-road diesel). It proposes to start at 5, 9 or 17 cents per gallon, and escalate upward from that, with no declared maximum.

John McClaughry

John McClaughry is vice president of the Ethan Allen Institute.

Q: Why do the TCI backers want to drive up the price of motor fuel? Because they are convinced that “climate change poses a clear, present, and increasingly dangerous threat to the communities and economic security of each [participating state].” The MOU says that the participating states will “need to implement bold initiatives to mitigate the impacts of greenhouse gas emissions from the transportation sector,” which produce 40% of human-caused emissions.

Q: How will TCI drive down those emissions? By driving up the price of gasoline and diesel fuel so you will drive less, drive smaller cars, use electric vehicles, walk, ride bicycles, use public transportation, move closer to school and work, and so on.

Q: How does TCI drive up motor fuel prices? It creates what it calls a “cap and invest” system. TCI sets a cap, or limit, on carbon dioxide emissions from burning motor fuel. Every distributor of motor fuel — of which there are 80 in Vermont — will be required to purchase “allowances” to match the motor fuel sold in each reporting period.

Q: So motorists, including passenger cars, pickups, SUVs, vans, school buses, delivery trucks, contractor vehicles, milk tankers, ambulances, and motorcycles will end up paying for the allowances? Yes, of course they will.

Q: What does the state get for imposing these costs on motorists? TCI will distribute among the participating states some fraction of the revenue from its sale of “allowances,” according to an as yet undetermined formula. The states are supposed to use these revenues to further drive down gasoline and on-road diesel use, and “help their residents transition to affordable, low-carbon transportation options.” Paying people to buy electric cars, and building charging stations for them, is a recommended use of the funds. However, the states can use what they receive for anything their legislature desires.

Q: How many “allowances” will TCI issue? As many it sees fit. TCI will invent them out of thin air, and motor fuel distributors will be required to go into TCI’s auction market to buy enough of them with real money to match their motor fuel deliveries over a preceding reporting period. The cost of these “allowances” will be included in the price you pay at the pump.

Q: Won’t this plan hit hardest on working people and the poor, especially in Vermont’s rural areas? Of course. It’s regressive.

Q: How much will the preferred TCI scenario reduce carbon dioxide emissions from motor fuel? Drew Cline, of New Hampshire’s Josiah Bartlett Center, analyzed the TCI economic model. He found that the “reference case” used by the Georgetown Climate Center to project what would happen from 2022 to 2032 if states did not implement the TCI would likely be a 19% reduction in carbon dioxide emissions. If TCI is implemented, emissions are projected to fall by between 20% and 25% over that decade. So TCI will produce an additional emissions reduction of between 1 and 6 percentage points on top of a presumed reduction of 19 percent. In short, TCI would extract $56 billion from motor fuel users to reduce carbon dioxide emissions by a little more than 5 percent over 10 years.

Q: Will that reduction of emissions actually reduce “climate change”? Certainly not measurably. Probably not at all.

Q: Wait a minute. Isn’t this TCI “cap and invest” scheme just another carbon tax in a fancy package, designed to make it look like it’s not a carbon tax? Yes, of course.

Q: Gov. Phil Scott has steadfastly promised to veto a carbon tax. Won’t he reject the MOU, as New Hampshire Gov. Chris Sununu has already done, and veto any legislation to force Vermont fuel dealers to buy those funny money TCI allowances that will drive up the price of gasoline and diesel fuel for all Vermonters? As of now he won’t say, so if you don’t want to see the TCI drive up your fuel prices year after year, it wouldn’t hurt to encourage him to strengthen his resolve.

John McClaughry is vice president of the Ethan Allen Institute.

Images courtesy of Public domain and John McClaughry

7 thoughts on “McClaughry: What you need to know about TCI

  1. Is this TCI bunch going to tell us with an ANNUAL REPORT about just how much the temperature of the Atlantic Ocean dropped, due to our expensive pogrom??

    Annual Report anyone?

  2. Has any Liberal “Climate C02’er” being concerned about the millions of acres burning in AU? That’s a bunch of C02 and if the so concerned are concerned I haven’t heard anything of any degree. As sure as the volcano in the Philippines, Mount Pinatubo in 1991 that affected the atmosphere in the US (remember it well in NH). The AU wildfire smoke will drift here and affect VT. Is it Chicken Little time? Liberals won’t want that smoke here and heat up our area. Things will die.

  3. It’s like these carbon tax fools can’t see the failure of a Canadian
    carbon tax right under their nose that has cost the average family (that was suppose to get offset subsidy from it) on average 1000. dollars and more
    a year…knowing our political leftist fascist hacks it would be 2000.
    cost per family here, they can tax like nobodies business….. The only
    other scary thing besides I’m from the gov and I’m here to help you, would
    be It’ won’t cost you nothing as you get a subsidy from the proceeds….
    Ya right….

  4. One can not depend on gov.Scott for anything as he has proven his word is worthless as he is.

  5. Why TCI, because they are convinced that “climate change poses a clear, present, and
    increasingly dangerous threat to the communities and economic security ??

    Yea I have been hearing that same rhetoric since Al ” Lear-Jet ” Gore had his first claim,
    all this TCI – BS will do is fatten the wallets of those in charge and empty the wallets of
    Vermonter’s for an agenda ” feel good ” policy…… that’ll accomplish nothing except waste

    If these climates change promotors in Montpelier, are really concerned then they should
    be looking towards China, India, Russia to name a few places of ” real concerns ” or start
    closer try California, they spew more toxins in a week then Vermont does in ten tears.

    Wake up people, these legislators work for us, not some conglomeration !!

    • They sure don’t seem to work for us.

      Whatever happened to the tenant in Article 9 of the Vermont Constitution…that “…previous to any law being made to raise a tax, the purpose for which it is to be raised ought to appear evident to the Legislature to be of more service to community than the money would be if not collected.”

  6. TCI will distribute a fraction of the allowances revenues to states?

    After paying exorbitant salaries and expenses to the organization of wise people thinking up and administering this cumbersome TCI scheme, what happens to the fraction, after expenses, that is not distributed to states?

    This looks to me like another costly boondoggle about to go viral.

    The TCI scheme is wide open to fraud and abuse, as there will be minimal to no meaningful oversight.

    TCI will be a proxy CARBON TAX collector for states, at a fat fee!!

    Legislators in each state do not have to vote for much hated CARBON TAXES, which would be increasing each year, until we all croak.

    They are “off the hook”.

    Legislators of each state should be ashamed to allow a large amount of CARBON TAX money being appropriated by a “superstate” entity over which they have minimal or no control.

    $56 billion to be paid for allowances by New England drivers for 10 years to reduce CO2 by an additional 1% to 6%!

    TCI is legal? ….. it is robbery developed by politicians who need funding for more untested, unproven “programs”, raises and the hiding of misspent moneys they have already used.

    TCI is not serious about dealing with the issue of climate. There are 13,500 commercial jetliners on order as of this year – all of which burn copious qty of FF – and ‘aviation’s climate impact is a factor 6 to 47 higher than the impact from car travel’.

    Raising gas prices in tiny Vermont is not going to have ANY effect on global warming, but it provides lots of “feel good” to the people who can afford this destruction.
    As for the people who cannot afford these higher gas prices…….. well, they can take the bus.
    And no one seems to mention that raising the price of fuel will raise the price of everything else – your groceries come on a truck.

    And for all you people who voted for the current Dem/Prog legislature because you hate Trump, ponder that vote when you’re gassing up.

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