Pump Prices Could Rise Under TCI Plan

East Coast drivers could pay up to 17 cents more per gallon due to climate-change initiative.

December 23, 2019

BOSTON—Gasoline prices from Virginia to Maine could jump as much as 17 cents per gallon under a draft agreement to lower carbon emissions from vehicles, the Boston Globe reports. Nearly a dozen East Coast states are working on the Transportation & Climate Initiative (TCI), a carbon tax “cap and trade” proposal which seeks to reduce tailpipe gas emissions by 20% to 25% over 10 years.

According to Massachusetts Energy and Environmental Affairs Secretary Katie Theoharides, the initiative’s “fundamental purpose … is to address the climate crisis that is already having increasingly large and damaging effects on every one of our communities,” she said.

Officials estimated that, depending on how vigorous each state is in hitting that target, motorists could pay between five and 17 cents more per gallon of fuel in Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Vermont and Virginia.

The plan requires wholesale suppliers to purchase pollution allowances via auctions, with the states receiving the proceeds. Suppliers would be able to buy and sell those credits and also pass along any of the cost to consumers.

Some governors have expressed concerns about TCI, but many states see it as a way to fund transportation projects. Jon Shaer, executive director of the New England Convenience Store & Energy Marketers Association, said his group hasn’t decided whether to support TCI or not. “We understand the importance of good climate stewardship, but it must be balanced with the costs our citizens, businesses, and visitors can reasonably bear,” he said.

The Institute for Energy Research (IER) opposes TCI, equating it to a “sin tax” that would disproportionately affect lower income and rural residents. In a coalition letter released last week, IER said that “TCI is intended to make purchasing transportation fuels so painfully expensive that the astronomically high price discourages people from buying it. In short, consumers will have to pay more at the pump to fund increased government spending. Make no mistake, this is a tax. More precisely, it is a carbon dioxide tax being implemented through a gas tax.”