Mixed Concerns from Equity Groups at Latest TCI Workshop

The Transportation & Climate Initiative (TCI) is an initiative to reduce transportation emissions in the Northeast and Mid-Atlantic through a cap-and-invest program. Click here for an overview on TCI, or here to see our latest official comment letter to TCI leadership.

This past Wednesday, community groups and other stakeholders converged in Newark, New Jersey for the second official public workshop for the Transportation & Climate Initiative. This session’s focus was: “Advancing Equity & Creating Opportunities for All Communities.”

The event gave community groups the opportunity to have a concerted discussion about the environmental justice needs of the region and how they relate to TCI. Just like the April 30th workshop in Boston, opinions were mixed between tentative enthusiasm and outright opposition.

The big talking points of the day:

  • Community groups did not have a chance to urge states to look beyond carbon markets to solve their local environmental issues. TCI has been talked about for 10+ years, yet this is the program’s first equity-focused workshop. Community groups feel like they were not included in the process earlier, and they would have urged the states to create policy solutions that go beyond carbon markets.
  • TCI has the potential to direct investments from revenue towards the unique needs of communities, but only if the right investment process and requirements are established. For example, in California, 35% of total investment revenue is required to benefit disadvantaged and low-income communities.
  • There might be a need to slow down the process. Creating the most equitable TCI program will require considerable engagement across all involved states. There are many aspects to explore, and rushing a finalized policy by end of 2019 will inevitably leave voices out of the conversation.

These concerns are legitimate. Equity groups are looking at the experience of previous cap-and-trade programs, which tend to implement weak price signals and do little to reduce pollution in the most burdened communities. Yet there is still potential here to unlock billions of dollars to address the needs of our most disadvantaged. Let’s break this down.

Market Mechanisms and Local Environmental Challenges

At the most fundamental level, a cap-and-trade program is designed to reduce emissions to a specific level in the most cost-effective manner possible. The government limits pollution by auctioning fewer and fewer allowances every year, prompting the cost of polluting activities (such as driving a car) to go up. The market – meaning the countless choices made by consumers and businesses every day – reacts to these price changes by favoring cleaner ways of living.

This is an incredibly powerful tool to drive emissions down on a large scale, but it does not necessarily target localized emissions reductions. Under market-based mechanisms, emissions reductions occur wherever is most efficient, no matter the socioeconomic status, political context, or environmental burden of the area in question. Through the laser-narrow lense of addressing climate change, this approach needs no apology. Carbon dioxide is a “geographically diffuse” pollutant, as it has no local health impacts and appears to blend in with the larger atmosphere fairly quickly.

But take a step back and you see that climate change and our local environmental challenges are deeply and intrinsically connected. Pollution does not only come from carbon dioxide, but results from so-called co-pollutants, which are harmful to human health, such as SOx, NOx, PM 2.5 to name a few. These tend to come out of the same tailpipes and vents as carbon dioxide, and do so disproportionately in communities of color and low-income neighborhoods.

If we can limit CO₂ output from cars and pollutive facilities in disadvantaged communities, it follows that we will also reduce the harmful co-pollutants that are causing health concerns in already overburdened environmental justice communities.

What do we want out of TCI?

In order to resolve this tension, we need to reach consensus on what TCI is expected to achieve. The program has the potential to be anything in between a flagship climate program with serious impact and strong environmental justice benefits and a RGGI-style nominal program.We have the opportunity for it to act as the former, but are at risk of it developing as the latter.

In a vacuum, TCI could simply act as a revenue-raising mechanism. There are serious transportation, public health, equity, and housing issues in the region that revenue investment from TCI could help address. The billions of dollars of potential funds from a cap-and-trade program for transportation is far more revenue than any existing environmental justice program or proposal in the history of the Northeast/Mid-Atlantic.

However, all programs have “opportunity costs” in that they require attention and effort that could be directed towards other proposals. Many other carbon pricing and/or environmental justice initiatives in TCI states, some of which have been building support and maturing for 5+ years, could be delayed or killed as TCI takes up the political capital and public focus. The worst case scenario would be if TCI’s finalized program is not designed to significantly reduce emissions or address local environmental concerns, yet sucks the political wind out of proposals that do.

What can we get out of TCI?

Alternatively, TCI can be designed to make a real difference. The most promising consensus coming out of Wednesday’s workshop is that equity groups and the communities they represent have an extensive understanding of their needs. By listening to these groups and empowering them through a ground-up collaborative investment process, states can direct billions of dollars to realize the solutions that they are calling for. If local pollution reductions are what we need, then let’s invest the money to make it happen.

TCI will need to learn from and build upon previous experiences from other cap-and-trade programs. For example, California uses over 20 environmental and economic factors to map disadvantaged communities down to the census tract level. Their tool, called CalEnviroScreen, is the product of a multi-year stakeholder engagement period and is used to inform their cap-and-trade investments. Such a tool would go a long way in transparently identifying and quantifying benefits to EJ communities in the TCI region.

Furthermore, California requires 25% of investments to benefit these populations, and an additional 10% to benefit low-income communities and households. These benefit requirements have been increased overtime, and there is no reason that TCI states cannot go even higher. The key to ensuring TCI’s investments go to the right projects will be to build an allocation process that ensures equal access to resources, thorough community engagement, and transparency.

Furthermore, all stakeholders need to beat the drum that no matter how effective TCI ends up being, it will not be the silver bullet for climate change nor environmental justice issues in the region. Additional policies will be needed to address greenhouse gases from building heating and industrial facilities. Meanwhile, tailpipe pollutants are only one of many concerns to address in our most-burdened communities. But as long as a regional cap-and-trade program hogs the political stage, we have to push it to be more equitable and just while achieving significant emissions reductions.

Up next, the TCI states will hold a webinar on May 23rd to review the data inputs and assumptions to model out emissions in the TCI region.