TCI’s proposal is poised to become its own carbon reduction program with a focus exclusively on the transportation sector, alongside RGGI’s existing cap and trade program.

By Jean-Philippe Brisson, Joshua T. Bledsoe, David B. Amerikaner, and Benjamin W. Einhouse

The Regional Greenhouse Gas Initiative (RGGI) may soon have a transportation-focused companion to its functioning power plant-focused cap-and-trade program. Operating under the banner of the Transportation & Climate Initiative (TCI), most of the RGGI jurisdictions announced plans on December 18, 2018, to design a program to address carbon emissions from the combustion of transportation fuels. TCI plans to seek input from stakeholders and develop a policy during 2019, with the intention that each participating jurisdiction could adopt and implement the policy in 2020 and beyond.

The structure of the program is not yet clear. In its press release, TCI indicated that the program would cap and reduce transportation fuel emissions, with revenues from the system reinvested in carbon-reduction technologies and transportation infrastructure. However, key details of the program, including the level of the emissions cap, the mechanisms for auctioning and reinvesting auction proceeds, and the categories of entities covered by the program (i.e., the point of regulation), have not been determined.