One pro-TCI group has accused another pro-TCI group of anti-regulatory activities. They both miss the mark.

The Tufts University Center for State Policy Analysis, a Massachusetts research center, released a new study shortly before Thanksgiving analyzing the plausibility of the Transportation Climate Initiative (TCI), the multi-state compact which would bind Vermont into jointly reducing its carbon emissions.  According to the Daily Kos (one of the most unapologetically left leaning groups out there), “the report from the Tufts University Center for State Policy Analysis found the (TCI) program would cost drivers twice as much as previously estimated. But what it didn’t tell readers was that the fancy-sounding Tufts University Center for State Policy Analysis is… yet another new Koch-funded anti-regulatory propaganda production facility!”

To what is Kos referring to? In the report, the Center states “our estimates of allowance prices, gas prices, and revenues from TCI tend to be higher than those in the modeling shared by the TCI initiative. … the official modelers have a very different baseline. They expect emissions from motor fuels to fall 19% between 2022 and 2032, which is above our estimates of 14.2% (moderate-growth scenario) and 17.5% (low-growth scenario).”

Is the Center for State Policy Analysis truly a “anti-regulatory propaganda production facility”? Aside from this one paragraph, the rest of the 16-page report is filled with glowing endorsements of the TCI. Consider the following:

1. “At the heart of TCI is a “cap-and-trade” system… a well-tested approach to carbon reduction that has proved effective around the world as well as here in the Northeast, where the Regional Greenhouse Gas Initiative (RGGI) has used a cap-and trade approach to curb power plant emissions.”
2. “Selling carbon allowances via auction will generate significant revenue for the states, amounting to billions of dollars each year across the region…”
3. “The TCI program doesn’t dictate exactly how such revenues will be spent; those decisions would fall to state legislators and governors… the right mix of investments could amplify the program’s impact, producing greater emissions reductions with smaller gas price increases.”
4. “In other situations, businesses forced to pay a price for carbon might try to spare their customers by squeezing suppliers. But fuel providers generally lack this option, as they purchase their fuel in a global market that gives them little negotiating power over refineries or the spot price of oil. And far from being an unfortunate side-effect, this pass-through to consumers is part of why TCI is expected to reduce emissions.”
5. “To achieve more equitable outcomes, a recent TCI proposal asks states to commit at least 35 percent of their revenue to underserved and overburdened communities, with input from state-level advisory bodies and regular reporting on results.”
6. “In the short term, higher gasoline prices will encourage people to seek ride-sharing options, consider public transit, and rethink the expense of shipping goods by truck. Then, over time, people can shift their long-term plans by purchasing fewer cars or choosing vehicles with higher fuel efficiency. Note that because of these behavioral changes, rising gasoline prices don’t directly translate into increased costs for drivers. Many will drive less and therefore buy less gasoline. Others will be incentivized to purchase electric vehicles, which have lower fuel and maintenance costs.”
7. “More diverse urban areas currently have the worst pollution, and therefore stand to gain the most from reduced tailpipe emissions.”

One cannot read these 7 excerpts and say with a straight face that the Center is an “anti-regulatory propaganda production facility.” The Center’s model does indeed estimate that, without government action, the emissions of East Coast states will fall 14-17% rather than 19% in the next 10 years from the TCI stakeholders. Thus, the Center believes higher levels of ‘tax punishment on fossil fuel consumers’ is necessary to lower emissions to some supposedly scientific level than the TCI stakeholders. But both groups laud tax punishment as entirely plausible and moral. I beg to differ.

This all depends on being able to estimate the growth in economic output of 80 million people in the 12 states considering TCI over a 10 year span. And then attaching some “level of emissions” to that number. The truth is, no one knows how high gas prices under TCI would go by 2032. These decisions would be partly informed by the structure of the TCI currently under debate, and partly by bureaucrats who seek to expand the scope of their oversight. Better savor those moments of $2.00 gas while they last.

David Flemming is a policy analyst at the Ethan Allen Institute.