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Nine states and DC agree to create cap-and-trade program for transportation

Nine Northeastern states and Washington, D.C., announced Tuesday that they will attempt to create a regional cap-and-trade program to limit emissions from transportation, the nation’s largest source of carbon pollution.

The partners agreed to create a system within a year that caps the region’s transportation emissions and sets up a market of pollution permits so entities can trade in auctions for the right to emit carbon.

The agreement contains little detail, such as which types of entities would be regulated and have to trade in pollution permits.

The revenue from putting a price on transportation fuels would go to investments in “low-carbon and more resilient transportation infrastructure” such as mass transit, electric buses, and electric vehicle charging stations.

The states participating in the initiative with D.C. are Connecticut, Delaware, Maryland, Massachusetts, New Jersey, Pennsylvania, Rhode Island, Vermont, and Virginia.

“Emissions from transportation account for the largest portion of the region’s carbon pollution and ambitious reductions are needed within the next decade to avoid dangerous impacts to public health, infrastructure, and the environment,” the states said in a statement. “Advancing low-carbon transportation solutions presents an opportunity for our region to improve the way people and goods move from place to place while addressing the threats posed by carbon and other pollution.”

About 28 percent of the nation’s greenhouse gas emissions come from transportation, recently passing the power sector as the most polluting. Reducing emissions from transportation is considered more difficult because it would require consumers to shift away from gasoline-powered vehicles to electric ones.

The Trump administration has also proposed relaxing stringent fuel efficiency standards for vehicles set by the Obama administration, which, if finalized, is expected to further discourage cleaner vehicles.

In the power sector, emissions have decreased significantly in the U.S. because cleaner energy sources such as natural gas and renewables have replaced coal due to falling costs.

“We don't have the same degree of cost-effective alternatives for transportation as we do in the power sector,” Noah Kaufman, an economist at Columbia University's Center on Global Energy Policy who studies carbon pricing, told the Washington Examiner. “It’s not as simple as switching from coal to natural gas and renewables. We still need the cost of alternatives to fall to compete with internal combustion vehicles. It’s about changing consumer behavior, which is more difficult.”

The new transportation partnership is modeled after a similar cap-and-trade program established by Northeastern states in 2009 targeting carbon emissions in the power sector.

That pact, called the Regional Greenhouse Gas Initiative, includes six of the nine states that signed the transportation agreement: Connecticut, Delaware, Maryland, Massachusetts, Rhode Island, and Vermont.

Under that plan, regional emissions are to be capped at about 78.2 million tons of carbon dioxide per year in 2020 and reduced to roughly 55.7 million tons in 2030. That 2030 goal represents a 65 percent drop from 2009 levels.

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