Emissions
centers healthier, after decades of being adversely impacted by the emissions being released by traffic every day.
“Connecticut has always taken pride in our leadership role when it comes to climate, and when we can combine that with a stronger economy, fast transit systems, and regional cooperation, that’s a win for all of us.”
The initiative is a regional cap-and-trade plan to raise money to combat climate change by seeking wholesale reductions in motor vehicle pollution, which is the largest source of greenhouse gas emissions. It requires that large gasoline and diesel fuel suppliers purchase allowances for the pollution caused by combustion of the fuels they sell in Connecticut.
“Because fuel distributors operate in a competitive marketplace with a growing diversity of alternative fuels such as hydrogen and electricity, the price signal will spur innovation, including for regulated entities to reduce the carbon content of the fuels that they sell,” said Katie Dykes, commissioner of the state Department of Energy and Environmental Protection.
The program is expected to generate up to $89 million in annual revenue for Connecticut in 2023, which would increase to as much as $117 million by 2032.
The total number of emission allowances will decline each year, resulting in less transportation pollution. The proceeds — nearly $300 million for signatory jurisdictions netted in the first year — would be invested in low-carbon transportation projects designed to help both urban and rural residents.
Each participating jurisdiction would decide how to invest program proceeds independently in consultation with lawmakers and citizens.
But it’s difficult, Dykes added, to say how much of the cost will passed along to fuel consumers.
“Should fuel suppliers pass along cost modeling estimates show a potential increase of around 5 cents per gallon,” Dykes said.
“This is far less than the regular fluctuations that consumers see in retail fuel prices.”
Environmental advocates across the region applauded the move. Barry Kresch, president of the Electric Vehicle Club of Connecticut, said TCI is “a real opportunity to substantially reduce the emissions of greenhouse gases and other pollutants, improve the health of Connecticut residents, and generate investment in clean energy and clean transportation.”
But critics suggest the initiative amounts to little more than a new gas tax for Connecticut residents. Under Connecticut’s current system, drivers already pay a flat tax rate of 25 cents per gallon at the pump, along with a gross receipts tax that fluctuates along with the wholesale price of gasoline.
The Yankee Institute for Public Policy, a right-leaning think tank, estimates it would result in $388.6 million per year in increased gasoline costs across the state.
“This new tax is regressive, opaque, and offensive to hardworking Connecticut residents and small business owners who deserve better from a state government that is supposed to care about them and represent their interests — not the interests of an activist group bent on making it too expensive for the average family to drive to work,” said Yankee Institute President Carol Platt Liebau.
The Delaware-based Ceasar Rodney Institute’s Center for Energy and Environment estimated the average Connecticut family will end up paying $258 more per year.
House Minority Leader-elect Vincent Candelora said any new taxes in the state of Connecticut would be “wildly unpopular for taxpayers, especially given the state that we’re in.”
“I think it’s something that we need to we need to tread very lightly toward. There’s going to be a lot of spirited conversation on this issue,” Candelora said.
Candelora, a Republican from North Branford, said the issue would have to come before the legislature before Connecticut officially signs on.
“Given that our special transportation fund is heading toward insolvency, starting another initiative that is not going to help the solvency of our fund is probably not the way that we should be starting out a conversation on transportation and greenhouse gas,” Candelora said.
Senate Minority Leader-elect Kevin Kelly called the pre-Christmas move a “lump of coal to middleclass families.”
“This tax hike will burden middle class families’ budgets at the absolute worst possible time without improving our aging transportation infrastructure,” Kelly, R-Stratford, said. “[Lamont’s] holiday gift to Connecticut families is new and higher taxes.”
The National Federation of Independent Business, which represents thousands of small businesses in the state, said many who are struggling to make ends meet due to the coronavirus pandemic will face additional financial stress if gas were to go up in price.
“Restaurants require fuel to deliver food orders, plumbers and electricians drive to job sites, construction companies utilize fuel to operate their equipment,” said NFIB State Director Andy Markowski.
“All of these small business jobs will now be more expensive because Connecticut joined TCI,” he said.
Chris Herb, president of the Connecticut Energy Marketers Association, an industry group, said TCI would “put another tax, on top of another tax, on top of another tax, on top of another tax” on gasoline, which he said is “one of the already most taxed commodities in Connecticut.”
“We don’t see this as an environmental initiative but rather a money grab,” Herb said.
“We already have one of the highest gas taxes in Connecticut. This would be the breaking point for many people in Connecticut already struggling to make ends meet and quite frankly, just trying to survive.”
St a t e s t hat were initially on board with the program — but failed to commit this week to the agreement — include Delaware, Maryland, New Jersey, New York, North Carolina, Pennsylvania, Vermont and Virginia.