Sussex GOP

Open Letter on the Transportation and Climate
Initiative

We, the undersigned, represent citizens and businesses in states currently considering
participation in an interstate compact known as the Transportation and Climate Initiative (TCI).
This is essentially a carbon tax on gasoline and diesel fuel that aims to drive up costs in order to
force people to drive less, therefore reducing carbon dioxide emissions. The tax will start small,
but is designed to increase each year.
Of the initial 13 New England and Mid Atlantic jurisdictions that considered joining TCI, fewer
than a third ultimately signed on. These participants have been asked to sign a recently
released memorandum of understanding (MOU) that includes a starting budget of emission
allowances that fuel distributors must buy in order to be permitted to deliver fuel to your local
gas station. Eight other states agreed to continue discussions about possible participation in the
TCI in the future.
All states should be concerned about the specifics of the new MOU, which replaced a draft that
had been under discussion for the past year. Significant discrepancies exist between the
ambitious figures put forth in the current memo and the realities it will produce.
For example, the original MOU projected that it would require a 17 cent per gallon increase in
order to achieve a 25% reduction in emissions by 2032. Most independent observers found this
to be overly generous and one study conducted by Tufts University even found that a 25%
reduction would require an increase of 38 cents per gallon to achieve the goal! Yet, the
December MOU claims that a 26% reduction can now be achieved with a per gallon cost
increase of between just 5 and 9 cents. Given the discrepancies between the independent
studies, the initial MOU projections, and the current figures being put forward, states currently
considering membership in the TCI compact should be extremely skeptical of numbers that
seem designed to alleviate political concerns rather than educate them as to the realities of the
program.
Although we are grateful that the overwhelming majority of states chose not to participate in
TCI at this time, it is unfortunate that the door has been left open at all. The past year’s debate
over the program and real world events have demonstrated that TCI is the wrong idea at the
wrong time.
Even with a vaccine for COVID-19, our national and regional economies will take years to fully
recover. Adding the painful and unnecessary financial burden of a motor fuel carbon tax –
billions of dollars annually— onto the backs of our households and businesses will only hamper
any recovery and prolong the pain and suffering.
TCI will necessarily hurt poor and rural residents much more significantly than their higher
income and urban peers. People drive out of necessity. Higher fuel costs will have to come out
of other areas of household budgets leading to hard choices for people already struggling to
make ends meet. It will also mean that fuel reliant small businesses that transport goods or
provide services will have higher operating costs. Those increased expenses will ultimately be
passed along to consumers through higher priced products and services. Economically speaking,
this is bad policy. Morally speaking, it’s just cruel.
Whether legally required to or not, authorization to join TCI should be coming from elected
legislatures or the people through direct democracy. It sets bad precedent for the executive
branch of state government to circumvent the will of the people. Please understand that, at its
core, TCI is a poor concept that is fundamentally regressive, economically damaging, and places
an unnecessary financial burden on people who can least afford it. Please reject it.

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