The Transportation and Climate Initiative (TCI) was supposed to kill fossil fuels by raising gas prices. Instead, high gas prices killed the TCI. 

Cooked up by the Georgetown Climate Center and pitched as an innovative way to cut carbon emissions, TCI is an old-fashioned carbon-trading scheme. The intended signatories, 13 states from Maine to North Carolina, and the District of Columbia, were to agree to cap carbon emissions from transportation fuels, then sell carbon credits to fossil fuel suppliers. 

States would decide how to spend the billions of dollars TCI’s creators projected the carbon credits would raise. The initiative’s Memorandum of Understanding states that signatories would “seek to invest strategically in lower carbon transportation options and other investments to further the goals described in this MOU.” 

That commits states to no specific carbon-reduction investments. The money would go into state general funds, to be spent at will by politicians.

By design, the TCI would achieve its carbon reductions by making gas and diesel fuel more expensive. That would serve as an incentive for consumers to take mass transit, share rides, or buy electric vehicles. Any state investments in alternative transportation systems would be gravy. 

The TCI’s own model initially predicted that gas prices would rise by between 5-17 cents per gallon as a result of the scheme’s carbon caps. A Tufts University study last year estimated price increases between 3-38 cents per gallon absent a cap on such increases. The initiative anticipated capping price increases at 9 cents a gallon. 

But a funny thing happened on the way to the compact. Gas prices shot up on their own in response to surging demand and limited supplies. By October, gas prices had risen by more than a dollar during the year, hitting a seven-year high. 

With citizens already highly sensitive to gas price increases, governors who had initially backed the TCI’s plan to raise those prices further bailed.

Last Tuesday, Conn. Gov. Ned Lamont announced that high gas prices made it impossible for his state to join.

“Look, I couldn’t get that through when gas prices were at a historic low, so I think the legislature has been pretty clear that it’s going to be a pretty tough rock to push when gas prices are so high, so no,” he said. 

Mass. Gov. Charlie Baker pulled his state out on Thursday. Then Rhode Island Gov. Dan McKee followed on Friday, just a day after announcing his intention to remain in the pact. 

To sell the scheme, TCI backers had focused on the supposed carbon emission reductions the initiative would create. But as the Josiah Bartlett Center was the first organization to point out in December of 2019, the TCI’s own model showed that almost all of its projected carbon reductions would occur regardless of whether the initiative were adopted. The initiative itself was projected to cut emissions by between one and six percentage points, not the 25 percentage points boosters claimed. 

The small reductions the proposal might be able to achieve came at an enormous cost of tens of billions of dollars. And those costs would be borne by motorists. 

Consumers would pay higher fuel prices with no guarantee that those prices would result in meaningful investments in lower-emission alternatives. The only certainty in the whole plan was that fuel prices — and government spending — would go up. 

New Hampshire Gov. Chris Sununu was the first governor to recognize this, saying in a Dec. 17, 2019 statement that he would not commit New Hampshire to the TCI because the program “would institute a new gas tax by up to 17 cents per gallon while only achieving minimal results. This program is a financial boondoggle and the people of New Hampshire will never support it.”

Just shy of two years later, the rest of New England’s governors effectively ratified Sununu’s decision. Better late than never.