Lamont Pitches Cap On Transportation Carbon Emissions

CONNECTICUT — Gov. Ned Lamont is taking his regional governing approach to the transportation sector by signing an initial agreement with Massachusetts, Rhode Island and the District of Columbia to help reduce carbon emissions from the transportation sector.

At the heart of the program is a cap on carbon dioxide pollution from gas and diesel road fuels — fuel sellers would purchase allowances in participating states and the amount of available allowances will gradually be reduced. The cap will continue to decline as the program advances in the future, with at least a 26 percent reduction in carbon emissions from 2022 to 2032.

The program is expected to generate up to $89 million in 2023 and $117 million in 2032 for Connecticut. The money can be used by the state to modernize and decarbonize the transportation sector — at least 35 percent of the revenue must go to assist communities overburdened by transportation pollution.

The Connecticut legislature would have to approve joining the coalition.

The cap on carbon dioxide emissions isn’t a tax, said State Department of Energy and Environmental Protection Commissioner Katie Dykes said.

The program will, “...set for the first time a limit on carbon pollution from our transportation sector in line with the state mandates,” she said at a news conference. “...unlike a gas tax it guarantees that we will see emission reductions occur, and it guarantees that we will have investments that flow from this program…”

Dykes also said the program would lead to a healthier Connecticut through less asthma and other diseases, which would help save money as well down the road.

Lamont said it wasn’t necessarily true that wholesalers would push the cap costs onto drivers at the pump.

“I need the naysayers to give the other solution for our transportation fund,” Lamont said. “This is my second effort. This one has a double win because it’s on a regional basis, it really hits the environment head-on in a positive way.”

The Connecticut Post reports that the new fee would likely add at least a nickel per gallon for consumers if wholesalers opt to pass the cost onto them.

Republican Senate Leader-elect Kevin Kelly said the agreement could add 17 cents per gallon to the cost of fuel.

“This tax hike will burden middle class families' budgets at the absolute worst possible time without improving our aging transportation infrastructure,” he said in a statement. “His holiday gift to Connecticut families is new and higher taxes.”

Connecticut currently has two motor fuel taxes. There is a 25 cents per gallon excise tax on gasoline, which hasn’t changed since 2000 — the rate for diesel fuel was 41.7 cents per gallon in fiscal year 2018, according to the state Office of Legislative Research. The other is an 8.1 percent wholesale gas tax charged to petroleum product distributors in Connecticut. The total tax on gasoline in Connecticut was around 39 cents per gallon in 2018, according to the American Petroleum Institute.

The transportation sector contributes 38 percent of greenhouse gas emissions for the states that have signed on to the initiative. It is also the largest source of greenhouse gas emissions in Connecticut.

Connecticut’s electric grid is about two-thirds carbon free and is already on track to be carbon-free by 2040, Lamont said.

The program was partially modeled after the Regional Greenhouse Gas Initiative, which is another regional cap program that applies to carbon dioxide emissions from power plants.