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The Transportation and Climate Initiative (TCI): Everything You Need to Know, Part III: The Plan for Massachusetts

In Parts I and II of our series delving into the details of the Transportation Climate Initiative, we provided an overview and described the structure of the TCI. In Part III, we will discuss how the plan might look in one TCI jurisdiction, Massachusetts, and how the Commonwealth will prioritize investment of the proceeds from the initiative.

Massachusetts Governor Charlie Baker and his administration have enthusiastically supported the TCI since the initiative was in its earliest stages. In December 2018, when Massachusetts first announced that it would be joining the initiative, Governor Baker noted the importance of reducing transportation emissions as the transportation sector is the largest contributor to carbon emissions in the Commonwealth. Lieutenant Governor Karyn Polito also voiced her support for the initiative, emphasizing the joint goals of the initiative to reduce emissions and ensure equity across demographic groups. Since joining the initiative, Massachusetts has become a leader in advocating for its implementation and for collaboration amongst TCI jurisdictions.

If implemented, according to estimates based on economic modeling conducted by TCI, the initiative would result in anywhere between a 5 to 17 cent-per-gallon increase in the price of gas across the region, creating a source of revenue for TCI member states to re-invest in sustainable transportation infrastructure and policy initiatives. Massachusetts would receive a portion of that revenue on an annual basis, the amount of which would vary but has been roughly estimated at around $500 million per year. Governor Baker has pledged to use all of the funds on new transportation projects starting as soon as 2022. Long-term, the governor has stated that his goal is for the Commonwealth to reach net-zero in greenhouse gas emissions by the year 2050, making Massachusetts only one of four states to set such an ambitious target.

The Baker administration’s plan would allocate half of the revenue to public transit, including projects like electrifying buses and commuter trains, expanding MBTA service to increase ridership, and creating improved biking and pedestrian infrastructure. Governor Baker recently articulated this goal to the legislature in the filing of his $18 billion transportation bond bill, which includes major investments in the MBTA and would specifically earmark half of the money raised through fees from the TCI to the Commonwealth’s public transportation system.

The remainder of the funds would be allocated towards initiatives that would benefit communities that are currently underserved by transportation options and that have been disproportionately burdened by pollution, issues of equity that the Baker administration is focused on remedying through this initiative. According to Massachusetts Energy Secretary Kathleen Theoharides, these initiatives would include things like providing rebates for electric vehicle users and improving broadband access in rural areas to make telecommuting a more accessible option for certain commuters in the Western part of the state.

Reiterating his support for the initiative at a keynote speech at the Transportation and Climate Initiative Business Summit in December, Baker stated, “This gives us the ability to create a framework where the resources that are raised as a result of this initiative go into things that are believed to be tools that can be used to continue to reduce emissions… I believe this will be one of the most important regional initiatives in reducing carbon emissions anywhere in the U.S.” While TCI officials continue to solicit public feedback on the regional draft framework and conduct additional modeling in advance of releasing a final memorandum this spring, it is clear that Massachusetts has taken a firm stance regarding its support of the TCI and is committed to its implementation in the state through concrete policy proposals and legislative initiatives.

In the fourth and final part of this series, we will discuss potential challenges to regional implementation of the TCI and explore the opposition that some jurisdictions have already begun to face.

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Sahir Surmeli

Member / Co-chair, Energy & Sustainability Practice

Sahir Surmeli is a Mintz business counselor who advises companies, boards, entrepreneurs, investment banks, and venture and private equity investors as they build and grow companies. He handles public offerings, 144A and private financings, acquisitions, joint ventures, and strategic partnerships.

Thomas R. Burton, III

Member / Chair, Energy & Sustainability Practice

Tom Burton has helped to shape the clean energy industry by drawing on his passion for innovation. As a Mintz attorney, Tom counsels investors, entrepreneurs, and Fortune 100 companies. He also guides start-up organizations and accelerators to foster the next generation of energy leaders.