The state’s transportation system is literally riddled with challenges: potholed roads, inadequate public transit service, soul-crushing traffic congestion and tailpipe pollution that both causes asthma and heart disease and is the state’s largest source of greenhouse gas emissions.
To address these problems, Gov. Charlie Baker has been working with a bipartisan group of governors from nearby states to advance a regional, market based program known as the Transportation & Climate Initiative.
The initiative is based on a similar initiative that 11 states, including Massachusetts, put in place in 2009 called the Regional Greenhouse Gas Initiative. Most people have never heard of the Regional Greenhouse Gas Initiative, but it is one of the most consequential environmental policies the state has adopted in decades.
It works by requiring power plants to purchase emissions credits for the pollution they create. The number of credits available for sale across the participating states is capped to ensure total pollution is limited and declines over time.
Coal plants and other heavy polluters have to buy a lot of credits. Natural gas plants have to buy a moderate amount. Clean energy plants powered by solar and wind don’t have to buy any at all.
The program works. Emissions from power plants in the region have fallen 90% faster than the rest of the country.
When the greenhouse gas initiative was being developed, opponents said it would raise electricity costs and hurt the economy.
As it turns out, they were wrong on both counts.
Since it was put in place, electricity prices in participating states have declined 5.7%, while they have risen 8.6% in the rest of the country.
The economies of the participating states have grown 31% faster than the rest of the country, according to the non-partisan Acadia Center.
What happened? One part of the story is that the price of natural gas declined. Perhaps more importantly, the greenhouse gas initiative helped the Massachusetts energy sector become more efficient.
Proceeds from the sale of credits fund programs such as the popular Mass Save that have provided consumers and businesses with billions of dollars in incentives to upgrade insulation, install new appliances or make other cost-saving energy-efficiency changes.
Programs like the greenhouse gas initiative have contributed to Massachusetts being named the most energy efficient state in the country for the ninth consecutive year.
Lowering demand has helped drive down the cost that consumers pay for electricity.
Rather than work through centralized government control, “cap and invest” systems like the greenhouse gas and transportation and climate initiatives use free market principles to reduce pollution more efficiently than alternative approaches.
And by increasing overall demand for carbon reducing technology and innovation, cap-and-invest systems also drive economic growth.
Ultimately, the Transportation & Climate Initiative is a program designed to put itself out of business as consumers gradually shift to electric vehicles.
That is why these programs are regularly supported by everyone from public health advocates to environmentalists to conservative economists.
In Massachusetts, the Transportation & Climate Initiative is supported by business groups such as the Massachusetts High Tech Council, Associated Industries of Massachusetts, the Massachusetts Taxpayers Foundation and environmental groups such as the Environmental League of Massachusetts and the Sierra Club.
Sometimes cap-and-invest programs are even preferred by the companies that are required to purchase the credits, because the approach lets industry players sort out how to reduce pollution, with government oversight but without government mandates.
While we work to ensure the Transportation & Climate Initiative boosts the economy, equally important is ensuring that the commonwealth’s most vulnerable populations share in the benefits this program will create — through investments in public transit, for example. Done right, it can improve air quality and transportation access for those who need it most.
In echoes from the debate on the greenhouse gas initiative, opponents of the Transportation & Climate Initiative, some funded by the oil industry, have claimed it will raise gas prices. They were wrong about the greenhouse gas initiative, and voters should be skeptical of their claims about this program.
By making our transportation system more efficient, what consumers pay for transportation can and will decline, just as electricity costs have under the greenhouse gas initiative.
By advancing the Transportation & Climate Initiative in partnership with other governors, Baker is applying his bipartisan, innovative, results-driven governing approach to two of our most pressing challenges – fixing our transportation system and addressing tailpipe emissions that currently are the biggest source of pollution in Massachusetts.
Chris Dempsey is director of Transportation for Massachusetts, a diverse coalition of more than 70 organizations with a stake in improving transportation in the state.