Senate Bill 884, An Act Reducing Transportation-Related Carbon Emissions

Governor Lamont proposes partnering with neighboring states to implement a regional program that caps CO2 emissions from gasoline and on-road diesel fuel, requires wholesale fuel suppliers to purchase “allowances” at auction to cover the emissions from those fuels, and reinvests the proceeds of those auctions into transportation projects and programs that will reduce greenhouse gas emissions. At least 35% of the proceeds will be used for communities that are most negatively impacted by air pollution and underserved by the transportation system.

Information about Senate Bill 884.

The Problem

Transportation is the largest source of greenhouse gas emissions in Connecticut and a substantial contributor to harmful air pollution. Climate change poses a serious threat to the state’s economy, infrastructure, agriculture, natural resources, and public health. Poor air quality exacerbates acute and chronic respiratory problems such as asthma, Chronic Obstructive Pulmonary Disease, and other lung diseases. Immediate action is needed to address these issues. 

Governor Lamont’s Solution

Governor Lamont proposes working with other states to implement the regional Transportation and Climate Initiative Program (TCI-P). The goal of the program is to reduce greenhouse gas emissions from motor vehicles, which make up approximately 38% of all greenhouse gas emissions in Connecticut. TCI-P will cap carbon dioxide (CO2) emissions from gasoline and on-road diesel fuel and require wholesale fuel suppliers to purchase “allowances” at auction to cover the emissions from those fuels. The proceeds of the auctions will be reinvested into transportation projects and programs that reduce greenhouse gas emissions and air pollution. At least 35% of the proceeds will directly benefit communities that are overburdened by air pollution and underserved by the transportation system, and the state will establish an Equity Advisory Board to advise DEEP and DOT on how to best invest the proceeds to facilitate equitable outcomes within those communities.

The cap-and-invest program will guarantee a 26% reduction in CO2 emissions from on-road transportation from 2022 to 2032, and is projected to raise over $1 billion in auction proceeds by 2032. The program is projected to increase gasoline prices approximately 5 cents per gallon in 2023, increasing to 10 cents per gallon in 2032. The budget dedicates $24.4 million of FY23 TCI-P auction proceeds to preserving current transit programs and reserves the rest for other projects and programs that will reduce emissions and benefit communities overburdened by air pollution and underserved by the transportation system. In the out years, more than $30 million per year is reserved for such projects and programs. Annual revenues are expected to exceed $100 million by FY 2032.

Massachusetts, Rhode Island, and the District of Columbia have also signed on to TCI-P. Delaware, Maryland, New Jersey, New York, North Carolina, Pennsylvania, Vermont, and Virginia participated actively in developing TCI-P and have the opportunity to join the program in the future.