Charlie Baker Signs Carbon-Fee-on-Fuel Memorandum of Understanding With Rhode Island and Connecticut

Printed from:

Gasoline and diesel could soon be more expensive in Massachusetts.

On Monday, Massachusetts Republican governor Charlie Baker, Rhode Island Democratic governor Gina Raimondo, Connecticut Democratic governor Ned Lamont, and Washington D.C. Democratic mayor Muriel Bowser signed the Transportation and Climate Initiative memorandum of understanding. Several other states reportedly may join as well.

The proposed pact would implement fees on fuel providers based on their carbon emissions. That revenue would then go towards funding public transportation. The idea is that higher fuel prices reduces carbon emissions, as does increased access to public transportation.

Initial estimates said the proposal could tack 17 cents onto the price of each gallon of gasoline and diesel consumers purchased. However, a recent report from the Beacon Hill Institute and the Fiscal Alliance Foundation projected that it would add 18 cents per gallon to the price of gasoline and 35 cents per gallon for on-the-road diesel.

These increases would officially go into effect in 2023, but could start in 2022.

The governor said the agreement will help address climate change.

“As a commonwealth, we have an obligation to address climate change head on and a challenge this great requires action across our region and nation,” Baker said in a statement. “That’s why I am proud to join Governor Lamont, Governor Raimondo, and Mayor Bowser to launch this trailblazing program to reduce greenhouse gas emissions while building the clean, resilient transportation system of the future. 

“By partnering with our neighbor states with which we share tightly connected economies and transportation systems, we can make a more significant impact on climate change while creating jobs and growing the economy as a result,” he added. “Several other Transportation and Climate Initiative states are also committing to this effort today and we look forward to these partners moving ahead with us as we build out this first in the nation program.”

Baker made the announcement despite last month expressing some reservations about the timing of implementing a carbon fee on fuel, since traffic congestion is down because of the coronavirus emergency.

“TCI was based on a certain set of assumptions about volume, right? And congestion. And it may be that at some point – you know, I don’t know when that would be, down the road – we’ll be back to where we were with respect to that. But I think at this point in time it’s important to sort of reexamine a lot of assumptions that went into what the impact would be in terms of carbon reduction, based on the changing nature of transportation generally,” Baker said November 23. “And I think that is an important element, not just for us but for the other states that are participating in this conversation. If you pursue a price on carbon associated with transportation, what do you get for that price on carbon, in a world that looks a lot different now — and potentially will stay a lot different for the next several years — relative to the one we thought we were living in a year ago?”

Baker’s decision to sign a carbon-fee deal on Monday, December 21 received immediate criticism from both the Massachusetts Fiscal Alliance and the National Federation of Independent Business.

Christopher Carlozzi, Massachusetts director of the National Federation of Independent Businesses, said the carbon fee on fuel amounts to yet another expense for businesses and workers who already have plenty of them.

“The same small businesses that have faced shutdowns, countless restrictions, new regulations, and capacity limits will now face higher fuel costs due to Massachusetts joining the TCI,” Carlozzi said in a written statement. “Restaurants require fuel to deliver food orders, plumbers and electricians must drive to job sites, construction companies utilize fuels to operate their equipment, and now TCI will make it more expensive to run these types of small businesses.

“Higher fuel costs as a result of TCI will not just impact struggling small businesses attempting to grow jobs and rebuild the shattered Massachusetts economy, it will hurt the wallets of workers who must commute to their jobs in vehicles every day,” he added. 

Meanwhile, Paul Craney, spokesman of the Massachusetts Fiscal Alliance, said that the move could hurt Baker and Republican lieutenant governor Karyn Polito politically. If they seek re-election, both will be running again in 2022.

“With Gov. Charlie Baker and Lt. Gov. Karyn Polito supporting TCI and entering Massachusetts into the scheme, I don’t see a path for either of them being able to win an election in 2022,” Craney said. “People are hurting right now and the administration’s obstinance on this issue is insensitive to their plight and tone-deaf to their ongoing struggles. TCI is bad policy and even worse politics.”

Craney noted that politicians like New Hampshire Republican governor Chris Sununu and Vermont Republican governor Phil Scott had no problem winning re-election this year and that Republicans took back the New Hampshire House of Representatives opposing the Transportation and Climate Initiative while both states went to Democrats in federal races where the state carbon fee on fuel was not an issue.

Massachusetts state Representative Marc Lombardo (R-Billerica) criticized Governor Baker for the decision via Twitter on Monday.

“I’m extremely disappointed that the Governor, in a Xmas week news dump, chose to join TCI which multiple studies show will increase gas prices by up to 38 cents per gallon,” Lombardo wrote. “This hurts families that can least afford to pay and is another kick in the teeth to struggling businesses.”

Back in January, some Republican state representatives also expressed concerns over the possible process for implementing the carbon fee on fuel.

Baker administration officials have suggested that the administration already has the authority to implement a carbon on fuel thought the state’s Global Warming Solutions Act of 2008.

But several GOP state legislators say that the carbon fee would amounts to a new tax, and therefore should need approval from the state Legislature in order to take effect.