TCI Breakdown

Earlier today, the Transportation Climate Initiative released their long awaited memorandum of understanding (MOU) that contains the details of the TCI gas tax scheme. Here are some of the key takeaways: 

The baseline scenario used by TCI to project what would happen from 2022-2032 if states DID NOT IMPLEMENT THE TCI projects a 19% REDUCTION in carbon emissions over that decade.

If TCI is implemented, emissions are then projected to fall by between 20% and 25% in total for the decade. So that’s an increased emissions reduction of between 1 and 6 percentage points on top of a presumed reduction of 19 percent — which means that the huge economic costs imposed by the TCI are less effective at producing emissions reductions than are policies and practices that are already in place — namely fuel economy standards and increased sales of electric vehicles.  

TCI revenue is projected to fall between $1.4 billion and $5.6 billion ANNUALLY.  To produce a mere 1% point reduction in emissions over 10 years, they would impose a $14 billion tax on the region’s economy. To produce the high-end estimate of an additional 6% point reduction in emissions (25% overall), they would impose a $56 billion tax on the region’s economy. The 25% decrease is best case scenario.

TCI projects that when the costs are passed on to consumers, gas taxes will increase by:

5 cents per gallon in 20% reduction scenario

9 cents per gallon in 22% reduction scenario

17 cents per gallon in 25% reduction scenario


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