Nine Northeast and Mid-Atlantic states and the District of Columbia announced this week a new regional initiative to cap and reduce greenhouse gas pollution from the transportation sector.  Much remains to be decided before the program takes effect, however.

Connecticut, Delaware, Maryland, Massachusetts, New Jersey, Pennsylvania, Rhode Island, Vermont, Virginia, and Washington D.C.[1] aim to cap carbon emissions from combustion of transportation fuels, and invest the proceeds into low-emission and improved transportation infrastructure, including by aiding electric vehicle adoption, and increasing public transit and biking opportunities.

The initiative is yet another example of state governments aggressively moving to regulate climate change issues, while the federal government has sought to reverse the prior administration’s signature climate policies, proposing to roll back fuel economy standards and ease power plant regulationsCalifornia and New York are the largest states that have announced aggressive emission reduction and clean energy goals.  Among the signatories to the new transportation initiative, Massachusetts and Connecticut have adopted goals, and the District of Columbia’s clean energy legislation is awaiting the Mayor’s signature.

By choosing to address transportation emissions, the initiative expands the regional coordination that several of these states have demonstrated in reducing emissions from the power sector through their participation in the Regional Greenhouse Gas Initiative (RGGI), a cap-and-trade program for power plant emissions in northeastern states.  RGGI has had a relatively limited impact upon power sector emissions, however, such that its members have had to seek to better align market incentives with their own decarbonization goals through other means, such as establishing a separate cap upon power plant emissions within the state, or proposing an additional carbon price on electricity generators equivalent to the social cost of carbon.  The RGGI member states could have followed the lead of California’s economy-wide cap-and-trade program that includes emissions from both the electricity and transportation sectors by expanding RGGI to include transportation emissions. By choosing instead to establish a separate cap for the transportation sector, these states are charting a new path in seeking to address carbon pollution in the absence of federal leadership.

Many critical details remain to be decided:  The states agreed only on the shared goal of negotiating a cap-and-reduce policy proposal for transportation fuels, to be completed over the next year.  The level at which emissions will be capped, monitoring and reporting mechanisms, timelines for adoption, and even what industry is regulated under the system, are all to be determined.  States would then have to formally join the initiative through their internal political processes before any restrictions would take effect.

Notwithstanding the remaining steps, however, the initiative is a major announcement.  The participants represent roughly 17.5 percent of U.S. GDP, and would on their own be the fifth largest economy in the world, ahead of the United Kingdom.  The decision to tackle the transportation sector is also significant, as it has in recent years eclipsed the power sector as the largest U.S. source of greenhouse gas emissions.

 

[1] New York State, despite hosting two of the stakeholder sessions in the lead-up to the announcement, has not yet joined the initiative.

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Photo of Kevin Poloncarz Kevin Poloncarz

Kevin Poloncarz represents a broad range of clients on policy, regulatory, litigation, commercial, and enforcement matters involving air quality, climate change, and clean energy. He co-chairs the firm’s Environmental Practice Group and Energy Industry Group.

Mr. Poloncarz is ranked by Chambers USA among…

Kevin Poloncarz represents a broad range of clients on policy, regulatory, litigation, commercial, and enforcement matters involving air quality, climate change, and clean energy. He co-chairs the firm’s Environmental Practice Group and Energy Industry Group.

Mr. Poloncarz is ranked by Chambers USA among the nation’s leading climate change attorneys and California’s leading environmental lawyers, with sources describing him as “a phenomenal” and “tremendous lawyer.” He was named an “Energy & Environmental Trailblazer” by the National Law Journal in 2017 and was inducted as a Fellow of the American College of Environmental Lawyers in 2018.

He has extensive experience with California’s Cap-and-Trade Program, Low Carbon Fuel Standard (LCFS), Renewables Portfolio Standard (RPS), and is recognized as a leading advisor on carbon markets. He also assists energy-sector clients in obtaining and defending state and federal approvals for major projects throughout California.

Mr. Poloncarz also assists clients with the development and execution of legislative and policy strategies supporting decarbonization, including carbon capture and sequestration, low-carbon fuels, advanced transportation and energy storage, and is a registered lobbyist in California and Oregon.

Photo of Gary S. Guzy Gary S. Guzy

Gary Guzy brings thirty five years of experience in environmental law, regulation, and public policy. He provides counsel to industry leaders in the transportation, energy, technology, and consumer sectors on emerging environmental and clean energy issues. He is skilled at creating strategic partnerships…

Gary Guzy brings thirty five years of experience in environmental law, regulation, and public policy. He provides counsel to industry leaders in the transportation, energy, technology, and consumer sectors on emerging environmental and clean energy issues. He is skilled at creating strategic partnerships that bring together diverse groups to resolve challenging public policy controversies through close work with industry and environmental community leaders. Mr. Guzy co-chairs the firm’s Energy Industry Group.

Mr. Guzy served as Deputy Director and General Counsel of the White House Council on Environmental Quality (CEQ). In this position, he helped develop and guide the Obama Administration’s environmental, public health, and clean energy agenda, bringing business insights to government policy and coordinating policy across government agencies. He spearheaded negotiations that achieved the Obama Administration’s agreement to double motor vehicle fuel efficiency standards and significantly cut greenhouse gas emissions with the support of automobile manufacturers, states, labor unions, environmental and consumer groups, and Congress. Mr. Guzy also led CEQ’s efforts to modernize permitting and environmental review under the National Environmental Policy Act, and counseled federal agencies on how to fulfill their NEPA obligations for dozens of high profile decisions and assisted in resolving NEPA controversies at numerous complicated sites.

Mr. Guzy served as General Counsel of the U.S. Environmental Protection Agency and Counselor to the EPA Administrator during the Clinton Administration. He was a member of the Administrator’s senior policy team, setting regulatory, legislative, and communications strategy. He led efforts to design regulatory approaches to protect children’s environmental health, develop and defend new air quality and motor vehicle standards, defend EPA from Congressional oversight investigations, and protect iconic ecosystems such as the Everglades and Yellowstone National Park. He also authored climate change opinions that were later ratified by the U.S. Supreme Court in its landmark decision finding that greenhouse gases are pollutants under federal law.

Mr. Guzy has also served as the chief legal officer, sustainability officer, and climate strategist for a variety of business organizations

Photo of John Mizerak John Mizerak

John Mizerak is an associate in the firm’s Washington, DC office. He focuses on environmental matters as well as civil and administrative litigation, and has advised on issues under the Clean Air Act, Clean Water Act, CERCLA, and other environmental and energy regimes.