In the business world, there are many different formulas for financial success, yet many have the same prerequisite: access to reliable, affordable, and relatively efficient and sustainable transportation infrastructure.
Now, in the midst of the current pandemic, a recent report from Harvard links increased exposure to vehicle emissions in low-income communities and communities of color to higher mortality rates from COVID-19.
In our home state of New York, where we have been hit hard by the pandemic, the time to clean up transportation and decarbonize the economy is now. The transportation sector is responsible for 40% of total greenhouse gas (GHG) emissions. Taking urgent steps to eliminate these harmful emissions will mitigate the worst impacts of the climate crisis, while directly benefiting local economies and public health.
At Miller/Howard Investments, we understand the importance of identifying contributors to this growing problem and, where we see areas for improvement, engaging with our portfolio companies. We encourage them to take necessary action to reduce their emissions in their operations and supply chains. That is why we are pleased to see states exploring a solution to curb transportation pollution through the Transportation and Climate Initiative (TCI).
The policy proposal, developed by 12 Northeast and Mid-Atlantic states, including New York and the District of Columbia, establishes a regional cap on transportation emissions, and requires gasoline and diesel wholesalers to purchase allowances for the emissions content of their fuel. Proceeds from the TCI allowance sales would be used to invest in a cleaner, more efficient transportation system in the participating states.
TCI is also technology-neutral and allows participating states to follow market signals to attempt to maximize returns, and avoids specific technology standards that can be costly and economically inefficient. States can invest in public transit, transportation electrification, pedestrian and cycling infrastructure, clean biofuels and other innovative technologies to help achieve the initiative’s goal of slashing emissions and accelerating the transition to cleaner transportation options.
TCI was modeled after another successful effort, the Regional Greenhouse Gas Initiative. RGGI has proven the effectiveness of cap-and-invest policies in reducing emissions while growing the economy. In fact, since it began in 2009, the initiative has helped to reduce carbon emissions from power plants in participating states more than 47% while the region’s economy thrived.
The public health benefits of these initiatives alone should encourage lawmakers to swiftly adopt them. Modeling shows that reducing tailpipe emissions by up to 25% leads to monetized regional annual public health benefits of as much as $10 billion. And a report from the American Lung Association further promotes public health cost savings from investing in electric transportation and reducing emissions. In fact, it indicates that electrifying the New York metropolitan area’s transportation system would yield $5 billion in health benefits by 2050. These benefits would come from improving air quality, which would lead to fewer premature deaths and help improve asthma symptoms due to air pollution.
From our perspective, the case for reducing transportation emissions is clear, and TCI is an effective and balanced approach to doing so. Perhaps that’s why Miller/Howard was joined by more than 100 investors and companies in calling for a regional approach to tackling transportation emissions. Furthermore, recent polling shows strong public support for TCI, with 70% of New Yorkers in favor of joining the program.
From where we sit, TCI is a no brainer and a critical part of the effort to transition to a clean transportation future. We urge New York to join with our neighboring states to drive this initiative forward.