US states hit the road in climate change fight

Regulators looking at vehicle pollution, the source of 35% of emissions in north-east

NEW YORK • Some US drivers may soon see a new expense at the petrol pump: the cost of taking the global warming fight on the road.

New York and four other states are exploring ways to put a price on the air pollution spewing from cars, trucks, trains and other vehicles - the source of more than a third of greenhouse gas emissions in the north-eastern United States.

The result may eventually be new taxes, tolls or a pollution-trading system that could raise US$3 billion (S$4.3 billion) a year or more for mass transit, electric-vehicle rebates and other projects, supporters say.

With the Paris climate deal in the rear-view mirror and governments moving already to put a price on industrial emissions, especially from power plants, regulators are starting to focus on tailpipe pollution.

"Transportation is one of the largest sources of carbon dioxide emissions in the nation and innovative strategies are needed to reduce these emissions," Ms Lori Severino, a spokesman for New York state's Department of Environmental Conservation, said in an e-mail. She stressed that discussions "are just beginning" and there's no preference for specific policies.

The states may follow the lead of California, which last year extended its pollution-trading system to cover fuel distributors and refineries.

The impact would ripple far beyond the direct targets, however, affecting drivers at the pump, oil companies worried about petrol sales and automakers that may see demand shift towards more efficient vehicles.

In their Nov 24 letter, released on the eve of global climate talks in Paris, the five states vowed to "achieve substantial reductions in transportation sector emissions and provide net economic benefits".

Besides New York, the effort includes Connecticut, Delaware, Rhode Island and Vermont, along with Washington, DC. The group pledged to study "market-based policies" to cut transportation emissions; they're expected to resume talks early this year, according to Ms Vicki Arroyo of the Georgetown Climate Centre in Washington, which is organising the review.

Options under discussion include petrol taxes, tolls or fees based on kilometres driven or vehicle efficiency. Also likely to be discussed: a cap- and-trade system, in which regulators set a limit on total pollution and let individual companies buy and sell permits covering their output.

That theoretically encourages participants to find cost-effective ways to clean up the air.

New York and eight other states already run a trading system for power-plant emissions in the north- east, the Regional Greenhouse Gas Initiative. California has a similar market and expanded it last January to include transport fuels.

Such efforts are a necessity if states are to make the deep greenhouse-gas cuts they have promised by mid-century. Transportation accounts for 35 per cent of carbon emissions in the north-east and mid-Atlantic, the single largest source, according to the report.

The attraction is both financial and environmental: States have seen gas-tax revenue shrivel as people drive less and use more efficient cars; they've also seen the power-plant cap-and-trade market generate more than US$1 billion by auctioning permits to polluters.

"They come to the table interested in models that do something about transportation emissions while still bringing in revenue," Ms Arroyo said.

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A version of this article appeared in the print edition of The Straits Times on January 13, 2016, with the headline 'US states hit the road in climate change fight'. Print Edition | Subscribe