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ARTICLE · 19 DECEMBER 2019

Coming Your Way (Relatively) Soon: A Carbon Fee On Transportation Fuels

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The 12 states and the District of Columbia participating in the Transportation and Climate Initiative announced today the release of a new draft Memorandum of Understanding

United StatesEnvironment
Seth Jaffe
Seth Jaffe
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The 12 states and the District of Columbia participating in the Transportation and Climate Initiative announced today the release of a new draft Memorandum of Understanding that outlines the framework of what they are calling a cap and invest program for cars and trucks. In short, it will require persons selling gasoline and on-road diesel at the wholesale level to hold allowances – which will be auctioned – in order to continue to sell such on-road fuels. Think of it as RGGI for cars.

Given continued progress at decarbonizing our electricity supply, transportation is the next big hurdle. A lot remains to be done before a program is in place (the MOU states that the first compliance period will "commence as early as January 1, 2022″). Nonetheless, this is a significant accomplishment. Getting a regional transportation climate program off the ground will be a major success.

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