The Carbon Car Tax Nobody Is Discussing

By Steve Haner

So far there appear to be about six schemes before the 2020 General Assembly to save the Earth and its inhabitants from the fiery holocaust of climate catastrophe. The one that is going to cost you the most money in the shortest period of time is still missing in action. Finally we have details, but not from anybody in Richmond.

The organizers of the Transportation and Climate Initiative (TCI) met and held a streamed webinar in Washington, D.C. Tuesday, releasing their long-anticipated draft memorandum of understanding and quite a bit more information about the impact of this new carbon car tax. See the slides here. Does a starting bid of 17 cents per gallon on gasoline get your attention? Do not confuse this with the separate proposal from Governor Ralph Northam to add 12 cents onto the existing state excise tax. 

The other side is organizing, as well, including the Thomas Jefferson Institute for Public Policy. You can read that opposition coalition’s initial statement here, along with an analysis by my Jefferson Institute colleague David Schnare.

The TCI interstate compact, in formation since 2010, reaches from Maine to Virginia, including the District of Columbia. In New England the public is starting to get riled up, to the point that Governor Chris Sununu of New Hampshire is now on record opposing his state participating. The cartoon above was produced by a Connecticut group opposing the idea.

In Virginia we hear only crickets.

Right now, TCI is all about over-the-road fossil fuels, gasoline and diesel. Make no mistake about it, the long-term goal is elimination of those fuels from Virginia’s economy, perhaps along with aviation fuel and then off-road uses of petroleum products.

This uses a classic cap and tax approach, with the amount of fuel offered for sale capped and then slowly reduced (rationed). The fuel wholesalers will be the ones required to report their sales and buy allowances (a.k.a. a carbon tax) for each gallon they procure. They will be chasing after allowances from a shrinking pool, and if all the allowances are used up, the organizers of TCI will cheer. You won’t, of course, but they will.

The plan is to approve this by spring, implement it in 2022 and start the carbon tax and supply reductions (rationing) from there. The presentation Tuesday focused on a goal of a 25% reduction by 2032, but normal market forces are already reducing these emissions by up to 19% over the same period. A TCI goal of a 25% is too easy for these activists, with a laughably infinitesimal reduction in atmospheric CO2. Actually, it is a laughably infinitesimal reduction in the growth of CO2, which will keep on rising.

One estimate already produced using the same CO2 models used by the United Nations found the impact too small to measure, a zero and decimal followed by more zeros before an integer appeared. In their presentation Tuesday, the TCI organizers spent very little time on the claimed climate benefits and more time talking about other health benefits they project from reduced fuel use, based on other pollutants emitted by engines. Their main selling point, however, is the wonderful things that can be done with the piles of revenue to come.

The 25% solution they modeled would collect $5.6 billion in taxes in 2022 and $6.9 billion by 2032, so about $60 billion over ten years out of the pockets of individuals, businesses and (one assumes) governments buying fuel. The goodies they propose to spend it on include charging stations and other support for electric vehicles, mass transit expansion, bike and walking paths – just about everything but the roads, bridges, tunnels and maintenance Virginia needs and is already struggling to fund. Has anybody told the bonding agencies backing state highway debt about this?

A switch to a vehicle-miles-traveled approach will become essential to funding transportation infrastructure. For the Governor to propose a gas tax increase as a solution, when he has joined a conspiracy working toward the elimination of liquid hydrocarbon fuels, is like a magician waving one hand to distract you from his other one.

A 17 cents-per-gallon gasoline tax coupled with a process to ration the fuel toward eventual prohibition will have far more impact on people and businesses than the possible costs of the Regional Greenhouse Gas Initiative on electric power. Nobody is pointing to and analyzing the interaction between these two, either. (Example:  Should this succeed in forcing us all into EV cars and trucks, what does that do to power generation needs? To a grid more dependent on intermittent renewable sources?)

The wall of silence surrounding this idea needs to come down. This very bad proposal needs a full airing with the affected people and businesses, and then must be adopted or rejected openly by the General Assembly. The polling released in advance of the details was effectively skewered as cooked by blatant question bias by Jim Bacon last week. Had anybody asked Virginians about a carbon car tax, results would have been very different.