Virginia Opts Out Of Climate Initiative, But May Consider It Later On

Proponents Argue The Initiative Will Help Fight Climate Change And Opponents Assert It Will Increase Costs For Households.

The Center Square [By Tyler Arnold]-

Virginia was not in the first slate of states to join the Transportation and Climate Initiative, which proponents argue will help fight climate change and opponents assert will increase costs for households.

Under the multistate agreement, a state would agree to establish a cap on diesel and gasoline sales and require wholesales to purchase carbon allowances to go over that limit, which effectively creates a carbon tax. The initiative has received support from many Democrats and opposition from Republicans.

Massachusetts, Connecticut, Rhode Island and Washington, D.C., were first to join the compact, but the implementation was delayed until 2023. Several other states that expressed interest opted not to join, at least immediately, including Virginia, Pennsylvania, Maryland, New Jersey and New York. It’s unclear whether the commonwealth intends to join the initiative when the economy is more stable.

“Virginia families and businesses can relax a bit, but only perhaps for a year,” Stephen Haner, a senior fellow for state and local tax policy at the free-market Thomas Jefferson Institute for Public Policy, told The Center Square.

“If Virginia joins this, even on a delayed basis, the cost of motor fuels will grow dramatically,” Haner said. “First it involves a major carbon tax, and second it imposes rationing on motor fuels, which will trigger a supply-and-demand-driven price spike. This is the intent of the program – prevent the sale of gas and diesel – although they will not admit it. Also, since most surrounding states are not slated to join this, border area residents and interstate trucking firms can just get their fuel across the line.”

Haner said the decision to delay implementation made it easier for Gov. Ralph Northam to delay the state’s decision, but the institute will continue to spread the message about how the compact would affect the state.

According to a study by the Beacon Hill Institute for Public Policy commissioned by the Thomas Jefferson Institute, the agreement would have cost the average Virginia household $737 annually and caused the state to lose more than 12,000 jobs in 2022 if it had been implemented by its original date. The study found the gas tax combined with the carbon allowances could be nearly 70 cents a gallon, but supporters have estimated a smaller increase.

Although recognizing there would be a modest increase in gas prices, Morgan Folger, a spokesperson for Environment Virginia, told The Center Square the benefits of joining the compact would outweigh the negatives. She said Virginia’s transportation sector is the worst polluter for pollution that contributes to climate change.

Folger said it would have been good for Virginia to be in the first slate of states to join, but Environment Virginia will continue working with the state government and hopes it will join in the coming months. She also said there are other benefits to joining the compact, including more transportation options for Virginians.

The initiative includes the promotion of certain principles: expanding transportation; promoting economic prosperity with land-use agencies at federal, local and regional levels; and enhancing natural resource protection.

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