Mass. will get a windfall from its new anti-pollution pact. What will it buy?

For years, Governor Charlie Baker argued Massachusetts does not need new revenue for its transportation system — often to the frustration of transportation advocates, business groups, and labor unions that have said the state’s aging infrastructure needs an infusion of cash.

So it is with some irony the Baker administration spearheaded the state’s largest package of new transportation revenue in years: the Transportation and Climate Initiative.

On Monday, Massachusetts joined Rhode Island, Connecticut, and Washington, DC, to unveil the program, which will set a cap on carbon emissions from vehicles and require fuel distributors to pay for pollution beyond those levels. Massachusetts projects it would receive more than $160 million a year starting in 2023.

How to spend the money? The program is intended to reduce pollution from the transportation sector, but there are many routes to doing that, from hastening the adoption of electric cars, to expanding public transit, to getting people out of cars altogether.

Massachusetts officials are not yet saying how they would use the proceeds. The Department of Environmental and Energy Affairs said that the three states and the District of Columbia will establish a regional organization that collects the revenue and sends it to the states.

Meanwhile, state officials will hold a public process “to determine the best way to invest TCI funding in Massachusetts to reduce greenhouse gas emissions, improve public health, and increase access to transportation while prioritizing overburdened and underserved communities,” said spokeswoman Katie Gronendyke.

In the past, the Baker administration has said half the funds should go toward public transit. Other uses could include better biking and walking infrastructure, expanding subsidies for the purchase of electric cars, and installing more EV charging stations.

Some could even be used for projects not so obviously related to transportation, such as strengthening broadband in rural areas to encourage more remote work. State Representative William Straus, however, has questioned whether that would be allowed under the Massachusetts constitution, which requires transportation revenue to go toward transportation initiatives.

The state’s use of another pot of money to clean up the transportation sector may also be instructive: the massive Volkswagen legal settlement for cheating on emission standards. The state’s share, in the tens of millions of dollars, has so far been used to help smaller transit agencies purchase electric buses, add more electric charging stations, and provide grants to companies and local governments to replace their fleets with cleaner vehicles.

Some of those grants were used to replace older, dirtier diesel vehicles with more efficient fossil-fuel powered trucks that emit less pollution; others funded electric school buses and shuttles. The city of Cambridge used its money to buy plug-in hybrid garbage trucks, a particularly good use of electric technology because they start and stop so frequently.

The TCI agreement mostly leaves these decisions to the states, but offers guidance in one area: states must spend at least 35 percent of the proceeds in communities that have suffered the most from air pollution — often low-income areas and communities of color, especially near highways.

Each state will also be required to establish a sort of oversight board to ensure the funds are being used equitably.

Even that measure is inadequate, said Maria Belen Power, associate executive director GreenRoots, an advocacy organization in Chelsea — which, between the Tobin Bridge and Logan Airport, has long suffered from air pollution. She questioned whether “environmental justice” communities such as Chelsea will see a reduction in pollution from the policy; the participating states estimate that overall, TCI would reduce emissions by about 26 percent in their jurisdictions over a decade.

The 35 percent spending threshold, Power said, “is a slap in the face. She called for more of the funding to go to public transit in these communities. “EJ communities have been bearing the brunt for inequitable service.”

The equity measure was introduced late in the TCI negotiations. And it came as social justice and even environmental groups pressured some states not to join the pact — reflecting the political left’s skepticism of carbon taxes and cap-and-trade systems. They argued TCI will be unfair to low-income people by increasing gas prices; organizers expect it to lead to an increase of between 5 and 9 cents a gallon.

The proper use of TCI money will require “thoughtful” debate and consideration, said Chris Dempsey, director of the nonprofit Transportation for Massachusetts and one of TCI’s strongest supporters. Helping people replace gas-powered cars with electric vehicles may have a more immediate impact on air pollution, while adding new transit options could have more significant long-term environmental benefits, he said.

“We’ve got two years to figure out how best to slice this pie to maximize both carbon reduction and benefits to Massachusetts residents,” Dempsey said. “The most important thing now is that this pie exists, thanks to Governor Baker.”