Massachusetts and 11 other Northeastern and mid-Atlantic states released a framework agreement Tuesday for a “cap-and-invest” system to curb transportation emissions, the nation’s largest source of greenhouse gases.
The plan, which includes Washington, D.C., seeks to cap vehicle emissions from Maine to Virginia and would require hundreds of fuel distributors in participating states to buy pollution permits for the carbon dioxide they produce. That cap would decline over time, mirroring a similar compact that has reduced power plant emissions in the Northeast.
The current proposal does not include crucial, potentially controversial details, such as how much pollution would be allowed, how much the permits would cost, and how quickly the caps would decline. That information is slated to be released later this year.
But state officials hailed the agreement as a milestone that would curb emissions of more than 45 million registered vehicles and said they hoped many of the states would sign a more detailed agreement next spring. The transportation sector is responsible for 28 percent of US greenhouse gas emissions and 40 percent of the region’s emissions.
“This entire project aims to reduce emissions, improve public transportation, equity, mobility, and engagement,” said Kathleen Theoharides, secretary of the Massachusetts Executive Office of Energy and Environmental Affairs, who has chaired the effort known as the Transportation and Climate Initiative.
One of her priorities has been to ensure the agreement serves the interests of lower-income populations, as well as rural communities where there are fewer transportation options, she said.
“The communities most impacted by climate change are often the least able to respond,” she said.
If approved, the pact would be modeled after the Regional Greenhouse Gas Initiative, a nine-state regional cap-and-invest system for power plant emissions. Widely seen as a national model, the mandatory market-based program has helped reduce power plant emissions from Maryland to Maine by about 40 percent below 2005 levels without raising average electricity prices, according to the initiative.
In a cap-and-invest program, companies would be required to pay for the pollution they emit. The price would probably rise as the amount that each company is allowed to produce would decline over time. The program would begin as early as 2022 and reach a target emissions level in 2032, according to the agreement.
Groups that represent fossil fuel interests and businesses have expressed skepticism about the plan, concerned it will increase transportation costs.
“For small businesses, increasing the price of fuel is the sort of thing they don’t need to see,” said Chris Carlozzi, director of the Massachusetts chapter of the National Federation of Independent Businesses. “We’re going to be monitoring this. Any competitive disadvantage is something we don’t want.”
Theoharides said the states are still negotiating over whether to place requirements on how the proceeds from the pollution permits, also known as allowances, could be used. The goal is to invest the money in a range of transportation-related projects, such as public transit, carpooling, and subsidies to accelerate the adoption of electric vehicles, she said.
Massachusetts has already pledged to devote half of the proceeds to the Commonwealth Transportation Fund, where it would be used to reduce emissions and shore up the state’s transportation system against rising sea levels and other consequences of climate change, she said.
In addition to Massachusetts, Maine, New Hampshire, Rhode Island, Vermont, Connecticut, New York, New Jersey, Pennsylvania, Delaware, Maryland, and Virginia are participating in discussions. North Carolina is also considering joining.
If all the states join the coalition, it would constitute more than one-fifth of the nation’s population and a quarter of the country’s economic output. If the states formed a single country, they would rival Japan as the world’s third-largest economy.
One group that has long called for a regional agreement on transportation emissions estimated it could raise more than $5.5 billion over a decade and generate more than 50,000 jobs in Massachusetts.
“The framework agreement is a major achievement for this bipartisan group of states,” said Jordan Stutt, carbon programs director for the Acadia Center, an environmental advocacy group in Boston.
Stutt and others cautioned that its effectiveness will depend on the details.
“The TCI program will be a success if this framework is paired with an emissions cap that reflects the urgency of the climate crisis,” he said. “We’ve run out of time for anything less than that.”
Chris Dempsey, director of Transportation for Massachusetts, urged the states to take action soon.
“Massachusetts residents deserve a robust and equitable regional agreement that will clean up our air and enable new investments in our transportation system statewide,” he said.
In some states, joining the coalition may require legislative approval.
“We leave this up to the states to interpret their authority and decide how best to work with their legislators,” said Vicki Arroyo, executive director of the Georgetown Climate Center, which helped facilitate the agreement.
In Massachusetts, state officials said they likely have authority under the 2008 Global Warming Solutions Act to implement the agreement without such a vote.