By Susan Dio
The states have long been pioneers of progress in America, running experiments that help us discover solutions to our toughest challenges.
Today, Connecticut has a chance to tackle the defining issue of our time: climate change.
Leaders in Hartford should seize the opportunity and embrace a regional plan to reduce greenhouse gas emissions in the transportation sector.
Transportation accounts for nearly a third of all U.S. emissions. But a plan from the Transportation and Climate Initiative (TCI) — a multi-state collaborative effort facilitated by the Georgetown Climate Center — would cap and reduce those emissions in participating states.
How does it work? It uses the power of competitive markets to change behaviors and encourage innovation, first by placing a regional cap on emissions and then requiring companies to buy or trade allowances to emit up to the limit of the cap. Because the cap reduces annually, the allowance price will rise every year. This gives the certainty companies need to invest and develop new technologies faster and at the scale required for real progress.
The proposal follows a model used in power markets known as the Regional Greenhouse Gas Initiative (RGGI). This highly successful policy program helped Connecticut and other states reduce emissions from the power sector across the Northeast and mid-Atlantic.
Since 2008, power-sector emissions have plummeted in RGGI states at a rate almost double the rest of the nation. Critically, GDP in these states outpaced growth elsewhere by 31% over the same decade, proving states don’t have to choose between the economy or the environment.
That’s the power sector, but we don’t need to reinvent the wheel to get the same results in transportation. And because the TCI plan follows RGGI’s market-based approach, public servants can feel confident they’re following a proven model.
They’d also give the people of Connecticut a reason for optimism on climate change. While there’s no doubt global carbon emissions are trending in the wrong direction, RGGI’s success shows how targeted carbon pricing programs are working across the region.
These proposals also help sustain low carbon policies more broadly. Carbon pricing policies like RGGI and TCI help create carbon reduction projects that earn the credits essential to making pricing programs — like those in California and others around the world — work as designed.
Like states, businesses also drive innovation and progress. And BP wants to do its part in reducing global emissions.
BP’s new CEO Bernard Looney recently announced our ambition to become a net zero company by 2050 or sooner. BP’s support for carbon pricing is part of this bold vision. We believe in it so much, we’re stopping corporate reputation advertising and re-directing that money to promote net zero policies, ideas and collaborations instead.
But while companies like BP can — and must — play a leading role in bringing about a lower carbon future, strong and effective government policy is essential. Put simply, the world isn’t moving fast enough to curb emissions and limit the impacts of climate change.
While a national carbon pricing program could become the gold standard in the future, state and regional plans can play a critical role now — and we can’t wait.
That’s why BP supports well-designed carbon pricing programs.
Gov. Lamont and Connecticut have a real opportunity to lead on reducing regional carbon emissions. Carbon pricing is the most efficient and comprehensive way to reduce greenhouse gas emissions.
Susan Dio is chairman and president of BP America, an oil and gas company based in Texas.