How will this work, and who will pay?


Northeast and Mid-Atlantic states are considering a policy known as “cap-and-invest” to clean up and modernize transportation. The policy would establish a total regional limit, or cap, on the amount of pollution from vehicle fuels, and this cap would decline over time, reducing more and more tailpipe pollution and making communities healthier.

To enforce the cap, major fuel suppliers would be required to buy carbon allowances—each equal to one ton of carbon dioxide emitted—in proportion to the pollution from the fuels they sell. These allowances would be sold at auction up to the cap level. As the cap ratchets down, suppliers would have to reduce their pollution, switching to cleaner alternatives.

Auction revenues would be invested in programs to accelerate the transition to cleaner, more efficient, and more affordable transportation options. Policymakers could prioritize investments in projects that benefit communities most harmed by pollution; improve public transportation and public health; accelerate the deployment of clean, electric buses and trucks; and lower the cost of purchasing clean vehicles, all while helping to grow our economy and create jobs. These investments will help transform our broken transportation system into a world-class network that provides more transportation options, improves our quality of life, cleans up the air, and better serves all Northeast and Mid-Atlantic residents.

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