Could climate change bill mean new funding?

Introduction

The National Surface Transportation Infrastructure Financing Commission released a much-anticipated “road map” this morning to help guide Congress as it looks to reauthorize the country’s surface transportation system — a system in crisis, according to the report, in part because Congressional funding mechanisms for new roads and transit systems are widely viewed as inadequate.

“The stakes are too high and the hole we have dug for ourselves is too big to wait for a new revenue system to be put in place,” the report states.

A portion of the answer may lie in prospective legislation dealing with climate change. Among the federal revenue options deemed “strong” by the Commission: the prospect of partially funding transportation through a carbon tax or cap and trade system, which would raise hundreds of billions of dollars per year from the auction of carbon emissions permits. A new report by the Center explores what climate change legislation might mean for public transportation agencies faced with shortfalls.

The Commission estimates that carbon taxes or a cap and trade system “would yield gross revenues of nearly $46-92 billion per year” from the transportation sector, though that number would likely drop over time due to many factors, like improved auto mileage. The transportation sector accounts for roughly 28 percent of U.S. greenhouse gas emissions, much of it from automobiles. The commission noted that the number of miles traveled by cars nearly doubled over the past quarter century.

But the transportation sector might also receive carbon-related tax proceeds allocated by the government, though assessing how much, the report said, would be “difficult.”

The American Public Transportation Association, along with a number of other groups allied in new coalitions focused on transit and rail funding, like Transportation for America and OneRail, will be looking for more of those revenues to be dedicated to projects that reduce emissions, like, say, mass transit.

“I think we really are seeing a sea change here,” said Paul Dean, director of government relations at APTA.

But there’s still political spadework to be done. While the commission rated carbon taxes as an “excellent” source of revenue potential for transportation, it deemed the “public acceptance/political viability” of the option as “fair.”

A bigger obstacle may simply be priorities. In his $3.6 trillion budget proposal, President Obama has proposed a cap-and-trade program for greenhouse gas emissions, which he hopes would bring in $646 billion in revenue over ten years — but the budget calls for less than a quarter of that revenue to pay for “clean energy technologies.” The rest of the revenue would go to lower- and middle-class tax relief.