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State study recommends new taxes and fees to help Maine reach carbon reduction goals

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The Governor’s Office of Policy Innovation and the Future (GOPIF) and the Governor’s Energy Office (GEO) on December 14 released the Clean Transportation Roadmap to 2030, a study that recommends policies aimed at reducing greenhouse gas emissions within the transportation sector.

The study originated from an executive order signed by Gov. Janet Mills on March 30, 2021. The order directed the GEO and the GOPIF to work with the Department of Transportation, the Efficiency Maine Trust, the Department of Environmental Protection and “other agencies engaged in electrical vehicle advancement” to develop a roadmap to “accelerate the widespread adoption of electric vehicles, plug-in hybrid electric vehicles and other clean transportation technologies in Maine.” The study was required to be delivered to Mills by December 31. 

According to a press release from the GOPIF, the policy recommendations made in the study are designed to support Maine Won’t Wait, the state’s four-year climate action plan. One of the goals of the plan is to reduce the state’s emissions 45% by 2030, which the Maine Won’t Wait plan estimates requires putting 219,000 light-duty electric vehicles on the road by 2030.

The analysis conducted in the roadmap was developed by Cadmus, which describes itself as a “strategic and technical consultancy compelled to help solve the world’s most challenging problems.” The group recommended new programs for state government, local governments, utilities and regulators, and the Efficiency Maine Trust.

Recommendations for State-Run Programs

Cadmus made eight recommendations for new or expanded programs that can be run by the state or by the Efficiency Maine Trust.

According to the study, the two most important of these are an Advanced Clean Cars II program and an Advanced Clean Trucks program. The goal of these programs is to increase adoption of electric vehicles. According to the roadmap, if these two programs are adopted and remain unchanged, they can lead to “large reductions in transportation sector GHG emissions” amounting to a 60% to 70% reduction in greenhouse gas emissions (GHG) from the transportation sector by 2050.

Another recommended program involves expanding the electric vehicle charging network through public ownership or a public incentive to adopt direct-current fast charging equipment. The study cites Cadmus’ research, which suggests a 15% increase in public charging stations will boost the sale of electric vehicles by 7% in 2030.

The study also recommends the state expand its charging network by creating a charger incentive program for multi-unit dwellings. 

Other policy recommendations are focused on incentivizing clean vehicles. The study recommends creating an electric vehicle rebate program for low-income households. It also recommends a “Cash for Clunkers” program that would offer a financial incentive for turning in old, gas-powered cars and purchasing electric vehicles.

Other recommendations include creating a financial incentive to encourage converting fleets of heavy-duty and medium-duty vehicles, such as trucks used in shipping, to electric vehicles, and a marketing and awareness campaign designed to ensure the public has “concise, accurate information on clean transportation modes, incentives, and technologies.”

Recommendations for Local Programs

The study also recommends four programs that can be implemented at the local level. 

One program recommends adopting electric vehicle-ready building codes, designed to expand the charging network. Cadmus’ analysis suggests installation costs increase when parking spaces are converted to include charging stations after construction as compared to during construction.

Two other proposed programs are aimed at reducing the number of vehicle miles traveled by cars and shifting modes of transportation. Cadmus recommends creating transit villages to encourage local development oriented around transit and local investment in non-motorized modes of transportation, such as electric bicycles and scooters.

Cadmus also recommends marketing and awareness campaigns conducted at the local level.

Recommendations for Programs Run by Utilities or Efficiency Maine Trust

The final four programs recommended in the study are intended to be implemented either by utilities and their regulators or the Efficiency Maine Trust.

Cadmus analyzed Central Maine Power’s (CMP) rates and recommended the company lower its demand charges in order to facilitate expansion of the electric vehicle charging network. Cadmus also recommends utilities remove barriers to expanding charging infrastructure.

In order to incentivize clean vehicles, the study also suggests the adoption of time of use rates, which would encourage people to use electricity at times when demand on the electric grid is not at its peak.

Cadmus also recommends a marketing and awareness campaign on this front. 

Recommended Funding Mechanisms

The study notes that Maine’s current funding for electric vehicles is “insufficient beyond fiscal year 2022 or 2023.” Maine has received funding for clean vehicles from the American Rescue Plan Act, Volkswagen’s settlement over its emissions scandal, the Infrastructure Investment and Jobs Act (IIJA), and various other state and local sources, such as bonds.

According to the study, Maine has allotted $8 million in funding from the Maine Jobs and Recovery Plan for electric vehicle charging infrastrastructure through fiscal year 2026. It also received $19 million in formula funding for charging infrastructure through fiscal year 2026 from the IIJA. Maine has received a further $3.75 million in electric vehicle rebates and $125 million in rebates for low-income individuals from a New England Clean Energy Connect stipulation.

But this falls belows the levels of funding Maine is expected to need in the coming years, according to the roadmap report.

The study also recommends several funding mechanisms to which the state could potentially turn.

These include pursuing federal competitive grant funding, a clean fuel standard, various types of gas and travel taxes, and fees on fuels and emissions.

A clean fuel standard (CFS), according to the study, would “regulate fuel providers.” The study cites programs run by other states that require a 10% reduction in the average carbon intensity of fuel providers over 10-years using a “tradeable credits system.”

The study says CFS programs are attractive because “they accelerate carbon reductions and mitigate program costs by directing funding towards cleaner fuels rather than toward a general fund,” but also notes that such a program does not align with the way Maine’s Department of Environmental Protection currently measures emissions. It further notes that Massachusetts has expressed interest in coordinating with other states to create a Northeast CFS program.

The study also recommends a tax of vehicles miles driven, noting that an Oregon pilot project showed the tax reduces miles traveled by 11% or 12% when compared to a gas tax assessed at the same level. But the study also notes that a tax on vehicle miles is “regressive and may require redistributing proceeds.”

Another possible funding mechanism, according to the study, is a gas tax, which the study notes is also regressive. Maine’s Constitution also limits the use of gas tax revenue to road maintenance and traffic law enforcement.

The study also suggests a carbon mechanism, which would assess a fee on fuels based on their carbon intensity. Like a gas and vehicle miles tax, the study notes this fee would be regressive and, unlike a gas tax, likely would not impact vehicle miles traveled.

The study’s final recommendation for possible funding mechanisms is a “feebate,” which would incentivize the purchase of low-emission vehicles by increasing the price of vehicles with an internal combustion engine and lowering the price of electric vehicles. The study notes this is a revenue-neutral policy, but while a feebate program is currently being tested in New York, it has not been tested elsewhere in the United States.

Neither GOPIF or the governor’s office returned a request for comment about which policy recommendations and funding mechanisms the administration is most interested in pursuing.

About Katherine Revello

Katherine Revello is a reporter for The Maine Wire. She has degrees in journalism and political science from the University of Maine. Her writing has appeared in Reason, The Washington Examiner, and various other publications. Got news tips? Contact Katherine at krevello@mainepolicy.org.

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