Gov. Charlie Baker signed up Bay State taxpayers for a controversial carbon tax initiative praised by climate activists and blasted by businesses and residents concerned an up to 9-cent hike per gallon of gas could hit their bottom line as the state struggles to rebound from the coronavirus pandemic.

The “trailblazing” multistate Transportation and Climate Initiative sets a goal to reduce motor vehicle pollution by at least 26% and generate over $1.8 billion for climate causes in Massachusetts by 2032, Gov. Charlie Baker said in a statement announcing the partnership on Monday.

The cap-and-invest program will set a cap on vehicle emissions and mandate fuel distributors to buy permits for the carbon dioxide they emit — a cost businesses say will be handed down to the drivers at the gas pump.

“The revenue raised by TCI will come from the residents and businesses of participating states, not the fuel companies where the fee is applied,” the New England Convenience Store Owners and Energy Marketers Association said in a statement.

The program will increase the cost of gas somewhere between 5 cents and “an absolute maximum” of 9 cents per gallon — lower than the 17-cent cap the state floated last year, Energy and Environmental Affairs Secretary Kathleen Theoharides said Monday.

In a joint statement, three trade groups including the National Association of Convenience Stores that represent 90% of retail fuel distributors said “the program will result in higher costs without any meaningful environmental benefit. These higher costs will be most acutely felt by the northeast region’s low-income communities.”

Supporters reject calling the program a tax, explaining the price tag comes with myriad benefits including improved public health and billions for green transportation.

Past studies have shown transportation accounts for more than 40% of Massachusetts’s greenhouse gas emissions and is the largest source of air pollution.

Chris Dempsey, director of transportation for Massachusetts, praised the agreement, saying it “will bring significant public health, environmental, and economic benefits to residents of Massachusetts.”

Baker at a news conference on Monday touted the program that he said will chart a path toward addressing climate change while rebuilding green transportation infrastructure.

“The price of doing nothing is very big,” the Republican governor said as he detailed the flooding, hurricanes and other climate-exacerbated weather events.

The agreement between Baker and Democratic governors from Connecticut, Rhode Island and Washington, D.C., includes just a quarter of the 12 states initially expected to participate. The other Northeast and Mid-Atlantic states expressed ongoing support for the program but did not sign on to the Memorandum of Understanding.

Baker said his “hope” is that more will come aboard later on.


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