The Federal Transit Administration (FTA) has proposed controversial updates to its Capital Investment Grant (CIG) program by removing environmental criteria used to evaluate transit projects. The changes, which include eliminating the "social cost of carbon" calculation, aim to streamline the grant application process but have sparked debates over their potential impact on climate-conscious infrastructure goals.

Proposed Changes and Public Input

The FTA announced its proposed revisions in the Federal Register on August 19, 2025, and opened a public comment period that ended on September 2, 2025. Among the key changes is the removal of the vehicle miles traveled (VMT)-based methodology, which has been used since 2013 to estimate a project’s impact on air quality, greenhouse gas emissions, and other environmental factors.

"These proposed actions remove unnecessary regulatory requirements and provide the best support possible for locally driven transit projects", FTA Administrator Marc Molinaro said in a statement accompanying the announcement.

The agency argues that the VMT-based calculation adds unnecessary complexity to the evaluation process and that the changes would simplify grant applications while maintaining support for transit projects.

In parallel, the FTA issued another request for information on August 19, seeking feedback on broader updates to the program’s evaluation criteria. This solicitation focused on economic development, land use, population growth, transit-oriented development, and opportunity zones. Responses to this additional request were due by September 18, 2025.

Budget and Context

The CIG program, supported by the Infrastructure Investment and Jobs Act, receives $3 billion annually through the 2026 fiscal year, along with $1.6 billion in advanced appropriations each year. For the upcoming 2026 fiscal year, the FTA has requested $3.8 billion of the available $4.6 billion to fund the CIG program and the Expedited Project Delivery pilot program. These programs primarily fund public transit, commuter rail, light rail, streetcars, and bus rapid transit projects.

Concerns and Reactions

While the FTA’s proposed changes are intended to ease the regulatory burden on applicants, some stakeholders have voiced concerns about the potential consequences. "The VMT methodology allows for empirical modeling of induced travel, mode shift, and long-term sustainability impacts", said commenter Joseph Wilson. "Eliminating it may reduce the ability to compare projects based on their environmental performance, which could undermine climate-conscious infrastructure goals."

The FTA’s decision to remove the "social cost of carbon" has been criticized by some as a step away from addressing the environmental impacts of transit projects. However, the agency has framed the changes as a necessary move to reduce red tape and encourage local innovation in transit planning.

Next Steps

As public comments are reviewed, the FTA’s final decision on the policy changes could significantly reshape how transit projects are evaluated and funded under the CIG program. Whether these revisions will strike the right balance between regulatory efficiency and sustainable infrastructure remains to be seen.

The FTA’s proposed updates highlight the ongoing tension between streamlining federal processes and maintaining accountability for climate-related goals in infrastructure development. Stakeholders across the public and private sectors will be closely monitoring the outcome of these policy changes as the FTA moves forward.

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