The Top 5: Just Four Policies Can Reduce U.S. Transport Emissions 45%

10.26.17 | Blog | By:

Happy Thursday friends!  Here’s my monthly take on the five most interesting developments in future fuels and vehicles trends in October. Items I selected this month run include  policies that can reduce transport emissions, including a low carbon fuels standard (LCFS); EVs and fuel economy standards; a landmark study on air pollution and what it means for fuels and vehicles; legislation that will be introduced in California in January 2018 to ban the internal combustion engine vehicle (ICEV); and, how ride-hailing is increasing vehicle miles traveled, congestion and emissions.

1. Forbes: Four Policies Can Reduce U.S. Transport Emissions 45%, Cut Oil Use 23%, Save 5,300 Lives Per Year — Well, what are they? According to Energy Innovation, they are:

  • Fuel economy standards for five vehicle types light-duty on-road vehicles (LDVs), heavy-duty on-road vehicles (HDVs, aircraft, rail, and ships)
  • Transportation demand management (TDM) policies for passengers and for freight. For passengers, this represents measures that reduce passenger car use such as zoning for higher density along public transit corridors, zoning for mixed-use development, and improved public transit systems. For freight, it represents truck-to-rail mode shifting and improved logistics.
  • A feebate, which is a fee levied on the sale of inefficient passenger LDVs used to fund a rebate to the buyers of efficient passenger LDVs.
  • A LCFS.

Energy Innovation notes these policies are applied on top of a business as usual (BAU) case that includes strong growth in EV penetration (65% of new LDV sales by 2050).  The relative contributions of each policy to GHG abatement in transport are shown in the figure below.

Source: Energy Innovation, 2017

Energy Innovation notes that the LCFS and fuel economy standards as and when more of the passenger car fleet is composed of EVs.

2. The Wall Street Journal: Warren Buffett Bets on the Fossil-Fuel Highway (Subscription Required) — ” The sage of Omaha knows a policy bubble when he sees it—and electric vehicles are a prime case.” This op-ed from editorial page writer (and major EV skeptic) Holman Jenkins discusses Buffet’s acquisition of truck-stop chain Pilot Flying J. Jenkins takes Bloomberg New Energy Finance to task for its bullish projections on EV penetration, noting: “Little mentioned was the fine print: Its forecast depends on regulators being willing to pile on enough taxes and mandates to cancel out the superior cost-effectiveness of gas-powered cars.” It remains to be seen whether other countries follow California, Quebec and China into Zero Emission Vehicle mandates. But I think they may not have to. I believe it will be tightening fuel economy standards that will help drive the EV market potentially, not necessarily mandates. Those standards will help drive up the costs of ICEVs as the cost of EVs begin to decline as battery technology costs decline.

3. The Lancet: Pollution Kills 9 Million a Year — According to a two-year study published in The Lancet, pollution is the largest environmental cause of disease and premature death in the world today, causing an estimated 9 million premature deaths in 2015—16% of all deaths worldwide. And that especially includes air pollution as motor vehicles as a cause. Read more about it here

4. The Sacramento Bee: Capitol Alert: California Lawmaker Wants to Ban Gas Car Sales After 2040 — As I said before, you don’t think California is about to be left behind in the global car ban movement, do you? No way. According to the Bee, when the Legislature returns in January, Assemblyman Phil Ting, a Democrat from San Francisco, plans to introduce a bill that would ban the sale of new cars powered by internal-combustion engines after 2040 (similar to the UK and France). “The market is moving this way. The entire world is moving this way. At some point you need to set a goal and put a line in the sand,” Ting told the Bee.

Meantime, check out this op-ed from the Wall Street Journal on the “fatal flaw” California’s Cap and Trade Program. What is it? Leakage. “Yet the law’s designers still have not confronted the central conundrum of trying to impose a state or regional climate policy: As firms compete for a limited supply of carbon permits, they are put at a disadvantage to out-of-state rivals. Production flees the state, taking jobs and tax revenues with it. Emissions ‘leak’ outside California’s cap to other jurisdictions.”

5. U.C. Davis Institute of Transportation Studies: Disruptive Transportation: The Adoption, Utilization, and Impacts of Ride-Hailing in the United States — According to the study, as ride-hailing has exploded in popularity, it’s caused a slight decrease in car ownership — but has also reduced use of public transit, biking and walking. The result is a likely increase in both traffic and the number of miles traveled in a vehicle. A researcher told SF Gate, “Although we found that ride-hailing can be complementary to transit and reduce vehicle ownership for a small portion of individuals, we found that (overall) these services currently facilitate a shift away from more sustainable modes towards low occupancy vehicles in major cities.” Ride hailing is not a panacea, in other words.

Honorable Mention

University of Michigan Energy Survey: Carbon Taxes and the Affordability of Gasoline — As I’ve highlighted before, there has been renewed interest this year in a carbon tax in the U.S. and coming from some Republicans, no less. This analysis looks at how a modest carbon tax of $40 per ton, similar to recent proposals, would impact gasoline prices, finding that such a tax would add 36¢ to the price of a gallon of gasoline. Relative to a price of $2.80 per gallon, it would increase to 7.5% the number of consumers who feel that gasoline is unaffordable. The analysis would that a carbon tax would push 14% of low-income,  7% of middle-income and 4% of high-income  consumers into the zone where they feel that they  would need to make changes in how they travel. However, gasoline would remain affordable for over 90% of Americans. Targeted relief for low-income households could  address the concerns of consumers most sensitive to higher fuel prices.

 

Tammy Klein is a consultant and strategic advisor providing market and policy intelligence and analysis on transportation fuels to the auto and oil industries, governments, and NGOs. She writes and advises on petroleum fuels, biofuels, alternative fuels, automotive fuels, and fuels policy.