Transportation Efficiency & Climate Policy Take Several Steps Forward, One Step Back in D.C.

The Obama Administration announced a key decision to bring national vehicle standards for fuel efficiency and greenhouse gas emissions up to levels adopted in California, resolving a longstanding battle between the auto industry and state regulators. While the standards represent a quicker pace of improvement than the target of 35 miles per gallon by 2020 set in EISA 2007, auto manufacturers supported the move, saying that it provides the level of certainty and uniformity the industry needs. 

Other steps to address transportation sector greenhouse gas emissions, still in the early stages, appear in House climate bill. The bill directs the EPA to set greenhouse gas standards under the Clean Air Act for new heavy-duty vehicles by the end of 2010 and for new marine vessels, locomotives, and aircraft by the end of 2012. It also expands EPA’s SmartWay Transport program, which has helped much of the freight shipper and carrier community save fuel by adopting up-to-date technologies and practices. The “clean transportation” subtitle of the House bill focuses on plug-in electric drive vehicles, requiring utilities to plan charging infrastructure and grid integration, and establishing a large-scale deployment program for plug-in vehicles at DOE. The program would fund diverse applicants to purchase plug-in vehicles and establish infrastructure.

An important but underdeveloped piece of the House bill attempts to harness transportation planning as a tool to reduce greenhouse gas emissions. Projections of U.S. transportation energy use indicate that better vehicle efficiency and low-carbon fuels will not be sufficient to reach sectoral emissions reduction goals if travel demand grows at pre-recession rates, so managing demand will be a key ingredient of climate policy for the sector. The House bill requires states to set 4-, 10- and 20-year goals for transportation-related greenhouse gas reductions and to aim to stabilize and decrease emissions after a designated year. While it highlights the importance of a quantitative target for transportation sector emissions, the bill sets no national reduction goal for the sector, has no substantial enforcement, and dedicates no carbon revenues to get the job done.

On a faster track, vehicle scrappage proposals gained momentum in Washington earlier in the Spring when President Obama voiced his support for the concept. Unfortunately, unlike the scrappage bill introduced in January, which was designed to accelerate the modernization of the U.S. fleet to a more fuel-efficient one, recent proposals from the House of Representatives aim primarily to help Detroit clear its unsold inventory. Fuel economy requirements for vehicles to be purchased under the current House proposal are far too lax to warrant government incentives. See http://aceee.org/press/0905scrappage.htm and http://energycommerce.house.gov/Press_111/20090505/cashforclunkers.pdf.

As scrappage proposals are taken up by the Senate, it is important that a balance be restored between the stimulative and environmental aspects of the program. Spending some $4 billion in federal money on a program that runs counter to U.S. energy goals, and will saddle consumers with vehicles they may regret purchasing once higher gasoline prices return, is not sensible policy. The domestic auto industry needs help to produce the vehicles of the future, not to sell its mistakes of the past.