Clean Transportation Technologies Can Cut Emissions and Save Northeast Over $1 Trillion in Reduced Spending on Oil.

, policy analyst | October 10, 2018, 10:20 am EDT
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We can cut oil use, reduce climate and air pollution, lower costs for consumers, and strengthen our regional economy by investing in three proven strategies: increasing vehicle efficiency; transitioning to electric cars, buses, and trucks; and shifting to cleaner fuels. According to a new analysis for the Union of Concerned Scientists (UCS) by M.J. Bradley and Associates, the states in the Northeast and Mid-Atlantic region can:

  • Cut climate-damaging carbon dioxide (CO2) pollution from on-road transportation by 37 percent in 2030, relative to 1990 levels, and by 78 percent in 2050.
  • Reduce consumer spending on gasoline and diesel fuel by more than $125 billion by 2030 and more than $1 trillion by 2050.
  • Improve air quality, leading to more than $3 billion in cumulative avoided health impacts by 2030 and more than $30 billion by 2050.
  • Build a stronger and more reliable electric grid through smart charging, which can save ratepayers over $138 billion by 2050 and facilitate the shift to renewable electricity.
  • Save almost $25 billion in environmental damages region-wide by 2030 and almost $195 billion in 2050, by diminishing the risk of property damage from extreme climate events, preserving ecosystems, and avoiding climate-related changes in agricultural productivity, among other benefits.

Together with efforts to provide residents with better alternatives to driving through investments in public transportation, walking and biking infrastructure, and affordable housing near transit, these investments in clean vehicles and fuels can put the region on track to achieve the deep decarbonization of transportation. Furthermore, by directing investments toward the communities that need them the most, the region can make its transportation system more equitable.

Five policies to move the region forward

This analysis comes as states in the Northeast and Mid-Atlantic region consider new approaches to addressing the challenge of transportation pollution. Transportation is the largest source of pollution in the Northeast and Mid-Atlantic region. While the region has made progress in reducing pollution from power plants, pollution from cars, trucks, and buses have actually grown since 1990. The region will not meet our long-term climate goals without significant new policies to address transportation emissions.

Over the past year, Northeast and Mid-Atlantic states have been exploring new policy approaches to deal with this challenge. Agency officials committed last year to explore market-based policies to reduce transportation emissions. State agencies have conducted analysis, and held listening sessions that have brought hundreds of people together throughout the region to discuss strategies to improve transportation.We have an opportunity right now to move the region forward with a comprehensive strategy to reduce vehicle emissions and clean our transportation system.

We evaluated three proven technology pathways by which the Northeast and Mid-Atlantic states can accelerate the deployment of clean vehicles and clean fuels at a scale sufficient to meet their climate targets, calculating the investment needed to take these technologies to scale as well as the resulting financial, environmental, and health benefits. These pathways are: increasing fuel efficiency in conventional vehicles, promoting electric vehicles, and increasing production of clean biofuels.

We find that aggressive investment in clean transportation technologies can help the Northeast achieve deep decarbonization of the transportation sector. We also find that achieving this transformation will require sustained and significant efforts to overcome major obstacles to clean transportation technology, including the high upfront cost of the vehicles, the need for more charging infrastructure, and additional costs for low-carbon biofuels.

We recommend policy leaders in the Northeast take five major steps:

1. Accelerate vehicle emission standards

Vehicle efficiency and emissions standards, including federal CAFE rules as well as the regional Zero-Emission Vehicle program play a critical role in encouraging automaker investments in clean transportation technologies. The Trump administration proposes to freeze federal standards for vehicles and threatens to attack the authority of California and Northeast states to set higher emission standards. We propose instead that the Northeast and Mid-Atlantic states join California to fight proposed rollbacks at the federal level and to keep vehicle emissions standards and the ZEV program on track post-2025.

With steady progress on vehicle efficiency, a new passenger car in 2030 can operate on one-third less gasoline than a car sold today. Continuing to strengthen the efficiency of buses and trucks is also important, because, although heavy-duty vehicles make up less than 10 percent of all vehicles on US highways, they constitute more than 25 percent of the nation’s consumption of petroleum-based fuels.

2. Make electric vehicles work for everybody

Electric vehicles (EVs) represent the most promising technology ever developed to help reduce the consumption of petroleum-based fuels. EVs are increasingly available in all vehicle classes and models, from sedans to transit buses and delivery trucks. On today’s grid, electric cars produce less than half the emissions of a conventional vehicle (Reichmuth 2017). They are cheaper to fuel and cheaper to maintain, and their up-front costs continue to decline, though incentives remain important for moderate- and low-income drivers to share in these consumer benefits.

Our analysis finds that the widespread adoption of electric vehicles by 2050—which assumes the electrification of 95 percent of the fleet of transit buses, 90 percent of passenger cars, 70 percent of small trucks, and 30 percent of large trucks—is cost-effective. Achieving these growth rates will require sustained investments to incentivize switching to EVs and build charging infrastructure.

To make this happen, we encourage states to increase incentives for low- and moderate-income residents, to make these vehicles affordable to people of all income levels. We encourage states to achieve the rapid electrification of port fleets and transit buses, particularly in communities with high rates of air pollution caused by diesel fumes.  And we call on states and utilities in the region to build out the charging infrastructure that we will need to support widespread electrification, and to adopt policies that will encourage these vehicles to charge at the most efficient time of day for the grid.

3. Enact a clean fuel standard

Clean transportation must be powered by cleaner fuels, a shift that can be achieved by switching to clean electricity and blending low-carbon biofuels into gasoline and diesel. In our analysis, we found that clean fuels can achieve a 10 percent reduction in carbon emissions per unit of transportation fuel by 2030, and 30 percent by 2050. Setting a steadily declining standard for the average carbon intensity of transportation fuel, including electricity, biofuels, and petroleum-based fuels, would support the transition to both electric vehicles and low-carbon biofuels, while preventing the introduction of high-carbon sources of oil, such as fuel derived from Canadian tar sands.

4. Create a clean transportation investment fund.

Making clean transportation work for all communities and constituencies in the Northeast and Mid-Atlantic will require sustained, creative and strategic investments. A dedicated funding source for clean transportation investments could play a critical role in helping communities develop smart solutions to the challenge of reducing transportation emissions. Building on successful program models such as the Green Communities Act and Cleaner Greener Communities, a clean transportation fund could help engage local government and local coalitions around specific projects to improve transportation in their communities. Funds could also be used to engage key stakeholders, such as large fleet operators, auto dealers, transit agencies, universities and hospitals, and transportation network companies (TNCs).

A clean transportation fund would also provide the state with a way of dedicating revenues to the communities and constituencies that are most in need of investments in clean transportation. That includes environmental justice communities that face disproportionately high rates of asthma and air pollution, skyrocketing housing costs, and underinvestment in public transportation. And it also includes rural communities, who have the highest transportation costs and the greatest potential to save money from the transition to electric vehicles.

This fund could be supported through the same kind of funding mechanisms that are already working to improve efficiency and reduce consumer costs in the electric and gas sectors, such as a systems benefits charge or a cap and invest program covering transportation fuels.

5. Implement a market-based limit on transportation emissions.

Finally, Northeast and Mid-Atlantic states should place a declining limit on emissions from transportation fuels and enforce that limit through a market-based policy similar to what the region has achieved in the electric sector through the Regional Greenhouse Gas Initiative (or RGGI).

RGGI is a policy with a proven track record of reducing emissions while improving our economy and cutting costs for consumers. It works by setting an overall declining limit on emissions from power plants and requiring polluters to purchase allowances made available in regular auctions. By limiting the number of allowances available, the program creates mandatory emission reductions. At the same time, sales of allowances raise money, which can then be invested in renewable energy and energy efficiency technology. By investing smartly in energy efficiency, RGGI has lowered net costs for consumers.

Our analysis demonstrates that this policy model could achieve this same success in transportation. For example, if the Northeast were to implement a market-based program covering transportation fuels at auction prices equal to those of the Western Climate Initiative, that would raise almost $60 billion to invest in clean transportation solutions by 2030. That alone would be sufficient to cover the entire added cost of electric vehicle technology, and together with additional complementary policies, these clean transportation investments could save consumers over $145 billion by 2030 – with hundreds of billions in additional savings in the following decades.

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