Transportation and Climate Change: Real Solutions for Greenhouse Gas Mitigation

1. Transportation and Climate Change: Real Solutions for Greenhouse Gas Mitigation David L. Greene AASHTO Annual Meeting October 25, 2009 Palm Desert, California

2. WARNING:“The energy future which we are creating is unsustainable. If we continue as before, the energy supply to meet the needs of the world economy over the next twenty-five years is too vulnerable to failure arising from under-investment, environmental catastrophe or sudden supply interruption.”International Energy Agency, ParisWorld Energy Outlook 2006“The projected rise in emissions of greenhouse gases in the Reference Scenario puts us on a course of doubling the concentration of those gases in the atmosphere by the end of this century, entailing an eventual global average temperature increase of up to 6%.”International Energy Agency, ParisWorld Energy Outlook 2008

3. Climate change means change for transportation. • What is the GHG challenge for transportation? • Can we do it? • What do we know will work? • What are we not so sure about? • What does this mean for AASHTO and its members?

4. Society has three main energy goals. • Greenhouse gas mitigation • Stabilize atmospheric GHG concentrations at levels that will avoid dangerous climate change = 50% to 80% reduction by 2050. • North American motor vehicles emit more GHGs than any country in the world, except China (and the U.S.). • Sustainable energy • Energy resources enabling future generations to achieve a level of well being at least as good as our own • Energy for 2 billion cars, or more, by 2050! • Oil independence • Eliminate “restraining or directing influence of others” due to the economy’s (transportation system’s) dependence on oil. • Insure that oil dependence costs are less than 1% of GDP with 95% probability by 2030 = increased supply + decreased demand = 11 mmbd.

5. WHAT IS TRANSPORTATION’S “FAIR SHARE”?A C-price that would cut utilities C emissions in half by 2030 ($50/tCO2) would have a modest impact on transportation emissions ($0.50/gal.). (EIA, 2006).

6. Why is transportation different? • Interdependent with land use, spatial structure “markets”. • Governments’ huge role in infrastructure investment, regulation, operation. • Important market “imperfections” • Externalities • Oil market monopoly behavior • Energy efficiency and uncertainty/loss aversion bias • Technology and energy “lock in”

7. Changing petroleum dependence of the ICE transportation system is not easily done.

8. But, Greene & Schafer (Pew Center, 2003) concluded that a comprehensive, tailored set of strategies could cut U.S. transportation emissions in half by 2030. Sources of Transportation GHG Reductions, 2015 and 2030 60% Information and Education. Systems 50% Infrastructure Pricing 40% Carbon Cap Hydrogen Total < Sum of Components 30% Low-Carbon Fuels 20% Air Efficiency Heavy Duty Truck Effic. 10% LDV Efficiency 0% 2015 2030 Source: Greene and Schafer, Pew Center on Global Climate Change, May 2003.

9. Some policies we know will work. • Fuel economy standards. ✔ • Policies that increase the price of energy or carbon. • C tax or C cap-and-trade • Energy taxes • PATP insurance, etc. • Subsidies for clean vehicles or energy sources. ✓

10. CAFE standards decoupled vehicle travel and fuel use, today saving US motorists 75 billion gallons/year.

11. Other policies we are less sure of. • Land use, spatial structure and travel demand. • Some notable successes but isolated • NRC report says 1% to 11% by 2050 • Feebates • Low carbon fuels standard • Government sponsored RDD & D • ENERGY TRANSITION POLICIES

12. Where does AASHTO fit in? • Education, information, behavior. • Improving system efficiency. • Pricing transportation. • Contributing to land use and infrastructure solutions. • Assisting with the energy transition.

13. Transform the motor fuel tax to a user fee on transportation work. • PHYSICS: work is the application of force over a distance (moving something). • Transportation IS work. • PHYSICS: Energy is the ability to do work. • No energy, no work, no transportation. • Holding efficiency (work/energy input) constant, energy use is directly proportional to transportation work.

14. Inflation (3.7%/yr.) caused the greatest loss of real highway revenue, followed by fuel economy increases (2.7%/yr.), followed by alternative fuels (ethanol). National Surface Transportation Policy and Revenue Study Commission Briefing Paper 04-05, 2007.

15. Given our energy problems, a VMT tax is the wrong solution. • Convert the motor fuels tax to a transportation work user fee. Tax ALL transportation energy. • Index the tax rate to the average energy efficiency of vehicles on the road. • Index the tax rate to a relevant inflation index. • Encourage energy efficiency improvement, reducing GHG emissions. • Reduce VMT via energy cost per mile. • Congestion charging, too. • Carbon pricing, too.

16. Where does AASHTO fit in? • Education, information, behavior. • Improving system efficiency. • Pricing transportation. • Contributing to land use and infrastructure solutions. • Assisting with the energy transition.

17. Thank you.

18. A 2007 MIT study predicts MPG gains of 80-85% for model year 2030 vehicles via continuous improvement of conventional technology at a rate of 2-2.5%/year. Source: Kasseris & Heywood, SAE Technical Paper 2007-01-1605, April, 2007.

19. Unless our climate models are very wrong, we are about to boldly go where no human has gone before. Leaving the envelope of the Earth’s experience

20. Chances are, we won’t like it there. Can we avoid dangerous climate change?

21. Among energy end use sectors, transportation is the largest emitter of CO2, almost as large as electric power. U.S. transportation vehicles emit more than any nation in the world except China. Source: USDOE/EIA, Annual Energy Review 2008, table 12.2.

22. Highway vehicles, especially passenger cars and light trucks, account for most (78%) transportation C emissions. Source: USEPA, 2007, U.S. GHG Inventory, table 2-17.

23. The fuel economy standards for new passenger cars and light trucks drove improvement in light-duty fuel economy in the US.

24. According to FHWA data, on-road fleet average fuel economy followed the new vehicle improvements with a lag of about 10 years.

25. Efficiency improvement alone will not be enough. Battery Electric PHEV30 / Fuel Cell Today’s Technology Advanced Hybrid Advanced ICEs

26. To reduce transportaton GHG emissions by 70-80% by 2050, transportation must transition to low carbon electricity or hydrogen.