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Incentive-Based Transition to Clean Fuels and Vehicles

UCD-ITS-RP-91-16

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Transportation energy issues are moving to the forefront of the public consciousness in the US and particularly California, and are gaining increasing attention from legislators and regulators. The three principal concerns motivating this interest in transportation energy are urban air quality, energy security, and global warming. Transportation fuels are a principal contributor to each of these. The transportation sector, mostly motor vehicles, contributes roughly half the urban air pollutants, about 30 percent of the carbon dioxide in the US, and consumes almost two thirds of the petroleum used in the country (and over three fourths in California).

From a rational technical perspective, the most compelling strategies for responding to these concerns are reduced motor vehicle use and increased vehicular efficiency. Politically, though, these strategies face large barriers.

While the efficiency of light duty vehicles has roughly doubled in the past 13 years—a major technological advance—further efficiency improvements of that magnitude are expected to be considerably more expensive. As a result, vehicle manufacturers have strongly resisted strengthening automobile efficiency standards much beyond the current 27.5 miles per gallon.

At the same time, consumers strongly resist additional fuel and vehicle taxes that are intended to discourage travel and encourage the purchase of more efficient vehicles. Moreover, they are not very responsive to price inducements. An analysis of a court-ordered program in the San Francisco Bay Area to reduce vehicular emissions indicates that providing free mass transit to riders with incomes of less than $25,000, doubling transit service outside center cities, imposing $1 daily parking surcharges in central cities, increasing bridge tolls by $2.00, and charging a 2-cents-per-mile surcharge on vehicles would each reduce hydrocarbon emissions by only 1 to 2.5 percent. It appears that a large fuel or use tax, much larger than anything under serious consideration, would be needed to gain even a modest change in behavior, an initiative few politicians are willing to propose.

Another strategy to reduce energy use and reduce vehicular emissions would be to encourage ride-sharing, to manage land use and land development in a more efficient and rational manner, and to coordinate expanded transit service with these land use changes. Alas, these changes are painfully slow.
Published in Energy and Environment in the 21st Century, ed. J.W. Tester, D.O. Wood, and N.A. Ferrari, Cambridge: MIT Press.