Meeting and Defeating Transportation and Climate Change Challenges

Falling gasoline prices and rising vehicle miles traveled (VMT) over the past 12 months have stimulated discussion about what these recent trends foretell about economic impacts, life-style changes, and American travel patterns. There has, however, been less attention directed to the possible environmental impacts of these trends and what they might mean about global climate change.

Several years ago it was acknowledged that significant reductions in American greenhouse gas (GHG) emissions depended on fundamental changes in the transportation sector in the United States. Although in recent years there has been growth in the use of alternative fuels and VMT per capita remains lower than its 2004 peak, according to the United States Environmental Protection Agency (EPA), as of 2013, the transportation sector accounted for 27 percent of total U.S. GHG emissions. This represented the second largest economic sector behind electric power (which then accounted for 31 percent of U.S. GHG emissions).

Beyond its contributions to GHG emissions, transportation remains the only significant sector of the American economy that is almost totally dependent on liquid petroleum (specifically, liquid petroleum accounted for 92 percent of the transportation sector’s total energy sources).

While these numbers have not appreciably changed in the last few years, for the first time in several decades there is the promise and real potential that the contributions of America’s transportation sector to the nation’s overall GHG emissions can and will be sharply reduced. These trends are primarily related first, to the implementation of much more rigorous fuel efficiency through recent changes in the Corporate Average Fuel Economy (CAFE) standards; and, second, to reductions in VMT per capita, as the majority of GHG emissions derive from passenger vehicles.

At the United Nations Climate Change Conference in Paris last fall the nations of the world, including the United States, made non-binding pledges to mitigate GHG emissions, in order to limit the increase in global warming to 1.5 degrees Celsius. For the United States, in particular, most of the focus (and a great portion of the reductions to which we aspire) relates to GHG emissions in the energy sector. Efforts would focus on power plants (the largest source of GHG emissions in the United States) and on reducing their GHG emissions by 30 percent by 2030. While EPA has the legal responsibility to promulgate the new regulations, they still must survive challenges in the courts.

Despite the hope for progress in the American energy sector, however, it is critical that GHG emissions and petroleum use be reduced further in transportation, if America’s climate change pledges are to be met. The recent dramatic reductions in the price of gasoline and the increases in VMT, however, make one wonder, if this will be possible.

It is difficult to answer questions about future VMT trends because we really do not know why total American VMT stagnated, and then fell, for several years. Some attribute this decline to changing habits of younger Americans, the so-called “Millennial Generation.” The indications of less automobile travel by this cohort are consistent with other indicators, such as the apparent delays in many young people’s purchasing cars and in obtaining drivers’ licenses in recent years. For example, a study has found that the percentage of young people with drivers’ licenses has dropped from 87.3 percent in 1983 to 69.5 percent in 2010.

The decline of automobile use and ownership among younger generations dovetails with the growing number of young professionals in urban areas in the past decade. Today’s young people, many of whom live in urban centers, don’t seem to need or want cars. Instead, increasingly, they use Uber or Lyft or other shared services to meet their mobility needs. The concepts of travel and mobility have changed for many urban young professionals, in terms of their preferred life styles. These circumstances would be confirmed by a continuing decline in per capita VMT, even as total VMT has begun to rise again.

Another, and perhaps more plausible, explanation of declining VMT started in 2008 with the financial crisis and the resulting economic recession and high unemployment. On this theory, young people did not purchase, own, and drive cars as much as earlier generations because they were unemployed or under-employed, were living with their parents, and had few financial resources for travel and entertainment. To some degree these circumstances persisted even after the American economy began to recover and the unemployment rate fell because of stagnant wage growth and increasing income inequality.

If this latter theory is the more likely explanation, as the economy improves, further total VMT growth may be expected, whatever the level of fuel prices. However, when combined with recent dramatic decreases in oil prices, one can anticipate that market forces will stimulate greater use of gasoline in the transportation sector. Lower gas prices are likely to cause American consumers to choose larger automobiles, SUVs, and light trucks in their vehicle purchasing decisions and to drive longer distances in such vehicles.

If broader economic trends and the realities of the market place frustrate efforts to reduce GHG emissions from the transportation sector and put at risk the capacity of the United States to meet its Paris climate change pledges, American public policy will become even more dependent upon the regulatory process to achieve reduced use of gasoline to meet environmental goals.

While I am not generally a proponent of command-and-control regulations, in the area of fuel efficiency and air quality, the regulatory regime, when aggressively implemented, has been remarkably effective, in achieving broadly supported public purposes. The federal fuel efficiency standards, first adopted in the 1970s but then barely raised for three decades, seem to be broadly supported today by the American public, even in a politically-charged environment filled with rhetoric about rolling-back regulations and reducing the size of government.

Under the Administration of George W. Bush the federal government began again to increase and to reform the CAFE standards and to begin the process of applying fuel efficiency requirements to heavier-duty vehicles. This process greatly accelerated under the Obama Administration. Light-duty vehicles will have to achieve approximately 35 miles per gallon (mpg) by 2016, and by 2025 that requirement will reach 54 mpg.

Despite the protests by the automobile industry that they could not meet ever-increasing fuel efficiency standards, the experience in recent years of accelerating mpg requirements shows that the technological innovations to improve the internal combustion engine, to produce and sell hybrid gasoline and electric power trains, and to make other improvements in style, design, and materials in the automobile are possible and affordable, provided that these innovations are used for efficiency, rather than power, improvements.

There seems little reason that CAFE requirements could not be increased to 75 mpg or even higher in the next few years. Even without imagining an American automobile fleet that is totally electric and/or based on other alternative fuels, the promise of current knowledge and of available invention and engineering seems to make such a regulatory requirement technologically achievable.

No less important, past experience suggests that public support for ever-higher mpg and CAFE standards can be earned and sustained. America’s ability to meet its climate change pledges and to sustain essential progress may depend on our willingness to pursue such a course.

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