Future of Transportation discussion
stan...@gmail.com
The Future of Transportation
Over the last 20 years, passenger vehicles have become heavier and
have faster acceleration but have no improvement in fuel efficiency.
Can we drive less, in more efficient vehicles, and use fuels with
lower greenhouse gas emissions? Can we make this change quickly enough
to reduce total greenhouse gases from transportation by 60 - 80
percent by 2050? These were the questions discussed at the 11th
Biennial Conference on Transportation and Energy Policy at the
Asilomar Conference Center in Monterey, California. The Institute of
Transportation Studies at the University of California, Davis,
organized the conference. Dr. Dan Sperling, who is also a recently
appointed board member of the California Air Resources Board, heads
the institute. This article has been developed from the presentations
at the conference and the opinions of conference attendees from the
international, academic, governmental, non-governmental and business
communities. See "Asilomar 2007" for a complete list of presenters and
their presentations.
Overview
Transportation accounts for 25 percent of worldwide greenhouse gas
emissions, and demand for all modes of transportation is expected to
increase. Over the next 20 years air travel is expected to double and
airfreight is expected to triple. As manufacturing moves overseas
seeking cheaper labor, many of the goods travel back by air, using
significantly more fuel and producing more greenhouse gases than if
manufacturing remained in the United States.
Global wealth has increased three-and-a-half times over the last 35
years and more than 5 billion people want to get out of poverty. As
they do, they seek a higher standard of living, which means higher
energy consumption in general and greater use of motorized personal
transportation.
In 2006, Americans drove 3 trillion miles. The passenger fleet
averages 21 miles per gallon. "Merely" doubling fuel efficiency is not
enough to cause an actual reduction in fuel consumed, as current
estimates claim travel will increase to 7 trillion miles by 2035.
Studies of U.S. consumers show that fuel economy just nudges out
exterior paint color among factors that influence their decisions
about which new car to purchase! As the chart to the right shows,
weight and acceleration have increased significantly and drivers have
"shifted" to automatic transmissions while new vehicle efficiency has
flattened. In fact, the engine’s fuel efficiency has increased by 1.3
percent annually since 1981. That’s what it took to keep the higher
performance, heavier vehicles from dropping in fuel efficiency. If,
instead, acceleration and weight had been held constant, the fleet
average would be at 38 MPG today.
Price Signals Are Not Enough
Fuel is still relatively inexpensive. The inflation-adjusted average
fuel cost per mile increased from 14 cents in 1970 to a peak of 20
cents in 1981. It dropped to a low of 6 cents in 1998 and only
recently reached 13 cents, when gasoline surpassed $3 per gallon. That
might make one think fuel costs are about to become significant - but,
as the chart at the right shows, comparing fuels costs as a percentage
of disposable income shows gasoline would need to approach $6 per
gallon to match the peak of 1980.
The creation of a price on carbon or a cap-and-trade scheme for
transportation fuel would not change the costs very much. Carbon
futures in Europe closed at US$31 per metric ton on October 12. A
gallon of gasoline has 8.8 kilograms of CO2 (see EPA). If European
carbon fees were added to a gallon of gasoline, it would only increase
the cost by 27 cents.
While the fuel price impact on passenger vehicles is very small, the
impact on trucks is very different. A $30,000 passenger vehicle can be
expected to use $20,000 of fuel during its lifetime. A $100,000 truck
can be expected to use $400,000 of fuel. For trucking, fuel now costs
as much as the driver.
If we are to reduce greenhouse gas emissions from transportation, it
will take more than just higher prices. It will also require changes
to current public policies.
New Thinking - New Solutions
It will require new thinking and new solutions to reduce greenhouse
gases from transportation by 60 - 80 percent by 2050. It will take a
combination of three strategies working together:
* Reducing vehicle miles traveled (VMT)
* Improving vehicle fuel economy
* Reducing the greenhouse gas content in fuel
Discussions at Asilomar gave examples of public policies that are
working or have great promise. Their success all depend on politicians
being able to resist the NIMTO (Not-In-My-Term-of-Office) attitude and
show leadership.
Reducing Miles Traveled
Two examples stand out among policies that have reduced vehicle miles
traveled. The City of London reduced traffic through a congestion
charge combined with improvements in public transit. The City of
Portland reduced vehicle miles traveled through growth boundaries and
improved mass transit.
City of London
In February 2003, the City of London began charging ₤8 per day (US$16)
for vehicles traveling in the inner city between 7:00 am and 6:00 pm
on weekdays. There are no barriers or tollbooths. The charge is
enforced through cameras and supporting electronic systems. The fee is
heavily discounted for people who live within the city or have special
needs. The results to date (see Evers):
* 16 percent reduction in greenhouse gas emissions from
transportation within the inner city
* 20 percent reduction in traffic
* 30 percent reduction in congestion
* Reduction in traffic accidents
* Neutral effect on businesses
* Increased reliability and usage of buses
* Little change in the number of trips - just a shift in mode
Thanks to an integrated transportation system (road, bus, taxi, rail
and underground), funds collected from the congestion charge are spent
wherever they can achieve the greatest benefit. In effect, the people
driving are paying for the system improvements that benefit those who
take public transit or walk.
City of Portland
While per-capita VMT is increasing nationally at an average of 2.3
percent each year, in the Portland area it is declining thanks to
reliable transit service, smart land-use planning and outreach
programs. In the county of Multnomah, greenhouse gas emissions from
transportation have declined by 16 percent between 1990 and 2004 (see
Burkholder). Regional growth boundaries combined with integrated
transit planning have created higher density communities. This in turn
has created high property values and profits for developers within the
growth boundary.
While there is proof that cities can make a difference, federal
policies have yet to focus on reducing VMT. Even though there is some
evidence that VMT per capita is starting to stabilize in the U.S., we
don’t know for sure because half of U.S. states have stopped reporting
VMT. They are concerned they will lose federal transportation funding,
which is based on increased travel! Some transportation planners
believe VMT in 2035 could be trimmed to 5 trillion vehicle miles
(compared to the projected 7 trillion) and could, in fact, be held at
3 trillion if policies were changed to reward better urban design and
transit over new freeway construction.
Improving Vehicle Fuel Economy
A complex combination of consumer purchase decisions, auto companies’
estimates and government prerogative influences the setting of fuel
economy standards. It is technically possible to make more efficient
vehicles. The fundamental question is whether consumer buying criteria
will change to prioritize fuel economy.
Role of Government
Government requirements for fuel economy vary widely. Europe and Japan
have programs to reduce fuel consumption:
Region
Timeframe
Change
Improvement Rate
Europe
1995-2008
185 -> 140 gCO2/km
2.2 percent/year
Europe (proposed)
2008-2012
140 -> 130 gCO2/km
1.9 percent/year
Japan
2005-2016
13.6 -> 16.8 km/l
1.9 percent/year
The proposed European standard of 130 gCO2/km (grams CO2 equivalent
per kilometer) is equivalent to 48 mpg diesel fuel efficiency (many
European cars run on diesel) and 42 mpg gasoline fuel efficiency. The
Japanese requirement of 16.8 km/l is equivalent to 40 mpg. A fuel
efficiency provision in the current U.S. Senate energy bill requires
the U.S. fleet to reach an average of 35 mpg by 2020 (this would
require an average improvement of 4 percent/year). The California
Clean Cars Bill (Pavley, AB 1493) would result in a 30 percent
reduction in greenhouse gases from new vehicles by 2017 - assuming the
U.S. EPA grants a waiver to allow implementation to proceed. Other
states - totaling 40 percent of the U.S. markets - have also adopted
the Pavley regulations.
Should government provide the economic incentives to purchase more
efficient vehicles? Consumer studies have shown that buyers tend only
to consider the purchase price of the vehicle and not the cost to
operate the vehicle over its lifetime. In a recent study, only one
person in 15 had any idea what they spent in fuel per year. A proposal
in California (see Clean Car Discount) would provide a rebate of up to
$2,500 for the most fuel-efficient vehicles and a surcharge for the
least efficient. In principle, this would solve the fundamental
disconnect in consumer buying behavior and would make the more
efficient vehicles less expensive to buy.
Auto Companies & Technology
Significant opportunities exist to improve the fuel economy of
vehicles. These include:
* Improved gasoline spark-ignition engines
* Turbocharged gasoline spark-ignition engines
* Hybrids
* Diesel engines
* More efficient transmissions
* Reduced vehicle weight, drag and tire rolling resistance
* Electric vehicles and plug-in hybrids
* Hydrogen-powered vehicles
John Heywood, Director of the Sloan Automotive Laboratory at MIT, gave
the following assessment for 2035, based on an extensive computer
model of automobile technology and auto industry economics (note this
model includes turnover of the fleet and not just the fuel economy of
new cars sold in 2035):
* A plausible combination of reduced vehicle weight and more
efficient engines can halve fuel consumption by 2035. The cost of an
average car will increase between 13 percent and 20 percent, depending
on vehicle mix, especially the market share of hybrids. The owner will
recover this extra investment in 3-6 years due to reduced fuel costs.
Auto companies are pursuing both hybrid engines and plug-in hybrids.
Those technologies along with the opportunities outlined above will
provide most of the improvement in the coming years (see Ford and
Honda presentations). In the long term, the auto companies continue to
pursue hydrogen-fueled vehicles. For example, there are now over 100
demonstration hydrogen cars being tested in California (see Fuel Cell
Partnership). Producing hydrogen from renewable energy sources and
distributing and storing hydrogen presents a significant challenge -
with strong proponents and equally strong doubters.
Consumer behavior
Consumer behavior is the biggest dilemma in fuel economy. So far,
consumers have not had to do much to address the air quality or safety
problems associated with automobiles. The government established
performance standards and automobile companies complied, resulting in
cleaner and safer vehicles. Why should fuel economy be any different?
(The exception to this was air bags. Consumer pressure was needed to
finally make them required.)
If there is a national security and environmental imperative, then
government should establish standards. The photo below shows what was
in April 2001 a shocking price for gasoline - $1.72/gallon. In fact,
it isn’t the price but the suppliers that cause the greatest risks.
National oil companies (i.e. foreign government controlled), which
control almost 80 percent of all the oil reserves in the world, make
decisions on a political basis, not just on the basis of economic
interests (see Jaffe).
In-depth studies of U.S. car buyers have found no evidence of
economically rational decision-making about fuel economy (see Kurani,
or presentation by Greene). Out of 125 vehicle purchases, only in nine
of them did the consumer make comparisons of fuel economy before
making their choice, but none made any kind of quantitative assessment
of the value of fuel savings. The study observes, "policies like fuel
economy standards and rebates for purchasing more efficient vehicles
will be more effective than gasoline or carbon taxes because they
remove or reduce uncertainty about cost."
Reducing Greenhouse Gas Content in Fuel
Reducing the lifecycle greenhouse gas content of fuels can be
accomplished by displacing liquid petroleum fuels with fuels made from
other sources (see chart below for examples) including natural gas;
fuels made from biomass including crops such as corn, sugar and seeds
as well as cellulosic grasses, wood and plant waste; hydrogen; and
electricity, which can be made from a vast range of materials.
Policies which encourage the development of non-petroleum fuels need
to insure (1) that the fuel’s production is sustainable and (2) that
the lifecycle greenhouse gases from the production and consumption of
the fuel is increasingly lower than today’s gasoline and diesel.
Electricity is the wild card
Using electricity to power a plug-in hybrid, assuming the average
generating mix in the U.S., has been shown to result in considerably
lower emissions of greenhouse gases than the burning of gasoline
(NRDC). As the electric grid switches to lower greenhouse gas
generation, electric vehicles get cleaner (EPRI-NRDC)!
Fuel usage is divided among passenger vehicles, heavy-duty vehicles,
ships and aircraft. Passenger vehicles are the most likely to be able
to run on electricity due to shorter travel distances and less power
requirements. A possible outcome is a focus on electricity for
passenger vehicles while reserving oil for use by long-haul trucks and
airplanes, which require the greater power density and range of
hydrocarbon fuels.
The barrier for electricity has always been the availability of
lightweight batteries with sufficient storage capacity and durability.
One automotive researcher commented: "There are liars, damn liars and
battery suppliers." Batteries are steadily improving, but there is no
consensus on when batteries will have sufficient performance or low
enough cost for wide adoption and commercialization in vehicles.
Policy
California, the European Union and the U.S. EPA are all working on
standards for measuring the lifecycle greenhouse gas produced from
various fuels. An analysis done for the California Energy Commission
demonstrates it is practical to accurately model the lifecycle
emissions based on the specific raw energy source (referred to as the
"feedstock") and processing technique.
Lifecycle greenhouse gas emissions of various fuels as compared to
gasoline (gasoline = 100%) ordered from best to worst. Source:
California Energy Commission document CEC-600-2007-004-D
Once lifecycle greenhouse gas standards are available, the market
switch can occur through two means:
1. Low Carbon Fuel Standard (LCFS) - By establishing a gradually
diminishing lifecycle greenhouse gas content standard for fuels, fuel
suppliers will be required to invest in and distribute lower-carbon
fuels. This technology-forcing policy does not pick winners or losers,
as it is technology neutral. The California LCFS policy is expected to
require a 10 percent reduction in greenhouse gas intensity by 2020.
Adoption of the policy is expected before 2009.
2. Consumer preference and pricing - Consumers will switch to
alternative fuels if they are price-competitive, more convenient and/
or appeal to consumers based on their improved environmental and
national security values. For example, both natural gas and
electricity offer the convenience of home refueling. A mile traveled
using electricity is about one third the cost of a mile traveled using
gasoline. Tax shifting can also be used to accelerate adoption. For
example, a bill under consideration in California (AB 1190) would
reduce taxes for fuels that are at least 25 percent lower in
greenhouse gas emissions than gasoline.
Summary
Reducing greenhouse gases from transportation will require a
combination of:
* Reduced vehicle miles traveled
* Improved vehicle fuel economy
* Reduced greenhouse gas content in fuel
None of the changes needed are likely to happen from pricing or the
free market alone. They will depend on key policy changes, including:
* Federal funding preferences for projects intended to reduce VMT
over highway expansion
* City, regional and state investments in transit and land-use
planning for reduced VMT
* Federal standards for vehicle efficiency and greenhouse gas
reductions
* Financial incentives for consumers for purchasing more fuel
efficient vehicles
* Low-carbon fuel standards at state and national levels based on
lifecycle greenhouse gas measurements
We would like to thank Tony Bernhardt, Dan Sperling and Luke Tonachel
for contributing to and reviewing this article.