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Reason Foundation

Reducing Greenhouse Gas Emissions From Automobiles

Examining technological and compact development strategies to reduce greenhouse gas emissions

Wendell Cox and Adrian Moore
November 29, 2011

Federal, state and local governments are considering or have implemented policies that seek to reduce human emissions of greenhouse gases (GHGs).

This study seeks to assess the relative merits of specific policies intended to reduce GHGs from automobiles. (It does not consider whether or not reductions in GHGs are actually desirable.) Current policies and proposals for reducing GHGs from autos would require implementation of strong land use restrictions (compact development). Technological alternatives for reducing GHG emissions have received considerably less attention.

We estimated the costs of a range of such policies, beginning with government documents and reports prepared in cooperation with organizations advocating behavioral policies. Behavioral strategy costs and the costs of technological strategies were evaluated against the upper limit on acceptable costs for GHG emissions reductions as estimated by the Intergovernmental Panel on Climate Change. (This upper limit, $50/ton of carbon dioxide equivalent in 2020–2030, is used because of its source, not because we endorse that value).

GHG emission reduction goals cannot be realistically achieved by applying “fair share” quotas to economic sectors. Depending on the availability of strategies requiring expenditures less than $50 per ton, a sector might account for more or less of the eventual reduction in GHG emissions than its share of total emissions. A “fair share” approach would require some unnecessarily expensive strategies, while neglecting some less costly strategies. As an example, IPCC research indicates that transportation represents 23% of global emissions, yet estimates the economic potential for GHG reduction in transport to be less than one-half that figure (10% or less).

Research by McKinsey & Company and The Conference Board found that substantial GHG emission reductions can be accomplished cost-effectively while “maintaining comparable levels of consumer utility” (an economic term denoting quality of life). This means “no change in thermostat settings or appliance use, no downsizing of vehicles, home or commercial space and traveling the same mileage” and “no shift to denser urban housing.”

Sustainability is often narrowly defined as pertaining to the environment, such as GHG reduction. However, environmental sustainability also depends upon achieving other dimensions of sustainability, including financial, economic and political.

Behavioral Strategies (Compact Development)

Proponents of this approach argue that GHG reduction will require radical changes in lifestyles. Their solution is behavioral strategies (compact development) to increase urban densities and change the way people travel. The two most prominent reports on this approach (Driving and the Built Environment and Moving Cooler) predict that compact development could reduce GHGs from autos by between 1% and 9% between 2005 and 2050. Driving and the Built Environment acknowledges that there will still be significant increases in overall driving (vehicle miles traveled or VMT).

Compact development raises various issues:

Reasonable Expectations: Projected results from the most aggressive scenarios appear to be implausible based upon reservations stated in Driving and the Built Environment and broader criticisms of Moving Cooler. It is suggested that a range of 1% to 5% is more realistic for the maximum GHG emissions reductions from autos between 2005 and 2050 under compact development policies.

Traffic Congestion and Compact Development: Even this modest level of GHG reduction could be further diminished by the “GHG Traffic Congestion Penalty.” The higher densities required under compact development would cause greater local traffic congestion. As traffic slows and moves more erratically, the GHG reductions from less driving are diminished. Further traffic congestion retards the quality of life of households and imposes economic costs on metropolitan areas.

Housing Affordability and Compact Development: Compact development is associated with higher housing prices. This is burdensome to lower income households, which are disproportionately minority. Assessing the impact of compact development on house prices, a Latino (Hispanic) think tank noted “an increase is always the result.” The increased household expenditures for mortgage interest and rents alone could amount to nearly $20,000 per GHG ton annually, nearly 400 times the IPCC $50 maximum expenditure by 2050 (2010$). This loss of housing affordability would represent a huge transfer of wealth from lower and middle income households.

Infrastructure Costs and Compact Development: Despite theoretical claims that suburban infrastructure is more expensive than in more dense areas, data for metropolitan areas indicates no such premium.

Higher Densities: Compact development would require unprecedented increases in density, well beyond those envisioned by current compact development policies. This densification could require aggressive use of eminent domain and could be prevented by neighborhood resistance and public reaction.

Compact development is incapable of reducing GHG emissions within the IPCC $50 maximum expenditure. Compact development’s higher than necessary expenditures could reduce economic growth, increase congestion costs, and result in public resistance and greater social imbalances. Because of its detrimental impact on financial, economic and political sustainability, compact development is unsustainable as a strategy for reducing GHG emissions from autos.

Facilitative Strategies

The alternate view is that technology solutions can achieve sufficient GHG reduction from autos.These facilitative strategies would alter the underlying GHG intensity of how people live and travel without requiring major changes in behavior or the standard of living.

There is substantial potential for reducing GHGs:

The trend of present fuel efficiency improvements, if they can be continued beyond 2030, would produce auto-related GHG reductions of 18% by 2050 (from 2005). And if VMT increases at a lower rate, as some experts now project, a 33% reduction could be achieved.

If the average auto were to achieve the best current hybrid fuel economy by 2040, GHGs would fall 55% between 2005 and 2050.

Emerging fuel technologies also offer promise. Hydrogen fuel cells and zero-emission cars (principally plug-in electric vehicles), if paired with electricity from hydro-power, could help reduce GHGs from autos by 2050.

Various issues are examined with respect to facilitative strategies:

GHG Reduction and VMT Increases: Department of Energy projections indicate that auto GHG emissions will decline, even though total driving will continue to increase.

Maximum Expenditures: Facilitative strategies that would require more than the $50 IPCC maximum expenditure are rejected.

Quality of Life: Current technologies can be implemented without retarding Americans’ quality of life. However, some of the more advanced technology strategies may reduce quality  of life by requiring smaller autos. Under either scenario, people could continue to live in  houses of the same size at affordable prices, to travel the same mileage, and there would be no necessity for a shift to denser urban housing. Research associates greater economic growth with geographic mobility, which is preserved even under the more advanced technologies.

Relying on Technology: Based upon the current availability of far more fuel-efficient technologies, such as hybrid vehicles, it is plausible to assume continued GHG reductions after  2030. The emerging strategies could accelerate the improvement. Of course, as noted above,  any projection is uncertain.

New technologies have the potential to achieve substantial GHG emission reductions at costs within the $50 IPCC maximum expenditure per ton. This could be accomplished while preserving quality of life. As a result, public acceptance is more likely.

Conclusions and Recommendations

Generally, existing and likely future technologies have a far greater potential to reduce GHG emissions than compact development. Based upon Driving and the Built Environment and Moving Cooler, compact development provides little possibility of achieving a reduction of more than 5% in auto GHGs by 2050.

On the other hand, wider application of existing technologies could produce GHG emission reductions of up to 54% by 2050 with current hybrid technology. GHG reductions from new technologies, such as electric cars, could be even greater. These technologies are potentially sustainable financially, economically and politically, and thus environmentally. By contrast, imposing compact development would be enormously expensive, is likely to reduce economic growth substantially, and could stifle opportunity for lower income households, which are disproportionately African-American and Hispanic. These factors render compact development unsustainable financially, economically and politically, and thus environmentally.

As governments consider policies intended to reduce GHG emissions from autos:

· Compact development strategies should be neither mandated nor encouraged.

· Technology strategies should receive priority.

At the same time, any such policies other than removing government-imposed barriers to new technology development and adoption should be implemented with great caution.


Adrian Moore is Vice President, Policy

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