Impacts of Transportation Policies on Greenhouse Gas Emissions in U.S. Regions

Comparing the cost and effectiveness transportation-related policies aimed at reducing CO2 emissions

This report compares the cost and effectiveness of improved fuel economy, transportation system improvements and shifts in travel behavior on the reduction of man-made CO2 emissions in urban areas. We study in detail 48 major U.S. regions containing 41% of the U.S. population, 60% of transit use and 90% of congestion delay. This report quantifies how much CO2 cars, light trucks and commercial trucks currently emit (base year 2005) in each region, how much CO2 would have increased with prior CAFE standards, how much the new CAFE standards will reduce, and how much CO2 might be reduced by other commonly suggested policies. These policies include the new fuel economy standards, additional smaller-car sales, signal timing and speed controls, capacity increases, high-occupancy or priced lanes, travel reduction polices, transit use increases, carpooling, telecommuting and walking to work. We then assess the cost versus effectiveness of each policy for each region and recommend detailed regional strategies.

Interest in man-made CO2 has sharply increased in the last several decades. A small portion of global CO2 emissions is a byproduct of fossil fuel combustion from human activity. Most such combustion occurs in the production of energy, and about a third of this involves transportation. CO2 reduction policy options in the transportation sector primarily focus on the reduction of manmade combustion through the reduction of the underlying activity (i.e., travel), or through reducing the amount of CO2 in vehicle exhaust by mandating increased vehicle fuel efficiency.

New Corporate Average Fuel Economy (CAFE) standards setting an overall new-car/truck efficiency of 35 MPG by 2020 have recently been put in place. The Supreme Court has ruled that even though CO2 is not a “listed pollutant,” the EPA must provide standards for its management. The U.S. transportation community is also increasing attention to the issue. The Transportation Research Board, a national transportation research organization, made “climate change” its theme for its 2009 meeting. At the state and local level, according to a recent survey, 36 states and several hundred local governments have “signed on to aggressive plans to cut back greenhouse gas emissions from electric energy generation, industry, and transportation.” California has recently passed legislation calling for a reduction in greenhouse gas emissions to 1990 levels by 2020.

This interest in emission-reduction goals has materialized without much region-specific research or economic assessment. A few regions have conducted substantial analyses. However, baseline estimates of CO2 in specific urban regions, and the impact of plans to reduce it, have not yet been developed. Many factors affect transportation’s contribution to greenhouse gas levels in various urban regions, and because each urban area is unique in its transportation needs and behavior and the costs and effectiveness of various emission-reduction policies, a one-size-fits-all plan is not appropriate. In order to balance achievable impact with affordable costs, each region must tailor its policies. Region-specific data would be very helpful to local governments and transportation communities in preparing sensible plans to reduce emissions most cost-efficiently.

This study compares the cost-effectiveness of attempting to reduce CO2 emissions through specific transportation systems and behavior policies with the likely impact of new federal CAFE standards alone in 48 major U.S. urbanized areas. The major findings of this study are:

1. U.S. man-made carbon dioxide emissions constitute about 21% of global CO2 emissions.

2. U.S. surface transportation emissions constitute about 6% of global CO2 emissions.

3. New CAFE standards will result in about a 31% reduction in U.S. surface transportationrelated  CO2 emissions by 2030 (1.9% of world CO2 emissions), compared with prior standards,  at a cost of about $52/ton reduced.

4. Regions vary widely in the circumstances that affect their ability to reduce CO2 emissions. If a policy of reducing carbon dioxide emissions is seen as desirable, it is clear that such emissions reductions should not be imposed uniformly on all regions or sectors. Instead, it would make sense to encourage emissions reduction in the most efficient way possible.

5. If consumers shift sharply to smaller vehicles, an additional reduction of about 2.7% of U.S.  transportation emissions (0.16% of global CO2 emissions) is achievable, even with conventional fuels. Although some shift has been noticed recently, it is not guaranteed to continue and may lag if gasoline prices remain relatively low.

6. Improved signalizations for arterials could yield as much as 2.3% additional savings (0.14% of global CO2 emissions). The nominal cost of this would be $112 per ton of CO2 removed.  However, there are substantial other benefits to improved signalization, making the reduction in CO2 essentially an ancillary benefit.

7. Fifty-five-mph speed limits (caps on high freeway speeds) could reduce as much as 3.0% of CO2 emissions (0.18% of global CO2 emissions), at a very low cost of $0.13 per ton reduced. However speed caps have very large societal costs in extra travel time.

8. Major road capacity improvements could achieve as much as a 4.1% reduction in CO2 emissions (0.25% of global CO2 emissions), but at costs averaging $3,995 per ton reduced.  However, there are other reasons for improving capacity (travel time savings, reduced accidents, lower operating costs, greater choices of jobs/housing/retail and economic benefits).  The most cost-effective sites are likely to be major bottlenecks and turn lane capacity actions on the minor arterials and collector systems.

9. A 50% increase in work-at-home shares is reducing considerable CO2 emissions already and has the potential to decrease an additional 0.5% of CO2 emissions (0.03% of global CO2 emissions) at about $3,496 per ton reduced.

10. A doubling of HOV lane and stand alone HOT lane mileage could reduce about 0.64% of CO2 emissions (0.04% of global emissions) but at quite a high price of $2,462 per ton reduced, assuming that new lanes would be needed. This application is probably limited to larger regions.

11. A 25% increase in carpooling-to-work shares could reduce about 0.75% of CO2 (0.05% of global CO2 emissions) but also at a relatively high cost of $2,776 per ton reduced, assuming that the increase is in the form of vanpool services. However, carpooling is declining nationally, and so this policy’s applicability is probably limited to regions that have a strong history of ridesharing.

12. An across-the-board 5% reduction in personal travel could reduce about 4.0% of CO2 (0.24% of global CO2 emissions), but the gasoline price needed to achieve this reduction is in the range of $5/gallon, about $3,923 per ton of CO2 reduced.

13. Transit service improvements necessary to achieve a 50% increase in transit work shares could reduce about 1.1% of CO2 emissions (0.07% of global CO2 emissions) but also at a high price
at $4,257 per ton reduced.

14. A 50% increase in walk-to-work shares would yield about a 0.35% reduction in CO2 (0.02% of global CO2 emissions), but its implementation is dependent on changing land use patterns, with costs believed to be very high.

In short, policies aimed at reducing transportation-related CO2 emissions by improving overall fleet fuel efficiency are likely to have the greatest relative and most cost-effective impact. Overall, technological improvements to vehicles resulting in higher fuel efficiency, along with traffic signal timing and speed harmonization, hold out the most hope for significant reductions in future CO2 emissions.

Next in line are policies aimed at improving the efficiency of the transportation system, particularly signal timing and coordination, and speed harmonization. Next in cost-effectiveness are policies aimed at changing commuting behavior, particularly work-at-home policies. Likely to be less effective, both absolutely and relatively, are major capacity increases, more HOV or standalone HOT lanes, transit shift policies and carpooling, although in some areas they can provide modest savings. However, none of the reviewed policies alone, including the new CAFE standards, is likely to reduce global CO2 emissions by more than about 2%, and most policies would have less than a 0.2% impact on global CO2 emissions. This means that even if implemented across many U.S. regions in a concerted fashion, the policies reviewed here would not likely have a significant effect on global CO2 emissions. And at the regional level they may prove very difficult to implement and may not even reduce CO2 emissions significantly.

Given the high relative cost of many policies, therefore, policy makers should not rush to implement them.

National Strategy

To the extent that CO2 reduction in the transportation sector is a goal, the new CAFE standards largely achieves it. Encouraging the purchase of more fuel efficient vehicles is also effective. But both policies are not without significant consequences other than CO2 reductions, some of them negative. 

Most of the strategies being widely discussed in transportation plans—transit increases, VMT reductions, carpooling, pricing, making cities denser and more walk-friendly—would have little measureable effect on regional, national or certainly global CO2 emissions, even if implemented widely at very high cost. Several other policies—improving CAFE standards even further than presently mandated, encouraging small car purchasing—are beginning to be discussed. Still others—signalization improvements, telecommuting—are being largely ignored even though they have proven effective. 

National policy should not encourage regions to implement strategies that are not cost-effective. There is currently significant uncertainty of the potential or cost-effectiveness of various alternative fuels, particularly whether any fuel will expand beyond its current applications and become national in scope. We believe that prudent policy regarding alternative fuels is to focus now on preparing for the mid-term, 15 to 30 years in the future, by concentrating on the reductions achievable with conventional fuels, and letting technologies evolve further. It is simply too risky to determine the impact of individual fuel types at this time. The nation should agree on and put in place mechanisms for measuring (not just estimating) CO2 emissions from the transportation sector, perhaps by region and/or mode. These will be necessary to determine progress over time and to set baselines when and if further actions become necessary. The nation should resist the temptation to mandate CO2 reduction plans as part of long-range transportation planning. 

We should not mandate CO2 reduction targets for regions and states that are based on behavioral shifts. Such activity is likely to be unnecessary, wasteful in staff effort and lead to unrealistic expectations. Instead, national policy should be to encourage study, analysis and quantification of CO2 emissions in regions, but not mandate actions to deal with them. This is because fleet turnover is likely to significantly mitigate and possibly even reverse the growth of CO2 emissions in most regions. 

What Should Regions Do? 

Even though the new CAFE standards and possibly more small car sales will reduce the rate of increase in transportation related CO2 emissions, this strategy will not be enough to achieve significant reductions in CO2 emissions for some fast-growing regions. Most regions would benefit significantly from major attention to signalization improvements and limited applications of speed harmonization. These policies have significant benefits in terms of saving time for drivers and in the delivery of goods, and while they are not necessarily very cost effective ways of reducing CO2 emissions, they are less expensive than some other proposed policies. Speed limits are not recommended because of their enforcement problems and large societal costs. Other policies such as telecommuting, HOV or HOT lanes, carpooling, capacity improvements, VMT reductions and transit service improvements are likely to be even less cost-effective CO2 emission reducers, although of course there are other reasons for doing some of them. Some slowgrowing regions may be able to achieve significant reductions in CO2 emissions with modest actions in addition to vehicle technology improvements. However, even large “baskets” of policies are not likely to reduce transportation related CO2 emissions more than about 15 to 20% below our chosen baseline of 2005 levels in most regions, and their effect on global CO2 emissions is likely not observable. 

In most regions policy-driven reductions of 20 to 50% are unlikely to be achieved, and therefore long-range plans should be realistic and not be overly optimistic. Particularly, plans should eschew promoting actions related to living patterns or the like, which are not likely to be approved, or be effective if endorsed. Given the wide range of circumstances across regions, the report recommends that all major actions be subjected to a detailed assessment of CO2 reduction potential versus cost. 

In short:

  • Regions should understand local circumstances (growth rate, mixes, transit shares, etc.). Slower growing regions are likely to achieve considerable reductions just through fleet turnover. 
  • Each region should review its opportunities for emission reduction, considering costeffectiveness.
  • Most regions should focus more on work-at-home strategies and on speed-related system improvements such as reducing delays at intersections and on the arterial system. Some might also benefit from speed reduction on fast-flowing facilities, but the loss of time is substantial and can harm economies. 
  • Regions should resist the temptation to over-hype transit impacts and other “green” actions. Transit impacts are likely to be very small, very costly and cost-ineffective in most regions, particularly those with less than one million people. 
  • Similarly, most high-capacity additions are likely to be cost-ineffective too. They should be evaluated carefully, looking for possibilities such as turn lanes, signal actions, bottleneck removal and selective widenings. 

In conclusion, our assessment finds that significant reductions in CO2 emissions beyond those already mandated from new CAFE standards are likely to be relatively small, particularly on a global scale, and may be unnecessary.

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