California Gov. Gavin Newsom’s bold initiative to phase out the sale of new gasoline-powered cars in the state by 2035 raises a host of implementation questions. Among the many policy issues are how the state’s gas tax revenues would be replaced and the long-term implications for subsidized modes of transportation such as mass transit and high-speed rail.
California will ban the sale of new gasoline-powered passenger cars and trucks in 15 years, Gov. Gavin Newsom announced Wednesday, establishing a timeline in the nation’s most populous state that could force U.S. automakers to shift their zero-emission efforts into overdrive.
The plan won’t stop people from owning gas-powered cars or selling them on the used car market. But in 2035 it would end the sale of all new such vehicles in the state of nearly 40 million people that accounts for more than one out of every 10 new cars sold in the U.S.
Regardless of the possible desirability of Newsom’s policy from an environmental standpoint, a rapid move away from gasoline-powered cars raises many practical concerns, such as how to pay for road maintenance. In the last fiscal year, California collected about $6.5 billion in gas tax revenues to partially pay for road repairs, and on July 1, 2020, the state gas tax rate increased to 50.5 cents per gallon.
Gas tax receipts dwarf the roughly $1 billion that is collected by the Metropolitan Transportation Commission in Northern California, the Toll Roads of Orange County and smaller tolling agencies (many counties also levy transportation sales tax but most proceeds are devoted to transit).
As drivers switch to electric vehicles, gas tax revenues will decline. Because the governor’s ban will only apply to new vehicles and does not extend to trucks and buses for an additional 10 years, some gas tax revenue would still be available in 2035 but it would likely be much lower than current levels. The gasoline market can be expected to spiral as reductions in demand result in the closure of gas stations, which would reduce the convenience of gasoline-powered vehicles and encourage more drivers to switch to electric cars.
To maintain and upgrade existing roads, and to ensure the structural integrity of thousands of bridges and overpasses, the state will have to find a replacement for gas tax revenues. One alternative worth considering is mileage-based user fees, which, like gas taxes, link an individual’s road usage.
California took a step in this direction in 2017 when the state’s Department of Transportation conducted a pilot study of road charges at the behest of the state legislature.
Gov. Newsom’s order also mentions “building towards an integrated, statewide rail and transit network,” but, in many ways, this seems redundant with the development of electric vehicles and zero-carbon micro-mobility options (such as electric scooters) that are also included. The environmental case typically made for rail is that would replace trips by gasoline-powered vehicles. But if internal combustion cars have been replaced by zero emission vehicles, this advantage may disappear.
In some situations, trains could still provide a greenhouse gas benefit over electric cars—if the state’s electrical supply is generated from fossil fuels and if the electricity consumed per passenger is lower. While California aspires to switch to from fossil fuel power plants to solar and wind generation, it remains to be seen how fast that transition will occur. So, it may well be that both electric cars and electric trains will contribute to greenhouse gas emissions in 2035 and beyond.
Regardless of whether California’s power grid becomes fully renewable over the next 15 years, individuals can already charge their cars from solar panels they install in their homes or garages.
Although trains can, carry more passengers than cars, they are also far heavier and thus require more electricity to move. While a Tesla Model 3 weighs around 4,000 pounds, the new Los Angeles Metro Series 7000 passenger train cars weigh 85,000 pounds and an Amtrak train car weighs around 110,000 pounds. When train cars are full, those higher weights are spread over a large number of passengers resulting in less energy usage per passenger mile. But trains often run well below capacity during off-peak hours, near the terminus of any given line and, of course, during a pandemic.
If the coronavirus pandemic and social distancing continue into 2021, as seems very likely, mass transit ridership patterns may become permanently disrupted. For some, working remotely from home is becoming normalized, Zoom calls have replaced in-person meetings, and some families are relocating out of state.
These trends may mean less commuter and inter-city rail usage going forward. As mass transit system operators try to maintain service levels —for fear that insufficient departure frequencies would further reduce ridership— train occupancy may remain lower than pre-pandemic levels.
Potentially lower ridership and a more rapid switch to zero emission cars also further undermine the already weak case for California’s high-speed rail project. The California High-Speed Rail Authority’s (CHSRA) latest draft business plan calls for the delayed project’s service to now start by 2028 or 2029, just six or seven years before the governor’s gasoline-powered car phase-out. And if high-speed rail service ever starts, it would only connect Bakersfield, Fresno, and Merced at that time. Those Central Valley locations are car-oriented cities with much lower populations than major urban areas, like San Francisco, San Jose and Los Angeles.
The high-speed rail business plan assumes that a Bay Area connection would be built and added in 2031 and service to Los Angeles would start in 2033. But funding sources for those costly extensions have not been secured or identified. If the additions occur on schedule, the High-Speed Rail Authority projects carbon emission savings of 75,000 metric tons in the year 2029, 320,000 metric tons of savings in 2032, and 1,229,000 metric tons of savings in 2035—based on its medium ridership scenario.
These savings represent a tiny fraction of the 424.1 million metric tons of greenhouse gas emissions California generated in 2017 and may not even offset the large volume of carbon emissions generated during the train’s construction phases.
But even these projected emissions savings are based on aggressive, pre-pandemic ridership forecasts and do not take into account Gov. Newsom’s new electric vehicle policy. Under its medium ridership scenario, the High-Speed Rail Authority says it expects 32 million passengers to board its trains in 2035, a likely overly optimistic figure that is roughly equivalent to Amtrak’s nationwide ridership in 2019.
When translating these ridership levels to projected emission reductions, the CHSRA used electrical vehicle penetration projections from the US Energy Information Administration’s (EIA) 2019 Annual Energy Outlook. In that report, the EIA forecast gasoline-powered vehicles would still account for 75 percent of new auto sales as late as 2050, which is a far cry from the zero percent that Gov. Newsom’s executive order intends to achieve. So, if California does intend to eliminate the use of petroleum for passenger transport sooner rather than later, high-speed rail’s carbon emission saving projections will have to be reduced dramatically as well.
Replacing the internal combustion engine by 2035 is a very ambitious goal. To achieve it, the Newsom administration is going to need to consider how the policy would impact other plans. The state would be wise to scale back its ambitions to build out its high-speed rail system that would have minimal impact on greenhouse gas emissions and instead focus on how to equitably finance California’s roads without gas tax revenues.