Transportation's Role in Reducing U.S. Greenhouse Gas Emissions ...

Transportation's Role in Reducing U.S. Greenhouse Gas Emissions: Volume 1
acceptable levels of performance in all categories, although it would cause shifts
in funding among states and MPOs and transit operators. It may be difficult to
achieve political support from individual states and regions that stand to lose
funding if they cannot meet performance objectives. In addition, insuring
sufficient funds are available to maintain the condition and performance of the
transportation system in all regions may be a consideration. Furthermore,
whether applied to individual projects or to overall programs, minimum
requirements for technical analysis and oversight would be needed in order to
verify that projected GHG reductions are actually likely to be achieved. This
would add to the planning resource requirements of states and MPOs and the
oversight responsibilities of DOT.
In each of the mechanisms discussed above, the Federal government should
ensure that Federal agencies are working together to align funding policies and
incentives and coordinate their programs. For instance, DOT, EPA, and HUD
have established a Sustainable Communities Partnership. In addition, as
transportation planning and funding decisions are made at all three levels of
government—Federal, State, and local—Federal agencies must work in
partnership with State and local governments, respecting the unique roles of
each. Any Federal policies that are developed would need to keep in mind the
needs of smaller MPOs, which often have fewer resources available for planning
and therefore may find it more challenging to develop reliable, analysis-based
performance measures for specific projects and programs.
4.2 PRICE CARBON
Mechanisms to price carbon emissions include:
• An increase in the Federal motor fuels tax to discourage carbon emissions.
• A cap and trade system, in which a limited number of GHG emissions
allowances are traded in the market to cap overall emissions across all
economic sectors;
• A carbon tax in proportion to the carbon content, or carbon dioxideequivalent
emissions, of the fuel.
There are three economic rationales for applying price signals:
• Carbon dioxide and other greenhouse gases can be considered an externality,
and their full social costs (i.e., climate change-related damages) should be
considered in business and consumer decisions; and
• Price signals harness market forces to identify and implement the most
efficient and lowest costs mechanisms for reducing greenhouse gas
emissions; and
• Economy-wide price signals help to solve the complex problem of
incorporating life cycle emissions into a regulatory regime by including
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