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

Transportation's Role in Reducing U.S. Greenhouse Gas Emissions: Volume 1
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and industry research programs—such as DOE’s FreedomCAR and Fuel
Partnership—can be continued. Upcoming climate and energy legislation could
include funding of a substantial joint research program to accelerate advanced
research efforts. This basic research would set the stage for private investments
in technologies with strong market potential.
The need for extensive climate research—including a dual focus on both
mitigation and adaptation—is an ongoing national priority. For transportation
as well as other sectors, a strong component of this research should be focused
on the information needs of national, State, and local planners and system
managers. Federal interagency research partnerships—most notably the U.S.
Climate Change Technology Program and U.S. Global Change Research
Program—include active participation and direction from DOT and other
program agencies. This close collaboration helps ensure that Federal research is
conducted that addresses the specific data and technical needs of transportation
decision-makers.
Economy-Wide Price Signal
Mechanism • Climate or energy legislation
Key Options • Cap and trade
• Carbon tax
DOT Role • Technical support to Congress
Magnitude and Timing of Transportation • Modest in near-term, moderate in mid-term, potentially
GHG Reduction
strong in long-term
An economy-wide price signal could be established through a cap and trade
system or a carbon tax. Cap and trade legislation is the primary policy option
currently under discussion. Information on carbon taxes is found in Section 4.
Legislation to establish a cap and trade program would support all strategies by
creating a price signal for carbon that incorporates the negative externalities of
carbon-based fuel use. An increased price for carbon would provide incentives
for consumers and businesses to minimize carbon-based fuel consumption. This
would help drive the development of cost-effective responses (e.g., technology
development, travel behavior changes) that would reduce GHG emissions. The
implementation of carbon pricing—assuming a sufficiently strong price is
established—would result in reductions in fuel consumption and an ongoing
shift to non-carbon-based fuels and technologies across all sectors.
In the near-term, however, the direct impact of an economy-wide cap and trade
pricing scheme on the transportation sector is expected to be limited compared
with the impact on other sectors, especially the electricity generation sector. By
definition, pricing approaches for carbon stimulate reductions in those sectors for
which the most cost-effective alternatives can be identified. If the cost of carbon
fuels to transportation is insufficiently high, significant transportation responses
would be delayed until prices further rise. Further, market deficiencies can be