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

Transportations Role in Reducing U.S. Greenhouse Gas Emissions: Volume 2
economy fees and rebates (“fee-bates”) provide financial incentives to purchase more fuelefficient
vehicles. An analysis for the U.S. Department of Energy (DOE) found that a
feebate equivalent to a $107 rebate for each additional mile per gallon fuel economy above
26 mpg (or fee of $107 for each mpg below 26 mpg) results in a higher level of fleet fuel
economy than a $3 per gallon fuel price and equivalent cumulative fuel savings in 2020,
but does not achieve fuel savings as great as CAFE levels of 40/30 mpg for cars and light
trucks (EEA, 2008). Fuel or carbon taxes also encourage this behavior by raising the price
of fuel. Tax incentives, such as those already offered for hybrid vehicles can be used to
promote particular technologies or be based on fuel consumption. Certain hybrid-electric
vehicles currently are eligible for tax credits of up to $3,000 per vehicle, offered through
the end of 2010 by the Internal Revenue Service (IRS); and the Energy Policy Act of 2005
included tax credits of up to $12,000 for hybrid heavy-duty vehicles, based on the fuel
efficiency and weight of a particular vehicle.
Consumer education strategies, such as labeling, regarding the relative efficiency of
vehicles and tires (or other vehicle components) can be used as a strategy to help
consumers to integrate fuel economy into their purchasing decisions. Existing education
programs include EPAs Green Vehicle Guide, first launched in 2001 to give consumers
information about the environmental performance of different vehicles using a rating
system; the DOEs web site, www.fueleconomy.gov, a similar initiative; and SmartWay, a
voluntary collaboration between EPA and the freight industry to reduce greenhouse gases
and air pollution by conferring a special designation to vehicles that perform well.
Section 5.5.2 provides details on these programs. Finally, to address the slow rate of fleet
turnover, vehicle scrappage programs can be used to remove old, less efficient vehicles
from the roads. Such programs were first applied in California in the 1990s to remove
polluting vehicles from the road. In June 2009 the Federal “Cash for Clunkers” bill was
signed into law establishing the Car Allowance Rebate System (CARS), which provides a
$3,500 to $4,500 rebate for trade-in of a used car or truck for a new vehicle with a
minimum fuel economy improvement compared to the used vehicle (the program also
allows for trade-in of older model trucks that are not rated for fuel economy).
The heavy-duty vehicle fleet offers opportunities for funding or financing retrofits with
grants and low-cost loans (such as are available through EPA’s SmartWay program, or
have been offered through California’s Carl Moyers program to reduce air pollutant
emissions). Some attempts have been made to mandate improvements to the heavy-duty
vehicle fleet beyond Federal regulations; the Clean Air Action Plan for the Ports of Los
Angeles and Long Beach includes a Clean Trucks Program that bars pre-1989 trucks from
entering the ports and imposes fees on newer vehicles that do not meet the port’s
standards, and the California Air Resource Board is considering measures that would
require SmartWay-type retrofits on all heavy-duty vehicles (MJ Bradley, 2009). For transit
vehicles, public funding can be directed at purchasing hybrid vehicles and alternative
fuels.
Finally, government funding could accelerate the pace of research and development into
advanced automotive technologies. This could make new technologies more cost-effective
and feasible and increase the options available for the future vehicle fleet. In addition,
government partnerships (such as EPA’s recent partnership with UPS to introduce hybrid
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