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

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Transportation’s Role in Reducing U.S. Greenhouse Gas Emissions: Volume 2 The strategies analyzed in this report for reducing carbon-intensive travel activity will reduce total Federal Highway Trust Fund revenues in rough proportion to fuel savings and GHG reductions. Under the 2030 combined scenario described above, the net impact on revenues could range from about $2.2 to $7.3 billion annually. 6 Funding shortfalls could be mitigated or avoided in the future through shifts in tax structures or through alternative infrastructure funding mechanisms. In particular, the pricing strategies evaluated in this section (including a VMT fee, intercity tolls, or congestion or cordon pricing) would provide a supplemental funding source to support other infrastructure investments and services. 6 Based on a total fuel savings of 11.8 to 39.8 million gallons and a tax rate of 18.4 cents per gallon. 5-15
Transportation’s Role in Reducing U.S. Greenhouse Gas Emissions: Volume 2 � 5.2 Pricing Pricing strategies are designed to increase the cost of driving in order to internalize the external costs associated with travel (environmental and congestion), discourage lowvalue trips, and encourage more efficient use of the transportation network. Pricing strategies will result in a variety of effects including fewer trips, shorter trips, greater use of alternative modes, and shifting travel to times when congestion is less. Five pricing strategies are discussed in this section: • VMT fees, which charge a fixed cost per mile driven; • Intercity tolls, applied specifically to rural InterState and other limited-access highways; • Pay-as-you-drive insurance, which converts the variable costs associated with insurance (i.e., costs such as crash risk that are proportional to distance driven) into a per-mile cost paid by the vehicle owner; • Congestion pricing, in which highway travel under conditions of high demand is priced higher to keep travel and therefore congestion at levels of optimum economic efficiency; and • Cordon pricing, which is essentially congestion pricing applied to a particular area (usually the region’s central business district) to discourage enough travel to keep traffic in the area moving efficiently. Economy-wide market measures, including a cap-and-trade system or carbon tax (see Volume 1, Section 4.0), will also increase the cost of driving, and therefore bear similarities to a VMT fee. Unlike a VMT fee, however, the carbon-based costs will also affect drivers’ vehicle purchasing habits since the carbon price rewards lower fuel consumption, not just fewer miles driven. Increased motor fuel taxes, which are not discussed separately in this report, will have the same effects as a carbon tax of equivalent magnitude. The advantages and disadvantages of various pricing mechanisms are discussed in Volume 1, Section 3.0. Some of the other strategies discussed in this report also encompass pricing measures. For example, Parking Management (Section 5.4.2) can include pricing as a management strategy. Worksite Trip Reduction Programs (Section 5.5.1) strategies often include financial incentives for the use of transit, nonmotorized travel, or ridesharing, or parking pricing to discourage driving. The five transportation-specific pricing measures that follow can be analyzed using broadly similar methods. Estimates of VMT reductions generally rely on common assumptions regarding elasticities (how much VMT changes with respect to a given change in travel cost) and baseline vehicle operating costs. The cost and elasticity assumptions used to develop the estimates presented in this report are described in detail in Appendix A. In addition, while congestion pricing and cordon pricing will affect total VMT, their primary goal is to affect the efficiency of travel by reducing travel in congested 5-16
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Acknowledgments Transportation's Ro
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Table of Contents Transportation's
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List of Figures Transportation's Ro
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Transportation's Role in Reducing U
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1.0 Introduction Transportation's R
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Induced Travel Demand Transportatio
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3.11 SUMMARY OF FINDINGS Transporta
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Table 3.5 Findings by Strategy: Sys
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Strategy Name Travel Activity Commu
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6.0 Conclusion Transportation's Rol
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Printed on paper containing recycle
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Transportation’s Role in Reducing
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1.0 Introduction Transportation’s
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2.0 Low-Carbon Fuels Table of Conte
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List of Tables Transportation’s R
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� 2.1 Summary Overview of Low-Car
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Effects on Infrastructure Funding T
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Tax and tariff policy also can affe
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In 2006, approximately 43,000 mediu
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Market Penetration Transportation
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� 2.5 Liquefied Petroleum Gas (LP
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Development of a Hydrogen Infrastru
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� 2.9 Electricity Overview Many o
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Feasibility Transportation’s Role
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� 2.10 References Transportation
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Transportations Role in Reducing U.
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Component Shares in Total Price Tra
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