Climate change is among the top environmental threats confronting the planet, and GO TO 2040 emphasizes the need to slow the rate at which greenhouse gases (GHGs) are emitted into the atmosphere.  For example, GO TO 2040 recommendations such as retrofitting buildings for energy efficiency and providing good alternatives to automobile travel reduce GHG emissions while also reducing energy consumption and improving quality of life. While the plan focuses primarily on actions that can be taken locally or regionally, it also calls for increased leadership by the federal government. The plan notes that federal action to institute economy-wide reductions of GHG emissions would be needed to stabilize carbon dioxide levels in the atmosphere. This Policy Update examines recent steps taken by the federal government to mitigate climate change (that is, to reduce GHG emissions).  A subsequent update will focus on local efforts to adapt to a changing climate.

Congress and climate change

Comprehensive federal climate change legislation has been attempted without success several times in the past few years. Back in 2007 and 2008, there was a flurry of bills on climate change, most of which employed cap-and-trade approaches. The Lieberman-Warner Climate Security Act would have subjected almost 90 percent of U.S. emissions to a cap-and-trade regime. The bill came to the Senate floor but was never called to a vote. In the next Congress, the U.S. House of Representatives passed another cap-and-trade bill, the American Clean Energy and Security Act (the Waxman-Markey bill), but a similar push failed in the Senate a year later in the summer of 2010. In the present Congress, there appears to be little appetite for a comprehensive climate bill. Instead, executive agencies, mainly the U.S. Environmental Protection Agency (U.S. EPA), are beginning to regulate individual sectors of the economy under existing authority provided by the Clean Air Act, while most legislative activity seems to be aimed at limiting U.S. EPA’s ability to do so.
 

Regulatory actions by federal agencies

Following a suit against U.S. EPA by several states pushing for GHG emissions standards in cars, the Supreme Court ruled in 2007 that GHGs constitute “pollutants” under the Clean Air Act and would have to be regulated if found to endanger public health. In response, U.S. EPA issued an “endangerment finding” two years later, concluding that (1) GHGs do in fact jeopardize public health by causing climate change and (2) that motor vehicles contribute to the problem. (Although the peer review process U.S. EPA used to support that finding was recently criticized by its inspector general, the overall determination was not called into question.) U.S. EPA, in conjunction with the U.S. Department of Transportation (U.S. DOT), then issued GHG emissions standards for cars and light trucks in early 2010. Going into effect in model year 2012, those standards set a fleet-wide emissions limit that would drop by five percent annually to 250 grams of carbon dioxide equivalent per mile by model year 2016. A combination of different technologies or improvements in fuel economy could be used to meet the limits, but if industry chose only to implement fuel economy improvement technologies, fleet-wide average fuel economy would be 35.5 miles per gallon (MPG) in 2016.

U.S. EPA and U.S. DOT made two major additions to these rules this summer. First, the agencies moved to enact GHG emission limits for medium- and heavy-duty vehicles, such as work trucks, buses, and tractor trailers, which are the second largest source of emissions in the transportation sector after passenger cars and light trucks. These limits will be effective from model year 2014 to 2017. Second, in July they announced that they would be developing emissions standards for passenger cars and light trucks to cover model years 2017 through 2025 that would bring fleet-wide average fuel economy to 54.5 MPG in 2025.  

After being sued by environmental groups, U.S. EPA took a step beyond the transportation sector and agreed to propose rules addressing GHG emissions from two major stationary sources. The rules would set New Source Performance Standards -- emission limits for new or significantly expanded sources -- for GHGs released by oil refineries and for power plants fired by fossil fuels. The agency agreed to issue the rules this summer, then asked for an extension to September 2011.  That deadline was also missed.  The fate of these rules is unclear as they are caught up in a national debate over new regulations in a fragile economy. 
 

The role of transportation policy

While U.S. EPA has also instituted GHG reporting requirements for certain industries and set up rules for which emitters of a certain size will need permits, some of the most concrete actions so far are the improvements in vehicle technology, particularly fuel efficiency. This is indeed an important action for the transportation sector. A nationwide analysis by U.S. EPA suggested that the first round of passenger car and light truck standards discussed above would cut more than 400 million metric tons (MMT) of carbon dioxide equivalent in 2040. In contrast, baseline transportation sector emissions in 2040 are, under one set of assumptions, forecast to remain around their current level of 1,700 MMT – an overall reduction of nearly 25 percent.

But fuel efficiency is only part of the picture. Many of the strategies that CMAP has recommended -- such as managing roadway demand through congestion pricing, expanding use of public transit, and establishing land use patterns that support alternative modes of transportation -- are also effective. Using a target year of 2050, the study Moving Cooler suggested that, at the national scale, these strategies could achieve another 24 percent reduction relative to baseline growth if implemented widely.

These additional strategies are important to remember as fuel efficiency alone has two major side effects on transportation finance that have to be addressed. Motor fuel taxes pay for most of the maintenance on roads, yet revenue collected per mile driven goes down as fuel efficiency increases. At the same time, fuel efficiency also makes driving relatively cheaper, encouraging more travel and putting more wear and tear on roads. Transit systems are affected too, since they derive a considerable part of their revenue from motor fuel taxes as well. Thus, it is important to supplement and perhaps ultimately replace motor fuel taxes with revenue sources that are not undermined by improved fuel economy.  The GO TO 2040 plan recommends bolstering motor fuel taxes in the near term, while looking for replacement revenues in the long term.

This brings us to the transportation reauthorization process. Although SAFETEA-LU was extended for six months at the beginning of September, a major multi-year reauthorization is still needed. Making carbon emissions reductions should be a central goal of the next transportation bill. Better yet, the strategies and funding programs decided on during reauthorization ought to be considered in light of an eventual comprehensive climate bill.