Transportation and America's Clean-Energy Future

Transportation and America's Clean-Energy Future

Speech by Eileen Claussen, President
Pew Center on Global Climate Change

Institute of Transportation Studies
University of California, Davis
Davis, CA

May 3, 2001

Thank you very much. It is a pleasure to be here in California to talk about some of the connections between transportation and global climate change. I want to thank Dan Sperling and the Institute of Transportation Studies-both for the invitation to speak here and for all of your wonderful and groundbreaking work on these issues.
Transportation, of course, is an issue that is near and dear to Americans' hearts-and for one reason: we love our cars. While pondering the question of why we love our cars so much, I came upon a quotation from the political satirist P.J. O'Rourke, who said:
"Automobiles are free of egotism, passion, prejudice and stupid ideas about where to have dinner. They are, literally, selfless. A world designed for automobiles instead of people would have wider streets, larger dining rooms, fewer stairs to climb and no smelly, dangerous subway stations."
The truth, of course, is that we already have a world designed for automobiles. And the world is becoming more and more automobile-centric every day. Here in California, where the notion of the "freeway" came to life, the Governor's budget from last year placed the number of registered vehicles-that includes cars, trucks, trailers and motorcycles-at roughly 26 million. This was projected to rise by more than half a million this year. Nationally, Americans own roughly 140 million cars, according to the Department of Transportation, and we travel almost 4 billion miles in our cars every day. According to my calculations, this is the equivalent of more than 20 trips to the sun and back-and you thought you had a rough commute.

The Transportation-Climate Connection
What does all of this have to do with climate change? Well, the truth is a great deal. Because in driving our cars, SUVs and pick-up trucks so much, we throw more than 300 million metric tons of greenhouse gases into the atmosphere each year. Overall, transportation activities accounted for an almost constant 26 percent of total U.S. greenhouse gas emissions from 1990 to 1998, according to the U.S. Environmental Protection Agency. These emissions consisted primarily of carbon dioxide from fuel combustion, but they also included nitrous oxide and other greenhouse gases.
Looking ahead, carbon dioxide emissions from transportation sources in the United States are projected to grow at an average annual rate of 1.8 percent between now and 2020. This compares to an overall increase in CO2 emissions in the U.S. of 1.4 percent per year, meaning emissions from transportation will become an even larger part of the problem in the years ahead. This continuing growth will result from projected increases in vehicle-miles traveled-translated, this means more cars driving greater distances-as well as growth in freight shipments and air travel.
Not only are more and more Americans driving longer distances, but we are driving greater numbers of bigger and more fuel-inefficient vehicles. Someone recently told me about a bumper sticker he saw on a sport utility vehicle that read: "Have you driven over a Ford lately?"
In the last few years, it seems, the car companies have been engaged in a battle royal to build the biggest, most fuel-gluttonous vehicles they can. My personal favorite is the Civilian HumVee, which I am sure you know is based on the military vehicle of the same name. The following is a description of the Hummer, as it is affectionately known, from one of the many websites created for aficionados of this remarkable vehicle:
"The Hummer has a ground clearance of 16 inches, it can scale 22-inch vertical walls, climb 60-percent grades, traverse 40-percent side slopes, and ford 30 inches of water, all while carrying up to two tons of cargo."
Just what you need to brave that weekend trip to the supermarket. And, in case you were wondering, the Hummer's fuel efficiency is a truly abysmal 9 miles to the gallon.

Cars and Climate in the Developing World
The United States, of course, is not the only country where people love their cars and trucks. Looking worldwide, energy use is increasing faster in the transportation sector than in any other. And where it is growing fastest is in the developing world. One more statistic, if you will bear with me: from 1980 to 1997, transportation energy use and associated greenhouse gas emissions increased by more than 5 percent per year in Asia and 2.6 percent per year in Latin America, compared to 1 percent annual growth in greenhouse gases from all sectors worldwide.
What is driving the increases in transportation emissions from developing countries? The answer, once again, is cars. In an upcoming series of Pew Center reports, your very own Dan Sperling and others assess the climate impacts of transportation trends in the developing world. Let me talk very briefly about two case studies that will be part of the series-both looking at trends in major cities-because I believe they underscore the importance of addressing the transportation-climate connection in the years ahead.
Shanghai, China is a city of more than 13 million that is projected to experience economic growth of roughly 7 percent per year through 2020. As a result, city planners expect the number of cars and trucks in Shanghai to quadruple by 2020. The net effect: a seven-fold increase in greenhouse-gas emissions compared to today.
Another city that is the focus of one of the upcoming reports is Delhi, India-which, coincidentally, also has a population of 13 million. By 2000, Delhi had about 2.6 million motor vehicles on its streets, but most of these were small, inexpensive motorcycles and scooters, not cars. However, in recent years, increasing incomes combined with an extensive network of roads have started to push local car sales up. The domestic auto industry in India is projecting sales growth of 10 percent a year for the foreseeable future.
Both of these cities, along with many others in the developing world, already are experiencing high levels of air pollution, much of it transportation-related. The Supreme Court of India, in fact, became so alarmed about pollution levels that it recently ordered a major expansion of the bus system, as well as other measures to reduce motor vehicle emissions. What is happening in India is not an isolated incident among developing countries. Concerns about pollution and related issues--such as congestion, rampant energy consumption and traffic safety--could well provide the impetus for efforts to reduce the growth in transportation-related greenhouse gas emissions.
The good news is that it won't require revolutionary change for these cities to accomplish this, according to the Pew reports. Among the low-cost, incremental strategies suggested by Dan and his colleagues are everything from enhancing the quality and range of mass transit to separating slow-moving traffic (including bicycles and even rickshaws) from motorized traffic. Longer-term strategies mentioned in the reports include: restructuring land development patterns to reduce demand for cars; and accelerating the introduction of highly efficient advanced vehicle technologies-a priority that I will talk about later in my remarks.
Controlling Transportation Emissions: Options for the U.S.
Of course, a lot of these same strategies would work in the United States-well, everything except creating special rickshaw lanes, I suppose. In discussing the U.S. options for reducing transportation-related greenhouse gas emissions, I believe it is useful to separate what we can do into two categories. On the one hand are options designed to encourage reductions in fuel use, including raising gas prices, tightening fuel efficiency standards for new cars and trucks, or encouraging fuel-saving consumer behaviors by promoting public transit, carpooling and other strategies. All of these, needless to say, are very controversial.
The other category of options are technology options that in and of themselves will reduce the transportation-related use of fossil fuels and associated greenhouse gas emissions. These options (from hybrid gasoline-electric vehicles to, ultimately, cars that run on hydrogen and other alternative fuels) have a policy component to them as well. But, in the end, it will be industry rather than government that brings these technologies to market and makes them a viable alternative for the average consumer.
So let's talk about fuel use first. Despite the recent increases in our consumption of gasoline, the last 20 to 30 years have seen several periods when that consumption slowed and then picked up once again. And I believe it is instructive to look at what happened during these times so we can find clues about what might work to encourage reductions in fuel use.
Going back to the Energy Information Administration trendlines, we see that growth in transportation-sector energy demand averaged 2.0 percent per year during the 1970s but then slowed during the 1980s. What happened is we saw a combination of rising fuel prices and the implementation of federal vehicle efficiency standards. Thanks in large part to these standards-known as the CAFE rules (for "corporate average fuel economy")-the average fuel efficiency of cars on U.S. roadways increased by an unprecedented 2.1 percent per year during the 1980s.
All of this followed the Arab oil embargoes of the 1970s, which led to widespread gas shortages and price increases and made smaller, more fuel-efficient cars more attractive to consumers. The oil shocks also created support for strong government action on the issue, with Congress going so far as to enact a "gas guzzler tax" in 1978; this was in addition to the new CAFE rules. However, in a decision with enormous and unforeseen consequences for the future, Congress set looser standards for so-called "light-duty trucks" on the theory that many of these were used in businesses or on farms. At the time, these vehicles made up about a quarter of new-vehicle sales.
During the 1980s, gas prices in the United States stabilized and then began to decline. And consumer preferences began to shift back from smaller cars toward mid-sized and larger vehicles. In response, the government relaxed the CAFE requirements for both light trucks and passenger cars, and fuel use was again on the rise. In 1987, the Reagan administration even proposed an outright repeal of the CAFE law, claiming it was harmful to U.S. competitiveness and jobs. Congress kept the program in place.
The Administration of George Bush (the first) restored the original CAFE standard for passenger cars of 27.5 miles per gallon in 1989, and that is where it stands today. The standard for light trucks stands at 20.7 mpg. During the 1990s, members of Congress regularly voted to "freeze" the CAFE standards at these levels, and now every year we see a congressional debate about whether the freeze should continue, or whether the standards should be raised. So far, advocates of the freeze have prevailed. And, because SUVs and light trucks now make up as much as half of the new-vehicle product mix, the average fuel economy of all the cars and light trucks sold in America-import and domestic- is no better today than it was in the early 1980s.
So over the years, you see an interplay between gas prices, fuel efficiency standards and the amount of gasoline Americans use. When prices and fuel efficiency standards rise, we tend to use less gasoline-and when they drop we tend to use more.
But gas prices and the regulation of fuel efficiency have been, and continue to be, very thorny issues politically. President Bush (the second) is on record opposing any increase in CAFE standards. And if you believe the current Administration and Congress will support any kind of gasoline tax increase, I'd say you've been inhaling too many tailpipe emissions. Right now, any significant changes in consumer behavior appear to be driven primarily by market fluctuations in gas prices, rather than high-level policy interventions.
Of course, this does not mean policy changes are playing no role whatsoever in influencing or encouraging reductions in fuel use. Last month, the Washington Post carried a front-page story about the increase in Americans' use of mass transit in recent years. The bottom line: mass-transit ridership-this includes subways, buses and commuter railroads-grew faster than highway use for the third year in a row last year. While there are legitimate questions about exactly what is driving the increase in transit use, it surely would not have happened without a stepped-up investment in buses, trains, track and other infrastructure by public authorities.
Expanded public transit is not the only way to encourage more Americans to leave their cars at home. High-occupancy vehicle (or HOV) lanes are now a fixture on American highways, both here in California and throughout the country. And new technologies such as "smart cars" and "smart roads" are on the way. And, while the primary goal of these developments, in most cases, is to reduce traffic congestion, they also can contribute to reductions in greenhouse gas emissions and smog.
Similarly, California and many other states and localities are implementing so-called "smart-growth" strategies that could lead to additional reductions in automobile use and related emissions. In these cases, once again, you see a range of factors-not just automobile emissions-driving the changes. Chief among these factors are quality-of-life concerns. Many people are just plain sick and tired of sitting in traffic.
The Road Ahead
So the fact is we are seeing a good deal of attention paid by policy makers at all levels to transportation issues in general, and, in many cases, to policy changes that have the potential to reduce transportation-related greenhouse gas emissions. Looking ahead, it is becoming increasingly clear to me that we will see even more progress on these issues in the next few years. Back in Washington, I see a growing recognition of two fundamental truths: (1) We need to do something about oil use and greenhouse gas emissions from cars and trucks; and (2) we need to think more broadly about our policy options for addressing these issues.
This summer, the National Academy of Sciences will release an evaluation of the CAFE law along with recommendations about how it might be improved. Among the members of Congress who requested the study was Spencer Abraham, then a senator and now the U.S. Energy Secretary. In the meantime, Secretary of Transportation Norm Mineta recently testified that he would like to see the CAFE freeze lifted. While he said he did not necessarily want to raise the standards, he wanted the authority to do so.
At the same time, the car companies are showing signs that they recognize the need to address the efficiency issue voluntarily-perhaps to stave off any kind of additional regulatory action. In late July 2000, Ford announced it would improve the fuel economy of its SUV model lines by 25 percent over a five-year period. This was followed by a statement from General Motors that it would do the same thing. And Daimler Chrysler recently chimed in with a similar commitment. At the same time, the car companies have agreed to reduce new car fleet-average CO2 emissions by 25 percent in Europe by 2008. And a new rule in Japan will result in a 22-percent overall improvement in the fuel economy of the cars sold there by 2010.
The car companies, in other words, are taking responsibility for finding new ways forward-whether it is through their investments in research and development of new climate-friendly products, their publicly stated targets, their new obligations in Europe and Japan or other activities. The car companies also are partners with the federal government in the Partnership for a New Generation of Vehicles. These are all very important developments because they reflect an understanding that this is an increasingly important issue-not just among regulators but among consumers as well.
Yet another potentially important development is the introduction of legislation in the United States Senate just last week to promote the use of alternative fuel vehicles and advanced car technologies through tax credits. The legislation has bipartisan support, as well as support from leading automobile companies such as Toyota, Honda and Ford. The original co-sponsors are Senators Hatch, Rockefeller, Jeffords, Kerry, Crapo, Lieberman, Collins, Chafee, and Gordon Smith. And while previous incarnations of the measure were limited to promoting natural gas and propane vehicles, the new bill provides substantial incentives for both fuel cells and gasoline-electric hybrid vehicles. The tax credits are provided for everything from the construction of fueling stations for alternative fuels to the purchase of such fuels at retail by the consumer. The bill is called the Cleaner Efficient Automobiles Resulting From Advanced Car Technologies Act, or CLEAR for short.
Introduction of the CLEAR measure followed the introduction earlier this year of a bill by Senator Jeff Bingaman of New Mexico to set a cap on petroleum use among the entire "light duty sector," which includes cars, trucks and SUVs. Under the Bingaman proposal, the Department of Transportation would negotiate with vehicle manufacturers on a set of measures that would result in an increase in fuel use among these vehicles of no more than 5 percent by 2008-compared to a 25-percent increase if current trends hold. According to Bingaman, this provides manufacturers with even more flexibility than the CAFE rules while focusing on total gasoline use as opposed to the efficiency of various types of vehicles.
Some of what is happening on these issues right now may be familiar, but some is not. Ten years ago, as part of the debate over the Energy Policy Act in the aftermath of the Gulf War, there were serious discussions about CAFE reform that ultimately went nowhere. Now, in the midst of a different kind of energy crisis, we're once again talking about oil use by cars and trucks. But the key difference between now and then is the proactive role that the auto companies are playing in the current discussion.
It is because of this that I sense a real opening. For people like yourselves, who are in the business of generating new ideas and new approaches to transportation, this may be your moment. At the very least, it is your best opportunity in a long time to help set a more rational course for oil use and associated greenhouse gas emissions from cars and trucks.
The Automotive Technologies of Tomorrow
In the end, I believe it will be difficult to achieve truly significant, long-term reductions in transportation-related greenhouse gas emissions without technological changes to our cars themselves. Toyota, which is a member of the Pew Center's Business Environmental Leadership Council, recently introduced the Prius, a gasoline-electric hybrid car that gets 48 miles per gallon in combined city-highway driving. Other car-makers have similar vehicles either in development or already on the market.
Ultimately, though, these hybrids will represent an interim step in the progression toward truly climate-friendly vehicles. Among the technologies that may power these cars and trucks of the future are fuel cells that combine hydrogen and oxygen from the air to create a chemical reaction that produces electricity. Long a staple of the U.S. space program, hydrogen fuel cells produce only heat and water vapor as byproducts-in other words, no carbon dioxide and no smog-creating pollutants. It is important to note, however, that right now it takes a lot of energy to produce the hydrogen needed to power these fuel cells. Either you have to make it from fossil fuels or you have to use electricity to break water into its component parts of hydrogen and oxygen. Unless the power comes from renewable sources, this requires the burning of fossil fuels. Moreover, even liquefying the hydrogen so it can be transported requires a lot of energy.
Even with these drawbacks, however, hydrogen fuel cells would result in substantial reductions in greenhouse gas emissions. And researchers are working on less energy-intensive methods for producing hydrogen as we speak. In a widely quoted speech in January 2000, William Clay Ford, Chairman of the Ford Motor Company, said:
"I believe fuel cell vehicles will finally end the 100-year reign of the internal combustion engine as the dominant source of power for personal transportation. It's going to be a winning situation all the way around-consumers will get an efficient power source, communities will get zero emissions, and automakers will get another major business opportunity."
It's not just the auto companies that are interested in fuel cells. Energy companies long associated with fossil fuels-from BP and Shell to Sunoco-also are investing in R&D, participating in demonstrations, and developing new fuel cell technologies.
Right now, we are already seeing successful demonstration projects, including the California Fuel Cell Partnership-which will place about 70 fuel cell passenger cars and buses on the road between 2000 and 2003. Hydrogen fuel cell-powered bus fleets are already on the road here in California and in other places from Vancouver to Chicago. The goal of these demonstrations is to build public awareness about fuel cells, test the technology under day-to-day driving conditions, and begin to figure how to develop the fueling infrastructure to support these vehicles.
In addition to fuel cells, there is a lot of work being done to develop other power options for cars-from state-of-the-art electric vehicles to cars that run on ethanol derived from agriculture wastes and even municipal solid wastes. A recent report from General Motors and others says this last option actually would result in negative greenhouse gas emissions because some carbon would be removed from the atmosphere in the process.
But fuel cells and other climate-friendly transportation innovations won't go far or fast enough without some level of government involvement. This means making significant investments, in partnership with industry, in research and development of alternative technologies. It means providing incentives for manufacturers to invest in more cutting-edge research. It means doing more to convert public vehicle fleets to alternative fuels. And it means thinking long and hard, in the context of developing a national energy strategy for the 21st century, about how best to transition to fuel cells and other low- or no-emission alternatives.
I have often said that responding successfully to the issue of climate change will require a second industrial revolution. But industry alone can't make the revolution happen. Consumers and government can-and must-play an active role. Here in California, legislators have said that 10 percent of the cars and trucks sold in the state in 2003 will have to be zero- or low-emission vehicles. This is precisely the kind of policy leadership that is needed to help create America's clean-energy future. And, when combined with cooperative, incentive-based programs to get industry and consumers to buy into that future, these types of policies can help Americans realize that meeting the challenge of climate change doesn't mean abandoning our cars. It just means being smart and making the right short-term and long-term choices about everything from commuting and fuel economy to the automotive technologies of tomorrow.
Yes, it's true that Americans love their cars. But we also love progress and technological solutions to problems. And, at the same time, we hate inefficiency, and we hate sitting in traffic even more. Combine all these loves and hates, and you start to see the outlines of a good road forward for all of us. Thank you very much.