Additional Benefits and Costs

Additional Benefits and Costs

Wider availability of alternative fuels will allow more people choice in selecting low-carbon fuels and thus increase demand and create a more stable framework for producers.

This may present an opportunity to assess the overall structure of how fuel taxes are used to fund highway maintenance. If the goal is to lower GHG emissions by reducing overall fuel use through fewer vehicle miles driven and greater fuel efficiency, this will be a concern to stakeholders in the highway maintenance industry. Generating highway maintenance funds by assessing proportionately higher taxes on higher carbon fuels may be an option in the short term.

Feasibility Issues

Any attempts to restructure fuel taxes are likely to be more successful if there is sufficient buy in from the retailers. As mentioned above, stakeholders in highway maintenance and infrastructure also need to be brought to the table to address their concerns and gather their input regarding how changes in fuel taxes may change fuel tax revenue targeted for highway maintenance.

Status of Group Approval

Pending

BT-1.2: Low Carbon Fuels Policy

See attached Midwestern Low Carbon Fuel Policy recommendations

BT-1.3: Increase Vehicle Fuel Efficiency

Policy Description

The policy is designed to reduce GHG emissions from on-road vehicles and off-road engine vehicles (including marine, rail and other off-road engines and vehicles such as construction equipment) through technology deployment designed to cut GHG emission rates per unit of travel or use. This policy provides one of the three essential components of reducing GHG emissions related to the transportation sector, namely vehicle efficiency (this policy), GHG intensity of fuels (BT1.2), and vehicle miles traveled (BT 2.1,2.2 and 2.3).
This goal can be accomplished by a combination of the following means:

1. 
   Increase the vehicle fuel efficiency standards for the existing fleet of vehicles available in the region;
   
2. 
   Increase financial incentives for consumers to purchase HEV and PHEV vehicles that reduce the amount of fossil fuels used per mile of travel; and
   
3. 
   Increase the availability of more efficient and affordable vehicles by permitting the sale of highly efficient vehicles made by both American auto companies (i.e. the Ford Fiesta) and non-American companies (i.e. Citroen, Fiat) that are not currently allowed to be sold in the region.
   

Policy Design

In designing incentives for low carbon or energy efficient vehicles, a regional body should develop criteria for what constitutes a low carbon or energy-efficient vehicle or engine. The most reliable measures are performance-based quantitative criteria, either meeting a carbon footprint criteria (GHG-per-mile) or a miles per gallon criteria.
In general, the types of vehicles likely to be included under a “low carbon vehicles” program would include: flex fuel vehicles, hydrogen fuel cell vehicles, and hybrids that achieve exceptional fuel efficiency. These are vehicles that currently have limited availability in the region or are out of the price range for the majority of consumers or both.
Greenhouse gas reductions from vehicles can also be achieved by increasing the baseline fuel efficiency of the existing regional vehicle fleet through higher efficiency standards. Other incentives can be provided as well to reduce the cost burden on manufacturers and consumers and make the production and sale of more efficient vehicles more attractive to both. Rising fuel price is a powerful incentive for consumers to purchase more efficient vehicles and, combined with pricing incentives that reduce the overhead cost to the consumer without reducing profits for the manufacturers, could lead to widespread acceptance of higher fuel efficiency standards.
Rising fuel prices have also created a renewed interest in certain markets for highly efficient vehicles that are currently only available outside of the United States. Some of these vehicles, such as the Ford Fiesta, are made by American auto companies. There is ample reason from a fuel economy standpoint to allow these highly efficient vehicles to be available for American consumers.
In addition to setting criteria for manufacturers and consumers to earn incentives, education plays a key role in reducing overall fuel efficiency. Education is the first step to successful implementation. Drivers will voluntarily reduce fuel use and GHG emissions from their activities when they have the information necessary to make proper decisions; promoting more informed choices in the marketplace, helping consumers understand simple techniques for incremental reductions and greater efficiency in their fuel use, education can actively engage consumers in helping to achieve regional goals.

Goals:

• 
  Reduce transportation GHG emissions by 10% through education to promote intelligent transportation purchasing choices and vehicle operation. Begin consumer information program in 2010, with program expansion, as resources are made available.
  
• 
  Ensure training is delivered for all state, university and municipal fleet operators for States and appropriate agencies by 2011.
  

• 
  X% of fuel efficient vehicles should be purchased by 20XX.
  
• 
  Procurement guidelines should be modified by 20XX to allow the purchase of advanced technology and fuel efficient vehicles.
  

Parties Involved: Vehicle manufacturers, consumers, state agencies, regional advisory and regulatory agencies, consumer education organizations, media, academia, advanced technology think-tanks, legislators, and elected officials.

Other: None cited.

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