Implementation Mechanisms

Implementation Mechanisms

• 
  Provide tax incentives for higher efficiency vehicles and engines;
  
• 
  Provide incentives for retooling manufacturing facilities to advanced vehicle technology;
  
• 
  Establish an innovative gas tax approach such as a “floating tax” based on fuel price (see counter-cyclical retail subsidies or taxes in BT 1.1);
  
• 
  Provide incentives to increase purchases of fuel-efficient or low carbon vehicles;
  
• 
  Design a policy neutral feebate structure where owners of vehicles below a certain threshold of fuel efficiency would pay a fee, and those above a certain fuel efficiency would receive a rebate;
  
• 
  Provide production tax credits to bring more value-added production of plug-in hybrid electric vehicles to our region;
  
• 
  Establish an “end of life” assistance/buyback program for electric car batteries to help with both waste recovery and financial incentives for consumers; and
  
• 
  Promote and fund EV demonstration projects among Midwestern auto manufacturers.
  

Regulations and Guidelines:

• 
  Adopt state contracting and fleet standards for low GHG equipment procurements;
  
• 
  Require fleet replacement to use low carbon vehicles;
  

• 
  Establish incentives or requirements for low resistance tires;
  
• 
  Reduce idling time in locomotive and construction equipment;
  
• 
  Permit the sale of highly efficient vehicles manufactured by US and non-US automakers that are not currently available in American markets; and
  
• 
  Work with utilities to add an EV component to “smart grid” plans.

  Facilities improvements to promote efficiency:

  
  

• 
  Develop HOV lane access for low carbon vehicles.
  
• 
  Adopt “Green Port Strategy” for port facilities.
  

Legislation:



• 
  Implement Clean Car Programs and new policies to spur development and use of Plug-in Hybrids;
  
• 
  Increase the efficiency of vehicles manufactured and sold in the region while providing price support/cost recovery for automakers to assist in the transition to more efficient vehicles; and
  
• 
  Support federal fleet modernization (also known as “cash for clunkers”) legislation. Legislation should include all types and sizes of older models, structure incentives to be greater than the value of the vehicle being scrapped and allow cash incentives to apply towards an inclusive set of domestic and foreign vehicles fleets.

  Education:

  
  

• 
  Initiate marketing and education campaigns to operators of off-road vehicles;
  
• 
  Model a region wide Eco-Driver program after the proposed Michigan Eco-Driver program to be implemented in all MGA states; and
  
• 
  Design consumer education campaign for tire inflation, vehicle maintenance for maximum performance and driving habits that reduce fuel consumption.
  

Related Policies/Programs in Place

There are a few precedents for evaluating vehicles based on GHG emissions that could be evaluated.

The Michigan Eco-driver program recommends implementing four program initiatives to achieve a fuel-economy increase (and corresponding GHG reduction) of at least 10% in the mid-term with a long-term benefit potential of up to 20%. The implementation process should consider the Michigan Eco-Driver Program’s fleet programs, financial incentives, and low-idling programs that relate to the policy implementation mechanisms above, including advanced vehicle technology incentives for fleets, and a truck idling reduction program in the MI climate plan recommendations.
Any potential plans for increasing vehicle fuel efficiency should take into consideration the NHTSA federal fuel economy standards, and the recent Executive Orders and EPA actions to review the proposed federal standards and the CA waiver.

Type(s) of GHG Reductions

Primarily CO₂ reductions from fossil fuel use and greater efficiency in fossil fuels consumed.

Estimated GHG Reductions and Net Costs or Cost Savings

Estimated reductions are problematic as application of efficiency measures are not expected to be uniform across or within jurisdictions. Certain individual implementation may be able to be quantified.

Key Uncertainties

1. 
   Any barriers to introducing very efficient US and non-US vehicles to Midwestern markets.
   
2. 
   Ways fuel efficiency programs can solve rather than exacerbate job-loss problems in Midwestern Rust Belt states:
   
   1. 
      Quantify relationship between fuel price and demand for more efficient vehicles and
      
   2. 
      Look at issues surrounding federal retooling loans for auto manufacturers.
      

Additional Benefits and Costs

1. 
   Benefit of more prudent speeds and more attentive driving which are components of more fuel efficient driving, could improve traffic safety.
   
2. 
   Benefit of cleaner air from more widespread adoption of electric and fuel efficient vehicles.
   

Development costs of and feasibility issues associated with building out refueling infrastructure for EVs.

Feasibility Issues

Regional policy development process of MOU development process

Status of Group Approval

Pending

Level of Group Support

TBD

Barriers to Consensus

None identified

+BT-2.1 Vehicle Miles/Demand Management
Pricing/pay-as-you-drive

Policy Description

This policy recommends that the Midwestern Governors support their states’ institution of requirements and policies ensuring that drivers more fully pay the total costs of driving. This policy would encourage drivers to choose transportation alternatives, purchase more efficient vehicles, drive less, and/or drive more efficiently (combining trips). This option generally reduces VMT and GHG emissions. These policy options range from direct user fees to mileage-adjusted costs for related expenses such as insurance. Pay-as-you-drive (PAYD) insurance varies the cost of coverage based on miles travelled. Instead of facing a single, flat insurance fee, a family under a PAYD insurance policy has the ability to control the cost of insurance by traveling fewer vehicle miles. Moreover, policy approaches that reduce VMT translate to societal savings through less need to spend tax dollars on expanded highway capacity. VMT reduction is a way to save money.

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