This article is the fourth in a series by Robert J. Klee, Ph.D., J.D. exploring policies from states across the country that, if adopted nationally with sufficient speed and ambition, could form the basis for the deep decarbonization of the U.S. economy. Read the rest of the series here.
Klee is a lecturer at the Yale School of Forestry & Environmental Studies and Yale Law School, and the former commissioner of the Connecticut Department of Energy and Environmental Protection (2014-2019).
States across the U.S. have started to put together the policy building-blocks for decarbonization of their economies. The federal government — and states that have lagged behind — can follow their lead in setting carbon emission targets, mandating renewable energy use, upgrading electric grid technology, improving energy efficiency, and various other areas laid out in earlier installments of this series.
To support these efforts, we will also have to overhaul our transportation system. Over the course of the past century, we used fossil fuels to revolutionize the way we move from place to place — creating unprecedented mobility, but substantially contributing to climate change. About 30% of U.S. greenhouse gas emissions come from transportation.
Mandating Clean Vehicles
To achieve the economy-wide greenhouse gas reductions necessary by 2030, we must remove the internal combustion engine from as many vehicles as possible, as fast as possible. California’s zero emission vehicle (ZEV) mandate — which ten Democratic and Republican states on the east and west coasts have joined, including Colorado just this year — simply requires automobile companies to manufacture and deliver battery electric and hydrogen fuel cell passenger vehicles in large numbers, on clear timeframes.1
“Simple” is probably a word seldom used to describe the California ZEV mandate. Because it was the first of its kind, and a significant departure from the tailpipe emission standards traditionally used to regulate passenger vehicles, the car manufacturers went into full Chicken-Little mode (as they always do whenever new environmental or safety regulations are proposed). They lobbied hard to build flexibility mechanisms into the ZEV mandate to make compliance easier, in case their worst fears about the speed of development of ZEV technology — and about consumer preferences — came true.
A mandate works: it forces innovation by otherwise reluctant car manufacturers. Because of the California ZEV mandate, there are now over 30 ZEV models available for sale in the United States.
For example, the manufacturers get extra credit for vehicles with large batteries, which lets them sell fewer total cars. At the beginning of the program, they got to double count sales in California as if they also simultaneously occurred in the nine other states that joined the ZEV mandate (the notorious “travel” provision, which sunsetted in 2018). This meant the manufacturers could focus their efforts on selling cars in California — a very large market with a relatively friendly climate (without the New England winters that can hurt battery life and charging time). Outside of California, they get to pool vehicle sales and use extra sales in one state to count towards another state’s quota (the “pooling” provision, which still exists).
But despite all this, a mandate still works: it forces innovation by otherwise reluctant car manufacturers. Because of the California ZEV mandate, there are now over 30 ZEV models available for sale in the United States.
Based on today’s sales figures and the efforts of California and the nine other states, ZEVs are on track to constitute approximately 20% of light duty vehicle sales by 2030. That is not enough. These states have created an effective model for deployment of ZEVs, it now needs to be scaled up, and the training wheels — i.e., the flexibility mechanisms — must come off. An aggressive federal clean vehicle mandate, at the level of ambition demanded by science-based climate targets, would require at least 50% of all light duty vehicle sales be ZEVs by 2030, and 100% be ZEVs by 2050. A serious challenge? Yes. Impossible? No, it’s been done already. In September 2018, 60% of the light duty vehicles sold in Norway were ZEVs (45% were full battery electric vehicles, and 15% were plug-in hybrid electric vehicles).
Investing in Clean Vehicle Infrastructure
A mandate for increased sales of clean vehicles will require a similarly broad deployment of infrastructure for their charging or fueling (in the case of hydrogen fuel cells). Unsurprisingly, California has led the way in the investment in home, business and public clean vehicle infrastructure by providing grants and rebates paid for with revenues from its cap-and-trade system for greenhouse gas emissions.
However, what is most relevant here is California’s lead role in negotiating the 2016 Volkswagen diesel emissions cheating scandal settlement. Through this settlement, California and other states, in partnership with the federal government, required Volkswagen to make a $2 billion investment in electric vehicle charging infrastructure ($800 million in California, $1.2 billion across the rest of the country). Volkswagen created a subsidiary, Electrify America, to build a network of nearly 1,000 fast-charging stations approximately every 70 to 120 miles along major highways, and in major metropolitan areas. Electrify America is also investing in thousands of additional chargers at workplaces, retail centers and multi-family housing complexes.
But this Electrify America investment, significant and unprecedented as it is, is insufficient. To meet the demand for public, outside-the-home charging for the 50% of light duty vehicles being sold by 2030, the federal government must support a large-scale investment in ZEV infrastructure, with a focus on equitable access for low-income communities, people in multi-family housing, and rural areas. This would translate to $20 billion over 10 years for electric charging infrastructure across the country (double McKinsey & Co.’s cost estimates of $10 billion for a 20 million charger network to support ZEVs if they were 14 to 28% of light duty vehicle sales in 2030). The federal government should also invest an additional $10 billion over 10 years to support 5,000 hydrogen fueling stations for fuel cell vehicles, trucks and buses.
Creating Livable, Walkable Communities
Cleaning up the cars that people drive is only part of the story; states are also finding innovative ways to get people out of their cars altogether. High speed rail and new or expanded subway lines may get most of the headlines — often due to their enormous price tags. But some of the most impactful new policies and programs are not huge new infrastructure projects, but are about redefining our relationship with our existing infrastructure, and in particular the street beneath our feet. Leading states are recognizing that streets are not there just to serve the single-passenger vehicle. Instead, a well-designed street can serve all members and all users in a community — the pedestrians, bikers, and transit riders; the young and the old; the able-bodied and physically challenged; the rich and the poor — in ways that are safer, healthier and reduce greenhouse gas emissions.
Thirty-three states, the District of Columbia and Puerto Rico — and over 1,300 cities, counties and regions across the United States — have adopted “complete streets” policies. These programs aim to redefine the planning, design, construction, operation, and maintenance of our transportation systems to reflect what people want, and improve access to public places and key destinations (work, shopping, school, etc.) within a community. New complete streets designs like those found in communities throughout Oregon, Massachusetts and California elevate the role of pedestrians, bikers and transit riders, incorporate greenspace and natural features, and find the appropriate place for cars and parking. This approach ensures safe access for all users, makes it easier to cross the road or ride a bicycle to work or shopping, helps buses run on time, and integrates intercity transit stations with the surrounding community. The increased foot and bicycle traffic from complete street investments also creates a measurable bump in local economic activity.
Though relatively cheap compared to a high speed rail line or subway extension, these planning efforts and investments in bike lanes, bus stops and green infrastructure are not free. A good start for federal support of these state and local efforts would be a bill recently introduced in Congress by Senator Ed Markey, of Massachusetts, and Representative Steve Cohen, of Tennessee — the Complete Streets Act of 2019. This act requires states to set aside 5% of their federal highway funding dollars for grants to fund the design and construction of complete streets projects. For reference, federal spending on highways was roughly $50 billion in 2017. So the Complete Streets Act, if it was in place at the time, would have created $2.5 billion in complete streets projects across the country. Investing $2.5 billion per year for 10 years in local-level decarbonization of transportation through complete streets would make a real difference in communities large and small across the country.
Transforming the Foundation of Public Transit
The bus — not the high speed rail or subway — forms the foundation of public transit in most communities, and there are huge opportunities to improve these vehicles that travel closest to where were walk, live and breathe. States like Rhode Island have led the way in deploying electric buses — often using funds they received from the Volkswagen diesel emissions cheating scandal to make up the cost difference between an electric bus and a traditional diesel bus. Deploying electric buses in urban areas is a great example (one of many) of a decarbonization effort that has significant public health benefits. Electric buses reduce particulate matter and smog-forming compounds in urban areas — the areas most likely to be suffering from bad air, and whose populations are more likely to suffer from asthma or respiratory illness.
Electric buses cost almost twice their diesel counterparts (approximately $750,000 per electric bus, compared to $435,000 for diesel), though one would anticipate as demand grows and battery prices fall, the difference between the two will shrink. Currently, the Federal Transit Administration spends $580 million a year on traditional diesel buses through its Bus and Bus Facilities grant program, and only about $84 million on its Low or No-Emission (Low-No) Bus grant program. The federal government can make a large difference here by mandating that the Federal Transit Administration repurpose all of those existing annual grant funds towards electric buses, plus dramatically expand the total federal investment in zero-emission buses and support infrastructure to $4 billion per year. Combined with these grant funds’ usual 20% local match, this concerted federal effort would rapidly decarbonize the 65,000 buses in the nation’s transit bus fleet in 10 years.
Empowering Electric Utilities to Enable Clean Mobility
A dramatic shift in where the energy for transportation comes from — from oil to electricity — will cause dramatic shifts in the role of electric utilities. Global electricity demand from electric passenger vehicles, public transit, goods movement, and other transportation-sector components could reach 2,300 terawatt-hours by 2040 — which is more than 6% of current global electricity usage. This represents a huge opportunity for electric utilities, at a time when overall demand is flat or falling due to efficiency improvements, if they are nimble enough, and empowered to embrace this new role as a mobility enabler.
States have pioneered new regulatory models for electric utility participation in the build-out of ZEV infrastructure, to ensure that these utilities are part of the solution to a complex problem. If done right, the potential benefits to the electric grid and ratepayers from increased plug-in electric vehicle load are substantial (particularly if that electric grid is increasingly decarbonized along the path described in Part II).
Global electricity demand from transportation represents a huge opportunity for electric utilities, if they are nimble enough and empowered to embrace a new role as a mobility enabler.
More electricity demand actually reduces all customer rates by spreading fixed distribution and maintenance costs over more customers. ZEVs are mobile battery storage devices, which can help integrate intermittent renewables, for example by charging during peak solar production midday. ZEV batteries can also discharge back to the grid in the late afternoon and early evening to help shave peak loads. Utilities are in a unique position to facilitate the control of these valuable resources, through a smart grid and smart charging infrastructure, and rate structures that incentivize vehicle charging at times that provide grid benefits.
Utilities are also in a good position to know the strengths and weaknesses of their distribution grid, and coordinate electric vehicle charging infrastructure development with their broader system investments to ensure grid reliability. Electric utilities also, as part of their public purpose, can help ensure that everyone has access to charging infrastructure, and traditionally disadvantaged communities see increased clean mobility.
States and their utility regulators have been at the forefront of experimenting with the new role of electric utilities in clean mobility. In some instances, such as for high-voltage direct current fast-chargers, the utility may end up building and owning the entire system. This approach will fully leverage the utilities’ expertise in building infrastructure, and their access to low cost capital, for faster and wider deployment of high-speed charging infrastructure. But utility ownership may come at the cost of stifling private competition.
In other circumstances, utilities may directly invest in some of the infrastructure, and then provide rebates or other incentives to encourage charging infrastructure development where it is needed most. Those utility incentives may target investment in low- and moderate-income communities that might otherwise see insufficient private investment in charging infrastructure. Or the utility incentives may target sites on the electric distribution grid that are best suited to handle the additional load.
One thing is certain: The utility and private-sector build-out of charging infrastructure must be coordinated with other programs to help overcome barriers to ZEV ownership, such as electric car-sharing programs or rebates and grants that help low- and moderate-income households reduce the initial high cost of purchase. Again, states have shown leadership in coordinating utility and public policy programs to improve access to clean mobility for all. In Oregon, for example, Pacific Power recently worked with state and local officials to supply charging infrastructure for an electric vehicle car-sharing program at an affordable housing location in Portland.
As laid out in Part II, the new FERC, with climate change and decarbonization as central parts of its mandate, must do everything in its power to ensure that utilities are part of the clean transportation revolution.
Most of the proposals in this series — whether they be for decarbonizing transportation, transforming the electric grid, or generating renewable energy — would require funding on the order of billions of dollars. The next installment concludes the “Look to the States” series by examining the implications of this hefty price tag for decarbonization. How will we pay for these investments? Are they worth the cost? And, can a deeply divided political system come together to make it all happen?
1 In September 2019, the Trump administration announced its intent to revoke California’s authority under the Clean Air Act to set more stringent emissions standards. Twenty-three states sued to block this attempt to roll back California’s strict vehicle pollution rules. Despite (or perhaps because of) the legal battle, Minnesota and New Mexico have announced that they will become the 11th and 12th states join the California ZEV mandate over the next year.