The Antiplanner’s Library: Climate-Constrained Transportation

Smart-growth advocates say we must reduce the growth of driving to meet greenhouse-reduction targets, because otherwise driving growth will exceed the per-mile reductions in emissions that result from technological improvements. This argument is refuted by four MIT researchers in a new book on highway and air transportation.

The flaw in the reasoning of the smart-growth advocates is that they look no further than the fuel-economy (CAFE) standards set by the Energy Independence& Security Act of 2007, which required automakers to sell cars averaging 35 mpg by 2020. The MIT researchers go far beyond that, considering alternative engines, vehicle designs, materials, and fuels. They also look at the bigger picture, asking what is the cost-effective share of emission-reduction targets that should be met by passenger transportation. (They don’t say much about freight.)

Though the book contains a lot of data, it unfortunately does not actually present enough information to allow readers to estimate the cost-efficiencies of alternative technologies. Instead, the authors say they have done this in a computer model of the entire national economy. But their tendency to dismiss some alternatives with little comment makes me worried that their “black box” computer model might not have all the possible alternatives.

For example, they consider the substitution of aluminum for steel in automobiles, which they say is marginally cost-effective. Then they add that even lighter-weight autos could be built by substituting carbon fiber for steel or aluminum, but — without much data — dismiss this as not cost-effective (p. 127).

Another policy they pretty much dismiss is congestion pricing as a way of reducing congestion-related emissions. They seem to think there are too many political obstacles for this to happen, yet it is happening in many cities. Economists should compare a full range of policies and not ignore some because they think they aren’t politically feasible.

They also ignore policies that the Antiplanner doesn’t like. They don’t analyze rail transportation or any form of mass transportation other than commercial aircraft. This is appropriate considering that rail is insignificant as a form of passenger transport in the U.S., but inappropriate given all the attention paid to rail by the planners and politicians.

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One of the most interesting tables in the book estimates that, relying on markets alone, new cars built in 2030 will average about 42 mpg (pp. 132-133). Modest government regulation or subsidies encouraging aluminum instead of steel and full hybrid-electric motors could easily boost this to 69 mpg. Substituting Diesel for gasoline engines could increase this further to 85 mpg, nearly triple today’s new cars. This is clearly enough to overwhelm any increases in driving between now and 2030.

An even more interesting table compares total passenger transportation-related emissions in 2050 under several different scenarios (p. 263). For reference, they say passenger transport produced 1.6 billion tons of CO₂-equivalent gases in 2005. With no changes in technology, they estimate this would increase to 3.1 billion tons by 2050.

Of course, technology is changing, and they estimate that market-driven changes would result in 1.45 to 1.73 billion tons in 2050 — roughly the same as 2005. In other words, without any government interference, technological improvements will pretty much offset increases in driving between 2005 and 2050.

What if government policies, such as a carbon tax (which they prefer over CAFE standards), were designed to find the most cost-effective reductions needed to keep atmospheric CO₂-equivalent below 550ppm? In this case, they find that implementing such policies would result in passenger transport emissions of 1.25 to 1.66 billion tons — in other words, only 4 to 14 percent less than the market-driven result.

This is because the emissions from other sources — notably electrical generation plants — can be reduced at a much lower cost than emissions from transportation. As they put it, “passenger transport is less responsive to fuel prices or emissions penalties than many household, commercial, and industrial end users” (p. 223).

In a world of limited resources, it makes no sense to expect that transportation should achieve the same percentage reduction in emissions as other sources. “Should a family be more heavily penalized for demanding more interior room in its motor vehicle than in its home?” they ask–meaning that government regulation of transportation would have to be much stricter than of housing in order to attain equal reductions in GHGs from both.

While this book is far from the last word on the subject of climate-constrained transportation, it at least fills in some pieces of the puzzle. It shows that efficient and foreseeable improvements in auto technologies are going to have a significant effect on emissions even without government prodding. It finds that some government incentives, such as carbon pricing, can make cars even more efficient without making them less usable. But it also concludes that most greenhouse gas reductions should come from things other than passenger transportation.