Cutting petroleum use and greenhouse gas (GHG) emissions in all of America’s cars and light trucks is a critical but daunting task. Now, a new MIT report outlines a set of policies that could accomplish that goal in the next few decades. Working together, the policies would give all stakeholders incentives to do their part.
Manufacturers would be required to make more fuel-efficient cars, and consumers would be encouraged to buy them and then drive them in a fuel-efficient manner. Meanwhile, the nation would develop a comprehensive strategy on fuels setting long-term targets, with care taken to account for the life-cycle emissions as well as production, distribution, and vehicle requirements for each possible fuel.
“If we’re serious about reducing petroleum consumption and GHG emissions, we need to look at the whole system—at everyone who makes, buys, and uses vehicles and their associated fuels,” says John Heywood, professor in MIT’s Department of Mechanical Engineering. “All the pieces are interrelated, and we need them to work together. For example, tighter regulations can push industry toward higher fuel economy, but then we need to create incentives for consumers to buy those cars, which may be smaller, lighter, and more expensive than they’re used to.”
For policy makers in Washington, taking a systems view is difficult because of the politics involved. Interest groups are constantly converging or diverging into separate camps and lobbying for separate policies. The result, says Heywood, is confusion in the policy debate and adoption of isolated initiatives that focus on specific fuels, car technologies, and so on.
To help demonstrate how a systems approach could work, Heywood turned to ten of his graduate students in the Sloan Automotive Laboratory, each of whom is immersed in studying some aspect of the transportation problem—from selected technology and fuels options to consumer behavior to the impacts of specific policies and more. A year ago, Heywood issued this group a challenge: drawing on their individual knowledge and expertise, they should together come up with a sensible, effective, and realistic policy portfolio—an “Action Plan for Cars.”
The students held a series of meetings, and ultimately each participant contributed to one section of the report, drawing on his or her own experience supplemented by information from other transportation and energy sources. Guided by Heywood and feedback from several outside experts, graduate students Valerie Karplus and Donald MacKenzie of MIT’s Engineering Systems Division integrated the sections into a 24-page document that outlines a set of interacting policies that the MIT team believes can significantly reduce petroleum use and emissions in America’s cars and light trucks.
The first group of policies aims to reduce the fuel consumption of new vehicles. The report recommends that the Corporate Average Fuel Economy (CAFE) standards for the fuel economy of new cars continue to tighten—well beyond the 2016 target of 34.1 mpg—and that manufacturers be given ample lead time to plan for those increases. Two other policies would create consumer incentives. One would establish a “feebate” system under which buyers of new cars would get a rebate if they chose fuel-efficient models—or pay a fee if they went for gas-guzzlers. The exact payment would depend on how many miles per gallon the purchased model is above or below a set fuel economy. The other policy in this group would increase taxes on motor fuels by 10 cents per gallon each year for at least the next ten years.
Those three policies would produce a synergistic effect, with manufacturers producing more-efficient cars and consumers demanding them, motivated by immediate and long-term savings. To make rising fuel taxes more palatable, drivers would see reductions on their income taxes or payroll taxes. But some of the revenue would be used to improve the U.S. transportation infrastructure. “Our roads and bridges are in real need of maintenance and improvement,” says Heywood. “This would provide much-needed money to get them back in shape.”
The next pair of policies is designed to help consumers buy and drive more wisely by giving them more information. Although labeling provisions exist, it is not always clear what the cited ratings mean. In general, the fuel economy listed on stickers or in advertisements is for highway driving, when most vehicles are at their most fuel-efficient. New rules should call for a clear presentation of fuel economies for both highway and city driving so that car buyers can make a more informed choice.
The second policy aims to teach people how to avoid driving behaviors that waste fuel. Driving at a steady, comfortable speed and avoiding rapid braking and accelerating can reduce fuel use by 10% or more compared with more aggressive driving behaviors. “Perhaps it isn’t a glamorous way to reduce consumption, but it’s relatively low cost—and it’s scalable,” says Karplus. “Every driver on the road can do it. They’ll use less fuel, save money, and reduce emissions, all at the same time.” Information can be distributed in advertisements and incorporated into drivers’ education programs so that new generations of drivers will develop fuel-conserving habits.
The final set of recommendations focuses on fuels. Heywood notes that current initiatives, laws, and requirements are “piecemeal,” with no coherence or clear sense of purpose. However, he also believes that it is “inappropriate and premature to say something about how specific fuels are being treated or should be treated—with subsidies, import duties, and so on. We’re missing a lot of basic information.” The team’s recommendations therefore take a broader view of how to move forward on the fuels side.
After intense discussion and debate, the MIT team reached consensus on three critical points. First, all transportation fuels—petroleum-based as well as alternative fuels—should be evaluated on the basis of their full life-cycle GHG emissions. “While that may seem obvious, the devil is in the details on this one,” says Karplus. She cites several examples. Growing biofuels in place of food crops in Iowa may push up food imports from Brazil, where the need for added agricultural land could lead to destruction of rainforest, an important carbon sink. Electric vehicles emit no tailpipe emissions, but recharging their batteries may increase electricity generation from GHG-emitting power plants. “And the list goes on,” says Karplus. “If we’re really looking for ways to reduce GHG emissions, we have to be careful about how we do the accounting.”
The second recommendation calls for developing a coordinated national strategy for alternative fuels. This high-level, overarching strategy should define clear targets and then—based on careful consideration of all the options—identify fuels and technologies that can best contribute to meeting the goals of displacing petroleum and reducing GHG emissions. Developing a successful strategy will require full participation of the now-splintered interest groups that support biofuels, electric cars, hydrogen, natural gas, and so on.
Finally, any national fuels strategy should include policies that address the need for developing fuel production capacity, distribution infrastructure, and compatible vehicles at the same time. Focusing on only one or even two of those challenges will not yield the intended reductions in petroleum use and emissions. In addition, current subsidies, mandates, and import tariffs (for example, on ethanol) should be examined to make sure that they are consistent with the national fuels strategy.
Heywood stresses that the new report does not attempt to write specific legislation or regulation or to define end objectives too tightly because we need to better understand the full impacts of our choices. The report is instead meant to demonstrate a set of integrated policies that can help us “define where we want to get to, decide whether a given path shows potential for getting us there, and then plan so that we can both get moving and get wiser.”
“We’re hoping our report serves as a first step, a starting point to spur thinking about how you can achieve policies that are going to work together in a synergistic way,” adds Karplus. “We aren’t necessarily saying to adopt this set of policies exactly as written, but we’re demonstrating how Washington can think about policies in a way that considers how they might best work together.”
This study was supported in part by the MIT Energy Initiative. Go to http://web.mit.edu/mitei/research/studies.html to download a copy of An Action Plan for Cars: The Policies Needed to Reduce U.S. Petroleum Consumption and Greenhouse Gas Emissions.