Clean Vehicles Versus Vehicle Travel Reductions: Better Transportation Emission Reduction Planning

There are many possible ways to reduce transportation emissions, some of which provide large co-benefits. Unfortunately, current evaluation practices tend to overlook some of the best. Lets examine why.

August 30, 2021, 12:00 PM PDT

By Todd Litman


14th Street Traffic

Aram Vartian / Flickr

The Intergovernmental Panel on Climate Change’s recent “Code Red” report highlights the urgency of reducing greenhouse gas emissions. "The internationally agreed threshold of 1.5°C is perilously close. We are at imminent risk of hitting 1.5°C in the near term. The only way to prevent exceeding this threshold is by urgently stepping up our efforts and pursuing the most ambitious path."

Since transportation activities generate the largest share of greenhouse gas (GHG) emissions, transportation professionals have a critical role in identifying the most effective and overall beneficial emission reduction strategies; our role is similar to an emergency medicine team. The good news is that many jurisdictions are now establishing ambitious emission reduction targets. For example, President Biden recently established a target to reduce U.S. GHG emissions 50-52% by 2030. The even better news is that there are many cost effective transportation emission reduction strategies The bad news is that current evaluation practices tend to overlook and undervalue some of the best. My new report, Comprehensive Transport Emission Reduction Planning – Guidelines for Evaluating Transportation Emission Reduction Strategies examines why this occurs and how to correct it. Let me summarize this research.

Clean Vehicles versus Vehicle Travel Reductions

Most transportation emission reduction strategies can be categorized as either clean vehicle strategies that reduce per-mile emission rates, or vehicle travel reduction strategies that reduce total vehicle travel, as summarized below.

Examples of Emission Reduction Strategies

Clean Vehicles

Vehicle Travel Reductions

Technologies and policies that reduce emission rates per vehicle-mile

TDM and Smart Growth policies that reduce total vehicle travel

  • Shifts to more efficient and alternative fuel vehicles (e.g., hybrid, electric and hydrogen).
  • High emitting vehicle scrapage programs.
  • Efficient driving and anti-idling campaigns.
  • Switching to lower carbon and cleaner fuels.
  • Inspection and maintenance programs.
  • Resurface highways.
  • Roadside “high emitter” identification
  • Increase fuel prices
  • Multimodal planning (improve walking, bicycling, public transit, ridesharing, etc.)
  • Smart Growth policies that create more compact and multimodal communities.
  • transportation demand management programs (commute trip reduction, freight transport management, etc.)
  • More efficient road, parking and vehicle pricing.
  • Vehicle parking policy reforms.
  • Increase fuel prices

Clean vehicles reduce per-mile emission rates. Vehicle travel reductions reduce total motor vehicle travel. Fuel price increases help achieve both.

Better Analysis 

Which emission reduction strategies are most effective and beneficial overall? That depends on how they are analyzed. My report reviewed the assumptions and evaluation methods used in more than a dozen emission reduction plans. I found many are biased in ways that tend to exaggerate the benefits of clean vehicle strategies, and undervalue vehicle travel reduction strategies. Let me describe these.

Unrealistic Fleet Turnover Predictions

Many emission reduction plans assume that electric vehicles can quickly replace fossil fuel vehicles using overly optimistic fleet turnover predictions. 

Since only about 5% of vehicles are replaced each year, it takes decades for new technologies to fully penetrate a fleet unless many operable vehicles are scrapped prematurely. Electric vehicles currently represent less than 2% of new vehicle sales.

Optimistically, half of new vehicles could be electric by 2030, but realistically it will probably take longer, and because the development of electric SUVs and light trucks is particularly slow, the remaining fossil fuel vehicles will skew to low fuel economy. With current policies, the fleet is unlikely to be fully electric by 2050, as illustrated below.

Optimistic and Realistic Electric Vehicle Sales and Fleet Penetration

Electric vehicle market penetration

Rebound Effects

Because cleaner vehicles generally have lower operating costs they tend to increase total vehicle travel and associated costs. For example, electric cars cost are about half as much to operate as a comparable fossil fuel car, which typically increases vehicle-miles 10-30%. This is called a rebound effect, and the additional vehicle-miles are called induced vehicle travel. Although there are still net emission reductions—a 10-30% rebound effect leaves 70-90% net savings—the induced travel increases congestion, infrastructure costs, crashes, and sprawl-related costs. The additional travel provides user benefits, otherwise motorists would not drive more miles, but these tend to be modest since the additional travel consists of marginal-value vehicle-miles that users are most willing to forego if their costs increase.

High Costs of Cleaner Vehicles

Electric vehicles currently receive various subsidies, as summarized in Table 2. Since a typical gasoline car produces about seven annual tonnes of carbon, compared with five for a hybrid and two for an electric car, vehicle electrification emission reductions cost $100-400 per tonne, which is higher than many other emission reduction strategies. These may decline somewhat as electric vehicle technology improves, but until a vehicle-miles tax is applied to electric vehicles they will continue to receive approximately $300 annual subsidy in avoided road user taxes, representing approximately $60 cost per ton of emissions reduced.

Typical Electric Vehicle Subsidies

Subsidy

Annual Value

Corporate Average Fuel Economy (CAFE) credits ($4,700 over 15 years)

$313

Purchase subsidy ($5,000 over a 15-year vehicle life)

$333

Electric vehicle recharging stations (50 free annual recharges costing $2.50)

$125

Road user fee exemption (12,500 annual miles, 20 mpg, 50₵ tax per gallon)

$310

Total Annual Subsidy

$1,081

Electric vehicles receive various subsidies that currently total more than $1,000 per year.

Lifecycle Emissions

Many plans exaggerate clean vehicle benefits by ignoring emissions embodied in vehicle and electricity production. Hybrids typically reduce emissions by a third, and electric cars by two-thirds, compared with typical fossil fuel cars, as illustrated below. This is good, but it is an exaggeration to call them "zero emission" vehicles.

Life-cycle GHG Emissions

Life-cycle GHG Emissions

In addition, automobile transportation and the sprawl they increase emissions by increasing road and parking infrastructure requirements, along with their embedded emissions, and by displacing emission-sequestering forests.

Outdated Transportation Models

Emission reduction plans use transportation models to predict how a policy will affect vehicle travel and emissions. Many of these models are outdated and inaccurate. For example, a major study, Impacts of Land Use and Pricing in Reducing Vehicle Miles Traveled, predicted that a 25₵ per mile VMT fee, equivalent to a $5 per gallon fuel tax, would only reduce affected vehicle travel 15%. It explains, "This is due to the low price-elasticity of vehicle travel demand – a known feature of travel behavior that can be attributed partially to the lack of competitive alternative modes of travel in much of the region."

Such low elasticity values are based on studies performed in the United States during the last quarter of the 20th Century, when employment rates and wages were increasing and fuel prices were relatively low. More recent studies indicate that vehicle travel is two or three times more price sensitive than older models assume. Older models also underestimate the vehicle travel reductions provided by transportation demand management (TDM) and Smart Growth policies. For example, if an older model predicts that a price change will reduce vehicle travel 5%, the actual long-term impact is likely to be 10-15%. Similarly, if it predicts that electric vehicles will be driven only 10% more annual miles than comparable fossil fuel vehicles, the true rebound effect is probably 20-30%.

Scope of Vehicle Travel Reduction Strategies Considered

Most emission reduction plans consider a limited set of vehicle travel reduction strategies, and omit some of the most effective. They often include active and public transport improvements, vehicle sharing, telework, and sometimes road pricing and transit-oriented development, but few include comprehensive multimodal planning, efficient transportation pricing (including parking, insurance and registration fees), comprehensive Smart Growth policies, and targeted travel reduction programs.

Additional Impacts and Co-Benefits

Cleaner vehicles conserve fossil fuel and reduce emissions but provide few other benefits, and by inducing additional vehicle travel they can increase external costs such as congestion, infrastructure cost, crashes and sprawl-related costs. Because they and their infrastructure are costly and require large subsidies that could instead, be invested in non-auto modes, they reduce overall affordability and contradict social equity goals. In contrast, vehicle travel reductions and Smart Growth provide a far greater range of economic, social and environmental benefits. By improving walking, bicycling, public transit, vehicle sharing and affordable infill housing options, vehicle travel reduction programs tend to provide large affordability and social equity benefits. Few emission reduction plans consider all of these impacts; as a result, they undervalue vehicle travel reduction strategies.

Latent Demand for Multimodal Lifestyles

Some emission reduction plans assume that most people want to live automobile-dependent lifestyles, so vehicle travel reductions harm consumers and are difficult to implement. There are good reasons to be skeptical of such claims. Surveys indicate that many North Americans would like to drive less, rely more on non-auto modes, and live in more multi-modal communities, provided that these alternatives are convenient, comfortable and affordable. TDM and Smart Growth respond to those demands. There are many examples of integrated TDM and Smart Growth programs that provide large travel reductions and benefits, including user cost savings, public health, community livability, and fun.

Comparing Impacts

The figure below compares potential emission reductions provided by vehicle electrification and vehicle travel reductions. Fleet electrification will take decades, and considering emissions embodied in vehicle and fuel production, plus rebound effects, only reduces a vehicle’s emission about 70%.

A set of cost-effective TDM and Smart Growth policies can reduce North American per capita vehicle-miles by 40% or more, comparable to peer countries such as Germany, Norway, and Sweden. Many of these strategies can be implemented quickly, and reducing total vehicle ownership and sprawl provides indirect as well as direct emission reductions.

Comparing Emission Reductions

Emission Reduction Predictions

This analysis indicates that both vehicle electrification and vehicle travel reductions are needed to achieve ambitious emission reduction targets. Because of the 15-20 year lag between new vehicle market penetration and total vehicle fleet penetration, vehicle electrification cannot provide significant emission reductions before 2040. In contrast, many TDM and Smart Growth policies can be implemented quickly, providing earlier and more total emission reductions during the three-decade period.

Summary and Recommendations

The table below summarizes various planning biases, their impacts, and ways to correct them.

Comparing Impacts 

Planning Bias

Impacts

Corrections

Exaggerates the speed of clean vehicle market penetration.

Overestimates clean vehicle impacts and benefits.

Use realistic predictions of clean vehicle fleet penetration.

Use of outdated travel models that underestimate travel impacts.

Underestimates clean vehicle rebound effects, and undervalues vehicle travel reductions.

Use newer and better modes for predicting travel impacts.

Overlooks embodied and upstream emissions

Overestimates clean vehicle emission reductions and benefits.

Apply lifecycle analysis that accounts for all emissions.

Ignores rebound effects (increased travel by clean vehicles), and the increased external costs that result.

Overestimates clean vehicle benefits and underestimates their community costs.

Account for rebound effects and the additional external costs that result.

Failure to account for all clean vehicle subsidies, and compare them with other emission reduction strategies.

Underestimates clean vehicle costs and regressivity.

Estimate and compare unit emission reduction costs (dollars per tonne of emission reductions).

Only considers a limited and ineffective set of vehicle travel reduction strategies.

Undervalues TDM and Smart Growth impacts and benefits.

Consider a broad range of potential vehicle travel reduction strategies.

Overlooks TDM and Smart Growth co-benefits, besides emission reductions.

Undervalues TDM and Smart Growth benefits.

Account for all significant co-benefits.

Assumes that TDM and Smart Growth harm consumers and are unpopular.

Undervalues vehicle travel reduction impacts and benefits.

Consider consumer preferences for more multimodal lifestyles.

Current emission reduction planning practices are biased in ways that tend to exaggerate clean vehicle benefits and undervalue TDM and Smart Growth strategies. These can be corrected.

Other recent publications also conclude that vehicle travel reduction strategies provide greater benefits than commonly recognized. For example, a New York Times article "There’s One Big Problem with Electric Cars. They’re Still Cars," highlights problems caused by automobile traffic. A New Scientist article, "Electric Cars Won't Shrink Emissions Enough - We Must Cut Travel Too," argues that vehicle travel reductions are needed to achieve emission reduction targets. A Rocky Mountain Institute study, "Our Driving Habits Must Be Part of the Climate Conversation," concludes that the United States must reduce vehicle travel by 20% to limit global warming to 1.5°.

Conclusions

Many jurisdictions and organizations have ambitious emission reduction targets and are developing plans to achieve them. My research indicates that the analysis methods used to develop those plans are often biased in ways that exaggerate the benefits of clean vehicles (hybrid, electric and hydrogen), and undervalue TDM and Smart Growth strategies. Many plans assume that clean vehicle policies are more effective, cost effective, fast, reliable, and popular than vehicle travel reductions. There are good reasons to question those assumptions.

Because of the 15-20 year lag between changes in new vehicle purchases and changes in the overall vehicle fleet, clean vehicles can provide little emission reductions before 2040, and considering vehicle and electricity production emissions, plus rebound effects, clean vehicles only reduce emissions by 60% to 80%; it is inaccurate to describe them as having “zero emissions.”

Integrated TDM and Smart Growth strategies could reduce emissions by 20% within a decade and 40% by 2050, are very cost-effective overall, and provide numerous co-benefits. Although few motorists want to give up driving altogether, surveys indicate that many would like to drive less, rely more on alternative modes, and live in more walkable communities, provided that they are convenient, safe and affordable; TDM and Smart Growth respond to those demands, making consumers better off overall.

This study suggests that to be efficient and equitable, transportation emission reduction plans should rely at least as much on vehicle travel reductions as on clean vehicle strategies, with particular emphasis on "quick win" strategies that can be implemented in a few years.

There is a positive message here. With better analysis we can identify emission reduction strategies that also help achieve other economic, social and environmental goals. Everybody wins!

For More Information

Jonn Axsen, Patrick Plötz and Michael Wolinetz (2020), “Crafting Strong, Integrated Policy Mixes for Deep CO2 Mitigation in Road Transport,” Nature Climate Change.

Austin L. Brown, et al. (2021), Driving California’s Transportation Emissions to Zero, Institute of Transportation Studies.

Kevin Fang and Jamey Volker (2017), Cutting Greenhouse Gas Emissions is Only the Beginning: A Literature Review of the Co-Benefits of Reducing Vehicle Miles Traveled, National Center for Sustainable Transportation.

Allen Greenberg and Jay Evans (2017), Comparing Greenhouse Gas Reductions and Legal Implementation Possibilities for Pay-to-Save Transportation Price-shifting Strategies and EPA’s Clean Power Plan, Victoria Transport Policy Institute.

He Pou a Rangi (2021), Draft Advice for Consultation, New Zealand Climate Change Commission.

ICAT (2020), ICAT Toolbox: Policy Assessment Guidelines, Initiative for Climate Action Transparency.

ITF (2021), Transport Climate Action Directory, International Transport Forum (www.itf-oecd.org).

Todd Litman (2020), Are Vehicle Travel Reduction Targets Justified?, Victoria Transport Policy Institute.

Farhad Manjoo (2021), “There’s One Big Problem with Electric Cars. They’re Still Cars,” New York Times.

Carlton Reid (2021), “Don’t Despair Over Climate Report’s Horrors, There Are Fixes — But Electric Cars Not One of Them,” Forbes.

Street Smart is a clearinghouse that provides information for integrating climate change, public health, and equity concerns into transport planning.

SUM4All (2019), Catalogue of Policy Measures Toward Sustainable Mobility, Sustainable Mobility for All. 

TfA and SGA (2020), Driving Down Emissions: Transportation, Land Use and Climate Change, Transportation for America.

Vancouver (2020), Climate Emergency Action Plan, City of Vancouver.

Adam Vaughan (2019), Electric Cars Won't Shrink Emissions Enough - We Must Cut Travel Too,” New Scientist (www.newscientist.com); at https://bit.ly/3b3Kyh5.

Kea Wilson (2021), Biden’s Climate Vision is Too Focused on EVs — Again, StreetsBlog USA.

Brian Yudkin, et al. (2021), Our Driving Habits Must Be Part of the Climate Conversation, Rocky Mountain Institute.


Todd Litman

Todd Litman is founder and executive director of the Victoria Transport Policy Institute, an independent research organization dedicated to developing innovative solutions to transport problems.

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