State Transportation Budget Could Address Emissions Issues

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March 21, 2019

Recognizing that strategies to reduce carbon emissions can also generate win-win outcomes for the economy, states and cities across the nation are stepping up to curtail these emissions.

Ohio’s Legislature took a step in the same direction when the House passed the 2020-2021 transportation budget, which tonight passed the Senate. The two versions must be reconciled by the Legislature before March 31.

The House’s proposed budget more than doubled the state’s current funding for public transit — key for economic development and gasoline emission reductions — to $100 million each of the next two years; the Senate lowered that amount to $55 million.

Both transportation budget bills propose annual registration fees for alternative fuel vehicles:  The House version would cost $200 on a plug-in electric motor vehicle and $100 on a hybrid motor vehicle; the Senate version's fees are $175 and $75, respectively. Since these owners would not pay the same tax as conventional vehicle owners, the logic goes that these additional fees are justified and needed to generate the necessary infrastructure funding. While it is true that EVs rely on the same transportation infrastructure as conventional gasoline vehicles, charging an additional fee of EV owners at a time when we need to incentivize more EV adoption would be foolish, particularly given the potential elimination of the EV tax credit from the 2020 federal budget. Such a fee makes sense only in the future when the cost and convenience of driving EVs are commensurate with conventional gasoline vehicles.

Without additional transportation options that can compete with the price and convenience of conventional gasoline vehicles, the longer run effects of the proposed 10.7-cent-per-gallon -- lowered to 6 cents in the Senate's proposal -- increase in gasoline prices on gas consumption and vehicle travel will fall far short of the reductions in carbon emissions that are needed to avoid the most devastating impacts of climate change.

The immediate effect of higher gas prices on changing human behavior and purchases toward lower-emission options will be negligible. Over the course of several months to a year, most households do not dramatically change their gas consumption or purchases of vehicles that use less gasoline even with large increases or decreases in gas prices. The Energy Information Administration (EIA) estimates that, given a 10 percent increase in price, the average decline in gasoline demand is only about 0.2 percent. And researchers at Resources for the Future (RFF) estimate that a $1 increase in the price of gas per gallon from $2.50 to $3.50 would increase the average fuel economy of all new vehicles purchased in the short run by only 0.26 miles per gallon.

Carbon emissions from the transportation sector generated 28.5% — the largest share of any sector — of total greenhouse gas emissions in the U.S. in 2016, according to the EPA. As the integration of renewable resources into the electricity grid grows over time, replacing conventional gasoline vehicles with electric vehicles is a critical part of reducing overall carbon emissions and transitioning to a low-carbon economy.

While the gasoline tax hike in the budget proposal will enable some of the infrastructure investments needed to make Ohio communities more resilient and sustainable, the opportunity also exists to invest in other mobility options that will reduce carbon emissions and spur future economic growth. These investments are essential to ensure Ohio’s transition to a vibrant, low-carbon economy in which multiple coordinated forms of transportation provide efficient, sustainable and healthy mobility choices for residents and businesses.

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