Transportation, Energy, And Environmental Policy - Stanford University

Acknowledgments U nder the best of conditions, a publication such as this is the work of many people. This book draws on the efforts of many people, over many months. The VIII Biennial Asilomar Conference on Transportation, Energy, and Environmental Policy began on September 11, 2001. We will discuss the circumstances further in the Introduction. Here we simply observe that the conference could not be convened as planned. It required several months to complete in three steps: the first, an abbreviated meeting at Asilomar on September 11 and 12, 2001; then a session at the Annual Meeting of the Transportation Research Board in Washington, D.C. in January 2002 to present several papers originally scheduled for presentation at Asilomar; and, finally, several discussions to develop materials that would eventually be edited into the final chapter of these proceedings. The first step was the conference, hosted and organized by the Institute of Transportation Studies, University of California, Davis (ITS-Davis). It was held at the Asilomar Conference Center in Monterey, California, under the auspices of the National Research Council’s Transportation Research Board (TRB)—in particular, the Standing Committees on Energy and Alternative Transportation Fuels. Sponsors included the U.S. Department of Energy (USDOE), U.S. Environmental Protection Agency (USEPA), Ministry of Natural Resources Canada, ExxonMobil, Chevron, University of California Transportation Center, and Energy Foundation. The core members of the conference steering committee members were Debbie Adler (USEPA), Jack Johnston (ExxonMobil), Paul Leiby (Oak Ridge National Laboratory), Jason Mark (Union of Concerned Scientists), David Rodgers (USDOE), and Dan Sperling (UC Davis). ITS-Davis staff provided logistical and administrative support and services, under the direction of Shirley Long. The TRB session in Washington, D.C., was chaired by Danilo Santini (Argonne National Laboratory). The final chapter drew on the efforts of the Asilomar Conference attendees and presenters, as well as participants in other “agenda setting” discussions, including a chapter by Martin Lee-Gosselin (Université Laval) and Dan Sperling in TRB’s Special Report 268: Surface Transportation Environmental Research: A Long-Term Strategy, as well as chapters by Kevin Heanue (U.S. Department of Transportation), Dan Sperling (1), David Greene (Oak Ridge National Laboratory), and David Rodgers (USDOE) in another TRB publication, Conference Proceedings 28: Environmental Research Needs in Transportation (2). Each paper published in this volume was peer reviewed by at least two individuals. The peer review process was overseen by the editors and conducted with the cooperation of two TRB committees (the Standing Committee on Transportation Energy and the Standing Committee on Alternative Transportation Fuels). The two committee chairs—Marianne Mintz and Peter ReillyRoe, respectively—offered invaluable assistance in the organization of the conference and the peer review process. Many individuals participated in the three phases of the expanded “conference.” Under trying circumstances, those at Asilomar on September 11, 2001, convened a day-and-a-half of thoughtful and insightful deliberation on the topic of transitions in transportation energy. Following Dan Sperling’s opening remarks, Peter Brown and Lee Schipper presented papers under the theme of “Motivations and Forces for Change,” both of which appear in this volume. Mike Walsh then chaired a session on “Vehicle Technology and Fuel Options During iii

iv Transportation, Energy, and Environmental Policy: Managing Transitions Transition” that included presentations from Mark Delucchi, Robert Williams, David Greene, and Robert Moore. Chapters by Williams and Greene (see the chapter by Johnson, Greene, and Birky) are included here. The session titled “Lessons Learned, Transition Strategies and Policies” was chaired by Rob Chapman (Rand Corporation). It included presentations by Thomas White (USDOE) and C. J. Brodrick (UC Davis). Chapters based on both are included in this volume. It also included presentations by Robert Knight (Bevilaqua-Knight, Inc), Steve Plotkin (Argonne National Laboratory), David Greene, Tom Cackette (California Air Resources Board), and John DeCicco (Environmental Defense). Other chapters in this book are based on papers presented at the TRB session in January 2002, or otherwise included because they had been solicited for the original conference plan. These include the chapters by Farrell (Carnegie Mellon) et al., Elzen (Twente University) et al., Kågeson (Nature Associates), and Hayashi (Nagoya University) et al. While many people have contributed to this work, we the editors are solely responsible for any errors and omissions. The opinions expressed herein are not necessarily those of any sponsor or supporter of the conference or the production of these proceedings. REFERENCES 1. Special Report 268: Surface Transportation Environmental Research: A Long-Term Strategy. TRB, National Research Council, Washington, D.C., 2002. 2. Conference Proceedings 28: Environmental Research Needs in Transportation. TRB, National Research Council, Washington, D.C., 2002.

Contents Introduction to the VIII Biennial Asilomar Conference on Transportation, Energy, and Environmental Policy: Managing Transitions .1 Kenneth S. Kurani and Daniel Sperling, University of California, Davis Economics, Stewardship, and the Transportation Sector.16 Peter G. Brown, McGill University Sustainable Urban Transport in the 21st Century: A New Agenda .42 Lee Schipper, World Resources Institute Toward Zero Emissions for Transportation Using Fossil Fuels.63 Robert H. Williams, Princeton University Is the Barrell Half Full or Half Empty? Implications of Transitioning to a New Transportation Energy Future .104 Larry Johnson, Argonne National Laboratory David Greene, Oak Ridge National Laboratory Alicia Birky, National Renewable Energy Laboratory Transportation Transitions: What Can We Learn from the Ongoing Fuels Transition? .130 Tom White and Barry McNutt, U.S. Department of Energy A Strategy for Introducing Hydrogen into Transportation.142 Alexander E. Farrell, University of California, Berkeley David W. Keith, Carnegie Mellon University James J. Corbett, University of Delaware The Market for Fuel Cell Auxiliary Power Units for Heavy-Duty Diesel Vehicles: First Widespread Application of Fuel Cells in Transportation?.161 Christie-Joy Brodrick, Nicholas P. Lutsey, Daniel Sperling, and Harry A. Dwyer, University of California, Davis S. William Gouse, III, American Trucking Associations Managing the Transition to Sustainable Transport Through Strategic Niche Management.175 Boelie Elzen, Remco Hoogma, and René Kemp, Twente University

Assessment of European Initiatives to Reduce Fuel Consumption and CO2 Emissions .204 Per Kågeson, Nature Associates An Analysis of the Effects of Car and Fuel Taxes on CO2 Emissions in Japan and Germany.229 Yoshitsugu Hayashi, Hirokazu Kato, and Rene Val R. Teodoro, Nagoya University Research Agenda to Support Transitions in Transportation Energy.251 Daniel Sperling and Kenneth S. Kurani, University of California, Davis

Introduction to the VIII Biennial Asilomar Conference on Transportation, Energy, and Environmental Policy: Managing Transitions KENNETH S. KURANI DANIEL SPERLING Institute of Transportation Studies, University of California, Davis E very two years since the late 1980s, a mix of experts and leaders has gathered to discuss critical and emerging issues in transportation, energy, and the environment. The group includes a cross-section from government, industry, academia, and advocacy groups. Most are from the U.S., but international participation has grown over time. While some people have attended most or all of the meetings, new faces and perspectives emerge at each meeting. These conferences also serve as the mid-year meeting of the Energy and Alternative Transportation Fuels Committees of the Transportation Research Board of the National Academies of Science. The gathering takes place in late summer at the Asilomar Conference Center in Pacific Grove on the central coast of California. The center is a quiet California State Park set in a pine forest bounded by quiet residential streets and the Pacific Ocean. The center provides neither televisions nor telephones in the guest rooms. A short boardwalk across the sand dunes leads to a small beach. In September, the area is typically cloaked in fog in the morning, the grey mist shrouding the conference grounds from the world outside. The expected reverie of the most recent meeting was broken before it began, scheduled for the afternoon of September 11, 2001. Americans—and many others—have prospered from the growing interconnectedness of nations and economies made possible by global transportation and communication networks. On that day Americans—arguably more than others—were confronted with a horrifying perversion of that connectedness.1 Some conference attendees from across the country and around the world had already arrived at Asilomar when news broke of the terrorist attacks in New York City and Arlington, Virginia, as well as the crash of a fourth plane in rural Pennsylvania. Many attendees were en route to Asilomar at the time of the attacks. Many landed far short of their destination as the skies were cleared of air traffic. Over the course of that morning and afternoon, all scheduled conference attendees were accounted for, either stranded at home or at airports throughout the country. Fortunately, all were safe. While their first thoughts were of family, friends, loved ones, and colleagues in or near the sites of the attacks, or en route, conference organizers were obliged to turn their attention to the community of people already gathered at Asilomar. Many were far from home, with no prospect of returning for days or longer. Was it appropriate to convene this meeting with such terrible events unfolding in the world? The conference was missing speakers, session chairs, and much of its audience. But about one third of the expected attendees were on site. This group decided to proceed with the conference; not to meet would leave many as “stranded assets.” Attendees proceeded to meet, 1

2 Transportation, Energy, and Environmental Policy: Managing Transitions listen, and discuss as best as possible the topic of managing transitions in transportation, energy, and environmental policy. For many, events of the morning of September 11 simply underscored the importance of one such transition—away from transportation’s dependence on petroleum. With the cooperation of everyone, and the dedicated staff of the Institute of Transportation Studies of the University of California, Davis, the original two-and-half-day agenda was condensed into one-and-a-half days. Ultimately, many of the presenters who could not make it to Asilomar were able to present their work at a session of the 81st Annual Meeting of the Transportation Research Board, in January 2002 in Washington, D.C. MANAGING TRANSITIONS The focus of the biennial Asilomar transportation and energy conferences alternates between technology and policy. In 2001, the focus was on policies to manage transitions. Technological discussions in previous years concluded that new and enhanced technologies show great promise, but that implementation was often problematic. Petroleum-fueled automobility is a web of entrenched, specialized, and linked networks. It constitutes a large part of our economy, and plays a central role in our lifestyles. Change is difficult. That day, September 11, 2001, may prove pivotal. Many attendees arrived with firm views of desirable transitions and end states. Those views were tested by the events of that day. The question of transition paths and policies became more salient than any could have imagined. Faced with new (and old) imperatives, advancing technological possibilities, and established automobility patterns, many attendees began thinking of a transition to a “hydrogen economy”— a transition both facilitated by and facilitating a transition away from transportation systems dependent on petroleum. As Dan Sperling noted in his introductory talk, transitions involve the interplay of technology, markets, and policy. While a previous Asilomar conference concluded, “Technology is enough,” such a statement is qualified by behavioral responses to new technology, including those of manufacturers, marketers, and end-users. New technologies do not propagate themselves. They compete with other new technologies. More importantly, they compete within and against historical conditions defined by existing institutions, policies, modes of behavior, ways of living, and technologies. The choice of any new transportation energy system must answer the question of whether it is better to simply abandon existing technologies, policies, and ways of thinking and acting, or use them as springboards to launch the new.2 Similarly, understanding markets goes well beyond economics. Economic systems are shaped by historical conditions, policy, and politics—local and global. The processes of change are highly constrained. Government can only go as far as its citizens will go, and industry will only (willingly) provide products it believes consumers will buy. The conference and this book explore this interplay of economics, policy, and behavior. A central theme is the role of petroleum. The age of petroleum continues to survive despite dire warnings of impending shortages, precarious dependencies, and high air pollution and carbon dioxide emissions. Most extraordinary has been the success in reducing air pollution. Just ten years ago, few people thought that gasoline powered, internal combustion engine (ICE) cars would be able to meet California’s new super ultra-low emission vehicle standard. They now can. Similar progress is now following with diesel engines. The challenge with greenhouse gas emissions is greater, but progress is being made. Hybridizing those ultra-clean gasoline- or diesel-powered ICEs with

Kurani and Sperling 3 electric drive technology offers the potential for large reductions in emissions of greenhouse gases (and criteria pollutants). Petroleum-powered pathways continue to dominate. But for how much longer? What can and should be done now? What transitions and pathways are most promising and how might they be pursued? These transitions were the subject of much of the discussion during the VIII Biennial Asilomar Conference on Transportation, Energy, and Environmental Policy. OUTLINE OF THIS VOLUME The layout of this book follows the planned and realized agenda for the VIII Biennial Asilomar Conference on Transportation, Energy, and Environmental Policy: Managing Transitions. As such it contains some topics that were discussed at Asilomar, a few presented in Washington, D.C., four months later, and others prepared for the conference but never presented. The book also includes a concluding chapter in which the editors summarize and synthesize research recommendations that were generated by conference participants at the conference and in other forums. The remainder of this chapter highlights some important insights and findings of the chapters in this book. Motivations and Forces for Change Keeping in mind that the timeframe for planning this conference was prior to September 11, 2001, the first session addressed the question, What are the implications for change in the transportation sector? In particular, What emerging issues and trends are forcing change? What transportation energy issues are likely to be most pressing over the next few years because of public concern and approaching environmental and supply limitations? The chapters by Peter Brown and Lee Schipper approach the issue of change very differently. Peter Brown identifies motivations and forces for change by subordinating the entire framework of mainstream economic thought into a more comprehensive stewardship economics. Lee Schipper, while giving attention to larger policy contexts, also plumbs the details of comparative analyses down to the level of what data are required to compare the causes and effects of individual transportation–land use projects. Peter Brown does not simply apply economics to the problem of sustainability; he reshapes economics with the idea of sustainability. He discusses the application of stewardship economics to the case of greenhouse gas emissions and transportation. In his chapter, “Economics, Stewardship, and the Transportation Sector,” Brown asks, “ what transportation energy issues would likely be most pressing over the next several decades if we reformulate two of the dominant analytical paradigms, namely modern micro- and macro-economics?” Brown argues that stewardship economics builds on the moral/conceptual framework offered by John Maynard Keynes that one goal of economics should be the prevention of war. Brown extends this goal to preserving the functioning of the natural world. The two starting points for his extension are 1) the recognition of the finite capability of natural systems to sustain and absorb flows of energy and materials, and 2) the expansion of the moral realm beyond people. Changes to economics would include a shift in the role of prices. While prices are used to maintain and protect what Brown calls the commonwealth of life, it is not done so simply with an eye to maximum ef

TRANSPORTATION RESEARCH BOARD OF THE NATIONAL ACADEMIES TRANSPORTATION RESEARCH BOARD 500 Fifth Street, NW Washington, DC 20001 WWW.TRB.ORG VIII Biennial Asilomar Conference September 2001 Transportation, Energy, and Environmental Policy: Managing Transitions ISBN -309-08571-3 Managing Transitions Transportation, Energy, and Environmental Policy