A team of transportation and policy experts from the University of California released a report to the California Environmental Protection Agency (CalEPA) outlining policy options to significantly reduce transportation-related fossil fuel demand and emissions. Those policy options, when combined, could lead to a zero-carbon transportation system by 2045, while also improving equity, health and the economy.

A second study led by UC Santa Barbara was released simultaneously. It identifies strategies to reduce in-state petroleum production in parallel with reductions in demand.

The state funded the two studies through the 2019 Budget Act. The studies are designed to identify paths to slash transportation-related fossil fuel demand and emissions while also managing a strategic, responsible decline in transportation-related fossil fuel supply.

The University of California demand study was conducted by researchers from the UC Institute of Transportation Studies, a network with branches at UC Davis, UC Berkeley, UC Irvine, and UCLA. The UC Davis Policy Institute for Energy, Environment, and the Economy coordinated the report’s policy management, and the UC Davis Center for Regional Change led the study’s equity and environmental justice research.

Bringing about a zero-carbon transportation future will be challenging, but not impossible, the report states. Doing so requires urgent actions and a long-term perspective. The report recommends flexible policy approaches that can be adjusted over time as technologies evolve and more knowledge is gained.

This report is the first to comprehensively evaluate a path to a carbon-neutral transportation system for California by 2045. We find that such pathways are possible but will rely on extensive changes to existing policies as well as introduction of some new policies. The study also prioritizes equity, health and workforce impacts of the transition to zero-carbon transportation.

—Dan Sperling, director of the UC Davis Institute of Transportation Studies

The core results from the study in terms of emissions impacts are incorporated in a central Low Carbon (LC1) scenario. This scenario includes GHG emissions, vehicle sales, fuel consumption, carbon intensity, and changes in VMT. The LC1 scenario is referred to as ‘central’ to distinguish it from other low-carbon scenarios (‘side cases’) described in the full report.

The scenario analysis includes an estimate of the total costs of the LC1 compared to the BAU scenario. The overall finding is that combined vehicle and fuel costs for the LC1 scenario are higher over the first 10 years ($10 billion cumulative from 2020 to 2030), and thereafter lower due to the reduced costs for fuel and improved vehicle technology ($177 billion savings cumulative from 2031 to 2045, for a net of $167 billion, 2020 to 2045). In 2045, the single-year total costs are approximately $23 billion lower in the LC1 scenario.

The finding of net savings shows that there are significant expected economic benefits overall; this does not mean that the benefits will necessarily accrue fairly. Including equity in all policy elements can mitigate potential differential benefits and harms.

—“Driving California’s Transportation Emissions to Zero”

The policy analysis was conducted in four subsectors. These are:

• Light-duty vehicles: cars and light trucks, mostly used for personal transportation. These vehicles are responsible for 70% of transportation emissions.

• Heavy-duty vehicles: medium- and heavy-duty vehicles, mostly used for goods movement and commercial and industrial use, as well as off-road equipment.

• Vehicle miles traveled: the demand for travel and mode selection that defines total vehicle use.

• Fuels: liquid petroleum fuels that dominate transportation today and renewable and alternative fuels that can act as substitutes.

The transition to a zero-carbon transportation system is very unlikely to happen rapidly without policy intervention. This is because many of the external costs1 of transportation—such as congestion, pollution, and GHG emissions—are not paid for by the businesses or individuals that make key decisions, and because individuals and even many businesses do not make purchase decisions based on the total cost of ownership (TCO). This TCO issue is critical because electric vehicles (EVs) are likely to be superior on a TCO basis in less than 10 years, but buyers base their decision more on the EV purchase price, which is not optimal for the economy nor the environment. More generally, there are many rules, laws, and behaviors that persist from the past that discourage change. Announced goals and federal actions to date are not enough to move the market quickly.

Policies, regulations, and incentives are therefore needed, especially in the early stages of transition, to give direction to investments and provide cost parity and market sustainability. The main focus of this study was to explore the combination of policies that can support the transition to a zero-carbon transportation system as exemplified by the LC1 scenario. The policies examined here are analyzed in the context of their ability to, in concert, lead to a very low- or zero-carbon transportation system.

—“Driving California’s Transportation Emissions to Zero”

Key policy strategies

Zero emission vehicles: In the low carbon scenario, vehicle sales are 100% ZEV by 2040. This very rapid transition would need to be catalyzed by a combination of a more stringent ZEV mandate, buyer incentives, and deployment of public charging and hydrogen infrastructure.

For medium and heavy-duty vehicles, key policy priorities include increasing the availability of charging stations for long-haul freights, electricity pricing reform to make depot charging more affordable, and priority lanes and curb access for zero-emission trucks, among other possibilities.

Vehicle miles traveled: In California, most personal travel is by car, often with only the driver in the vehicle. SB 375, passed in 2008, required each regional planning agency to submit a plan to reduce emissions, with a focus on reducing VMT. Agencies submitted plans that combined were intended to reduce emissions by 18% statewide. However, a key tracking report in 2018 found that VMT is increasing, not decreasing.

To reduce VMT substantially by 2045, various public policies need to be extended or enacted to reinforce the travel behaviors and create the other changes that are needed. The study divided possible VMT reduction opportunities into groups of specific strategies. These policy strategies are grouped into the following categories:

• Built environment and land use changes:

  • Prioritize maintenance and avoid or cease new road building or road expansion.
  • Transit-oriented development/densification
  • Active transportation
  • Public transit investments, expansion, and incentives

• Transportation pricing:

  • Gasoline taxes
  • Shift to VMT-based road fees as the number of ZEVs grows and fuel tax revenues decline
  • Corridor congestion pricing and high occupancy toll lanes
  • Dense urban area cordon pricing
  • Parking pricing policies

• Transportation demand management (TDM) strategies:

  • Employer-based policies that encourage telecommuting
  • Employer-based carpooling policies that reduce subsidies for parking and encourage the use of transit, carpooling, and other modes
  • Incentives for the use of telehealth

• Micromobility and shared mobility:

  • Incentivize the use of walking and scooters by providing safer and better infrastructure and supporting companies offering bike and scooter services
  • Encourage the use of pooled and shared services by transportation network companies (e.g., Lyft, Uber, Via), including the eventual use of pooled, highly-automated vehicles

• Ensure that highly automated vehicles, which have the potential to increase VMT and reduce equity, are pooled and electric

The LC1 scenario includes VMT reduction that could be met from a variety of different specific combinations of strategies. The project team estimates that most of the above strategies will need to be implemented in concert to achieve the 15% reduction in per-capita VMT in 2045 from a 2019 baseline. This VMT reduction is included in the LC1 scenario, with somewhat further reduction possible through deeper implementation of pricing and land use policies that are complemented with improved transit, pooling, and micromobility solutions.

—“Driving California’s Transportation Emissions to Zero”

Fuels: About 86% of transportation fuel is petroleum. Shifting toward low-carbon clean energy requires major investments in electricity and hydrogen. Low-carbon liquid fuels compatible with internal combustion engines will be needed to reduce emissions while the transition to ZEVs progresses, as well as in some specialized applications, such as aviation.

California can support the needed investments in clean fuels with mandated blending levels and new incentives and credits to stimulate investment in very low-carbon liquid fuels for aviation, shipping and legacy combustion engine vehicles.

Under every scenario examined by this study, there are some residual GHG emissions from fuels in 2045, largely from liquid fuels used in older conventional vehicles or specialized applications. Unless a cost-competitive, highly-scalable zero-carbon solution emerges to meet this demand, California will need some negative emission or carbon sequestration capacity to counteract these emissions—if it expects to reach net-zero emissions in the transport sector. This could come from carbon capture and sequestration (CCS) projects, possibly using direct air capture to pull carbon dioxide out of the air and store it underground. CCS can also be combined with bioenergy, biofuel, or bioproduct systems to yield a system which removes more carbon from the air than it emits over its full life cycle (resulting in “net-negative” emissions).

Another alternative would be sequestration by natural or working lands. In all, about 4–5 million metric tons per year of negative emission capacity will be needed in 2045, in addition to any CCS or negative emission projects that are part of a fuel production system, such as enhanced oil recovery or sequestration of carbon from ethanol production. Additional net-negative CCS capacity could increase the effective carbon budget, allowing greater consumption of non-zero carbon fuels while still achieving carbon neutrality.

—“Driving California’s Transportation Emissions to Zero”