Discussion Paper - Energy Technology Innovation Policy Project, Belfer Center
Analysis of Policies to Reduce Oil Consumption and Greenhouse-Gas Emissions from the U.S. Transportation Sector
For the first time in decades, Corporate Average Fuel Economy (CAFE) standards for passenger cars were strengthened in the United States in the Energy Independence and Security Act of 2007 (EISA). As the nation considers how else to address remaining oil security and climate change concerns, the transportation sector deserves considerable attention as the primary consumer of imported oil and the producer of a third of total U.S. greenhouse-gas (GHG) emissions. This study examines different policy scenarios for reducing GHG emissions and oil consumption in the U.S. transportation sector. Using a variant of the National Energy Modeling System (NEMS), NEMS-ETIP, a number of policy scenarios were modeled using both the U.S. Energy Information Administration's "reference" case and "high-oil price" reference case. Quantitative estimates are provided of the impact of increases in fuel-economy standards similar to those contained in the EISA in combination with the likely impacts of two different economy-wide climate policies and several different kinds of taxes on transportation fuels. Even the most stringent policy scenario modeled here failed to prevent an increase in oil consumption and greenhouse-gas emissions in the transportation sector mainly due to the persistent trend of rising vehicle-miles traveled, but some policy scenarios reduced oil consumption and greenhouse-gas emissions significantly below the business-as-usual projection. In general, individual policies prove less effective than combinations or packages of policies. The macro-economic impact of policies is dependent on how carbon permit or tax revenues are used.
Analysis & Opinions - The Washington Post