Earlier this month, the U.S. Chamber of Commerce announced an important new campaign for 2021—“Build by the Fourth of July,” which, as the name implies, calls on Congress to pass comprehensive infrastructure legislation into law by July 4th, 2021. This effort includes more than 220 organizations, including major voices from business, labor and environmental groups. We hope that this unified message will provide critical momentum to finally pass a historic infrastructure bill that the country sorely needs.
In our view, a successful “BB4J” effort must be comprehensive, addressing not only crumbling roads, bridges, and transit, but many other components of U.S. infrastructure, and do so in a manner that aids economic recovery and accelerates environmental progress of recent decades. As the pledge states, “As a nation we must be able to build big things promptly to accelerate the economic recovery and build the resilient low-carbon economy of the future. We need a durable commitment and clear strategy.”
A central component of this will surely be a set of policies designed to advance a cleaner, stronger transportation system—not just the roads and bridges that are the foundation of America’s infrastructure, but the vehicles and enabling systems that are necessary to modernize transportation in America.
With respect to carbon emissions, the transportation sector is of growing interest and importance. While immense progress has been made—passenger vehicle fuel economy has improved almost every year since 2005, and new cars are 98-99% cleaner for most tailpipe pollutants compared to the 1960s—challenges remain, as the transportation sector now represents the largest source of emissions since surpassing the power sector in 2016, according to the Energy Information Administration.
Tackling this challenge will not be easy. Emissions from transportation are diverse and complex, originating not just from gasoline-powered passenger vehicles but diesel-powered medium- and heavy-duty vehicles, airplanes, rail, ships, and boats. Each of these sectors are capital intensive with long planning horizons. Fleet turnover is generally slow, and balancing unpredictable technological and market factors is difficult. Because of this, regulatory certainty is paramount, particularly in the automotive sector.
The U.S. Chamber’s Global Energy Institute examined these challenges facing the auto sector in a 2019 report, Divided Highway, the findings of which remain just as relevant today. The report highlights the importance of a workable path forward on vehicle fuel economy and greenhouse gas standards that provide regulatory certainty, continue progress on mileage and emissions reductions, and preserve the unified national program for vehicle sales.
As we transition into a new Congress and new presidential administration, opportunities to advance these principles in a comprehensive and strategic manner are significant. We look forward to working with the Biden Administration on a regulatory framework that achieves these goals, and with Congress on smart, holistic, and technology neutral infrastructure spending, tax policies, and other incentives designed to facilitate consumer adoption of cleaner vehicles. While more than 40 models of zero emissions vehicles (ZEVs) are currently available in the U.S., sales represent less than two percent of the light-duty market, illustrating the interest in understanding technological, market, and policy factors that could improve adoption.
To this end, alternative vehicle infrastructure and tax incentives stand out as key foundational policies likely to be considered in upcoming infrastructure legislation. We hope this debate is complemented by examining federal support for good old-fashioned fuel efficiency gains, incentives for adoption of cleaner fleets and commercial vehicles, and alternatives such as hydrogen fuel cells, which hold great promise not only for passenger vehicles but also for the medium- and heavy-duty trucking industry.
Progress depends on identifying clear funding sources. The U.S. Chamber has long supported raising the federal gas tax contribution to the Highway Trust Fund by 25 cents per gallon over the next five years. The gas tax has not been raised for almost thirty years, and, over time, the transition to cleaner vehicles will reduce contributions to the trust fund. This commonsense increase would help to provide the resources necessary to close the gap between what we want to build and our ability to pay for it. In the meantime, we’re working with Congress to identify alternative funding mechanisms—such as a vehicle miles traveled (VMT) or user-free based approach—that would provide a solution to revenue challenges over the longer-term.
Finally, we cannot forget the need for research and technology development to ensure longer-term success. The recently passed bipartisan Energy Act of 2020, a top legislative priority for the U.S. Chamber last year, sets forth the foundation necessary for this progress. In addition to increasing resources for applied research across a variety of energy areas important to the transportation sector, the new law reauthorizes and expands Department of Energy R&D activities in areas such as vehicle technologies, hydrogen and fuel cell technologies, and integrating EVs onto the electric grid. It also addresses America’s vulnerable supply chain for critical minerals that are indeed critical for energy storage and many renewable energy applications. It also extends the Diesel Emissions Reduction Act (DERA), an important U.S. Chamber legislative priority that accelerates replacement of older, polluting diesel engines in urban areas facing air quality challenges.
Together, these pillars—comprehensive infrastructure legislation, achievable nationwide fuel economy standards, and the variety of programs supported in the Energy Act of 2020—present a historic opportunity to accelerate emissions reductions in the transportation sector, while aiding American manufacturing and economic competitiveness as we continue to recover from the devastating consequences of the COVID-19 pandemic.