After recommending goals to the Council, the Energy & Transportation
Task Force members worked to develop policy recommendations intended to
provide economic, environmental, and equity benefits, in varying
degrees. Many of these recommendations are targeted to help achieve
specific indicators of progress that are presented in the previous chapter.
The Task Force strove to develop policy recommendations that operate
within the context of competitive markets, promote overall prosperity,
and offer consumers a wide range of choices. Some of these
recommendations offer incentives for providers of energy and
transportation services to improve environmental performance while
maintaining affordability. Others strive to remove regulatory or
institutional barriers to economic, environmental, and social equity
goals. Table lists each policy recommendation and indicates whether it
would operate through market mechanisms, whether it would entail
programmatic or institutional changes, or whether changes in regulations
would be required for implementation.
|Policy Recommendation||Policy Approach|
| ||Market Mechanism
|1. Incentives for Sustainable Electricity Generation/td>
||*|| || |
|2. National Energy-Efficiency Offer
||*|| || |
|3. Revenue Neutral Tax Shift to Help Achieve Sustainable Development
||*|| || |
|4. Regulatory Flexibility||*
|5. Local Authority for Market-Based Regional Congestion Management
||*|| || |
|6. Location-Efficient Mortgages
|7. Cash for Clunkers and Inspection and Maintenance
|8. Building on Current Successes||*
|Policy Recommendation 1
|INCENTIVES FOR SUSTAINABLE ELECTRICITY
Tax incentives should be provided for
U.S. electric generators to replace the
most inefficient infrastructure in energy
conservation and a mixture of new,
efficient fossil and renewable electricity
generation technologies by the year
Technology is both a cause of and part of the solution to many of the barriers on the path to a
sustainable future. It is important to focus not only on how fast new technologies that use
resources more efficiently and prevent pollution are developed, but also on how quickly these
new, cleaner technologies are moved off the shelf and into everyday use. From the light bulb to
the power plant, there are tremendous opportunities to replace old technologies while creating
jobs, reducing environ-mental impacts, and stabilizing long-term electric rates. According to
industry projections, by the year 2000 roughly 20 percent of the U.S. electricity supply will be
generated by plants 40 years of age and older.70 Typically, these facilities use
generation technologies that are significantly less efficient than those
available and in use today.*
* Older facilities have efficiencies - energy i.input to heat output -
ranging from 25-32 percent as compared to the
40-50 percent efficiencies of technologies available today.
AGE OF FOSSIL FUEL ELECTRIC CAPACITY
IN THE YEAR 2000
|FUEL TYPE||ALL AGES||+30
|Coal||284.3 GW||112 GW
||46.9 GW (16.5%)|
|Oil & Gas||144.8 GW||85.6 GW
(59.0%)||34.4 GW (23.8%)|
||197.6 GW (46%)||81.3 GW (18.9%)|
Although plants built before 1960 are much less efficient than the best current technologies,
some utilities are not retiring them because they are valuable as backups and during times of
high demand in summer and winter months. As the utility generating stock ages, some plant
retirements will occur naturally and lead to replacement investments in renewable and more
efficient fossil generation technologies. However, industry projections
suggest that few units will
be retired between the year 2000 and 2010, and only 35-60 gigawatts (GW) of generation
capacity are scheduled to retire by 2015. At most, only slightly more than half of the total plant
capacity 40 years or older in the year 2000 will be retired by
2015.71 This would leave a
significant number of the most Inefficient power plants in operation
and contributing the most emissions to the environment.
Tax code changes, as well as tax reform measures, could be provided to
remove barriers and create
incentives to move toward specific goals for sustainable development.
Tax depreciation schedules could
be based on the characteristics of the technology, particularly in
cases where the assets are long-lived.
Reviews of federal tax and subsidy policy should consider this
objective. Tax incentives should be
provided for U.S. electric generators to replace the most inefficient
infrastructure with investments in
energy conservation and a mixture of new, efficient fossil and renewable generation technologies by the
year 2010. Incentives should be linked to the efficiency of the new technologies and lead to retiring,
repowering, or replacing approximately 400 GW of the most inefficient power plants. Task Force
members are concerned about short-term electricity price increases that could result from retiring
plants that generate low cost electricity. As a result, the rate and scope of the policy would need to be
adjusted to prevent unreasonable utility rate and taxpayer impacts.
POSSIBLE IMPLEMENTATION APPROACHES
Tax incentives should be provided to utilities and other power plant
owners that invest in a combination of conservation, renewable energy
resources, and high efficiency fossil resources--those that have at
least 50 percent energy input to heat output efficiency. To qualify,
electricity generators would have to replace the most inefficient
Restructure, agree to enter this program by January 1, 2000, and
complete their conversion (meet targets) by January 1, 2010. In
addition, all required regulatory approvals would need to be secured
prior to receiving tax benefits. In exchange, the tax incentives
could be taken between the date of entering the program and the year
2005. One mechanism that would potentially have significant impact
would be to base accelerated depreciation tax benefits on the
thermal efficiency of new fossil fuel fired investments, investments in
renewable generation or improving the efficiency of end use.
This tax incentive can be viewed as a reinvestment in America. It
develops an electrical power system
for the future that is more efficient, cleaner and less costly in the
long-ten-n, while creating new jobs
and a more competitive industry. Shorter tax depreciation schedules
for the most efficient replacement
technologies would have two effects that could help achieve the goals:
the decision to retire and rebuild
would be accelerated, and the composition of new investment would be
shifted toward the most efficient and renewable technologies.
Specifically, these incentives would promote several kinds of
technologies that would contribute to economic, environm=ental, and equity
goals. Investments in energy conservation technologies would
have the most economic and environmental benefits by reducing the need
for electricity. This program would increase the use of technologies
that rely on the abundance of U.S. renewable energy resources.
Renewables generally have fewer environmental impacts than fossil
fuels, and they are gradually becoming commercially competitive with
traditional power sources. Since fossil fuels will continue to
be an important energy source in the future--at home and
abroad--incentives would encourage greater use of cost-effective
technologies available today that bum fossil fuels cleaner and more
efficiently. As a result the air, water, and soil pollution associated
with energy use would be reduced at lower cost.
Reward Only the Most Efficient Technologies
The incentives would be limited to investments in conservation,
renewables, and high-efficiency fossil technologies. The high minimum
efficiency standard for replacement fossil technologies is greater than
the projected average efficiency of new investments that would occur
without the incentive. Using this
standard would reward investments that make the greatest contribution
and helps to limit windfall tax
advantages to investments that would have occurred without the
incentive. This policy would also lower
the costs of capital for emerging technologies that will be essential
to a sustainable energy supply. The
Task Force recognizes that economic and national security concerns
require a diverse portfolio of fuels
and electricity generation technologies in the U.S. energy supply.
Therefore, program requirements are designed to be fuel neutral.*
*In addition to natural gas technologies that already
feature efficiencies of 50 percent, two coal technologies with
similar conversion efficencies are expected to be in commercial
operation by the year 2010. These technologies are
advanced integrated gasification combined cycle and
pressurized fluidized bed.
Cost impacts for energy consumers would depend on the specific design
of the program and the regulatory structure of the electricity market in
each state. However, an upper bound could be considered if all generation
capacity 40 years and older is replaced sooner than what otherwise occur.
Assuming all 40-year-old capacity is replaced in the year 2000 instead
of 2010, an additional cost of $8 to $11 billion would occur, but may be
offset over time by lower fuel expenses. Electricity sales
currently exceed $200 billion per year nationwide.72 Because the program would be
voluntary, the ultimate impact on electricity rates should be minimal,
and would depend on the level of tax subsidy, the magnitude of ongoing
fuel savings, and the regulatory treatment of capital costs.
Long term rates are likely to stabilize as the newer plants reduce the
risk of future rate shocks due to fuel prices, operating and maintenance
cost overruns or regulatory changes arising from growing health
concerns. The actual effects on consumers will vary according to
region, the cost structure of the state regulators treat underpreciated
assets for rate making purposes. The rate and scope of the policy
may need to be adjusted to prevent unreasonable utility rate increases
and costs to taxpayers. The recommendation does not address the
regulatory treatment of investments at the local level.
Tax consequences depend on how targeted the program is and how much
"free riders" gain benefits on investments that would have occurred
without the benefit. Revenue loss could be several billion dollars
per year, but program design could limit windfall gains and federal
revenue losses.73 A
one time increase in investment activity could generate some compensating
tax revenues, but this impact is not universally accepted.
KEY TRADE-OFFS AND CONSIDERATIONS
Positive--This policy recommendation would provide a "market pull" to
stimulate demand for efficient and renewable technologies, accelerating
investments in technology development and cost cutting manufacturing
innovations to speed commercialization of new technologies. Greater use
of cleaner technologies would result in significant environmental
improvement--reduced air and water emissions and also fewer local impacts
from fuel production and transportation.
Negative--This policy recommendation would not be revenue neutral at
the federal level. The impact on short term electricity rates could be
negative if new investments are not managed properly. There is
also a "free ride' issue in that some of these investments might occur
without these incentives. The short-term costs to energy consumers and
taxpayers are important issues that need to be considered in
determining the scope of the policy and the pace of its implementation.
|Policy Recommendation 2
|NATIONAL ENERGY EFFICIENCY OFFER
A program should be developed to
replace the existing patchwork of utility-sponsored conservation programs with
state Energy Efficiency Funds that use a competitive market mechanism to
purchase energy savings.
Energy efficiency is a primary tool of sustainability because it can
help achieve the interdependent objectives of improving the economy,
increasing equity, and reducing
environmental costs. Energy-efficient buildings and products reduce
energy bills for consumers,
which can improve social fairness. Efficient manufacturing reduces
energy and environmental
compliance costs and puts U.S. firms in a better competitive position
in international markets.
Energy efficiency reduces the environmental impact of homes, jobs, and
goods and services
consumers enjoy. A recent study demonstrates that a 30 percent
reduction in overall energy use
would save U.S. electricity customers $50 billion, while significantly
emissions. These savings would lead to $45 billion in economic
growth. In fact, much of the
economic growth of the past 20 years has been powered not so much by
building new power
plants but by redesigning energy consuming industrial processes and
rethinking how products are
made and used. Utilities have undertaken an entire class of
investment, known as demand-side
management to displace new generation and transmission. These include,
for example, "weatherizing" homes and buildings, using power when
demand is low,
and upgrading the efficiency of equipment, such as appliances, lighting,
and industrial motors.74
Despite the substantial efficiency gains of the past 20 years, consumers
and industry can still save energy cost-effectively by using newer
technologies and improved practices. Many of the
least affluent in society have not yet reaped the economic gains from
energy efficiency because of lack of financial resources and access to
technology. And because of the toll current patterns
of energy production exact on the environment, energy efficiency can
directly improve environmental conditions.
Over the past two decades, energy markets have become more competitive
and direct government influence has waned. This is an evolution that
has brought significant benefits for consumers and
contributed to more efficient energy use. However, electric power has
been bought and sold in monopoly markets that evolved before the
benefits of conservation were known. These monopoly
markets give incentives to supply more and more energy, instead of
incentives to first look for
"smarter" ways to use energy. Electricity markets are currently
moving from regulated monopolies toward competitive markets. However,
this transition to increased competition needs
to be managed with efficiency and the environment in mind.
Specifically, many analysts question
whether even the best demand-side management programs currently in
place will survive the transition to more competitive
markets.75 Although energy
efficiency investments are less expensive in the long-term, many
utilities fear they will be at a disadvantage in the short term if their
competitors do not provide these incentives too. Also unclear is the
extent to which businesses will take advantage of opportunities in this
area and might create innovative approaches to replace traditional
demand-side conservation programs. Energy efficiency should
continue to be emphasized during the period of transition and beyond.
Clearly, given the present trend toward competition in the electric
utility industry, transitional programs and policies must promote a
market-based delivery system if they are to survive. They
must be designed to enhance, rather than detract from, the
competitiveness of those who participate in their implementation. The
National Energy Efficiency Offer policy
recommendation is designed to operate in any model of broad competition
that may emerge in electricity markets. The benefits of open competition
can help foster a vibrant market in energy
efficiency through a program which: (1) is implemented at the state
level; (2) enables states to opt-out by enacting their own laws; (3)
recovers incentive payments through the distribution
system, creating a level playing field for all supply-side sources; and
(4) remains in place for only seven years.
To achieve a sustainable future in the generation and consumption of
power, energy efficiency, must be a national objective. The President
should encourage states to provide incentives for
energy-efficiency investments until these investments can be maintained
by competitive energy markets. A program should be developed to replace
the existing patchwork of utility-sponsored
conservation programs with state Energy Efficiency Funds that use a
mechanism to purchase energy savings. The federal executive branch should consult with states
and their utilities and consumers to determine whether this policy recommendation should be
executed through national legislation that allows states to "opt out" through their own laws or
through a voluntary pilot program that gives states the opportunity to determine if they want to
develop a program based on this model. This determination should be
made within twelve months.
If implementation is to be through national legislation, the executive branch should prepare and
provide to Congress proposed legislation that would set up the broad energy efficiency outlines
of this temporary program, and guide states in developing specific details of the program to be
implemented at the state level.
State Opt In or Out
A pilot program would allow states to opt in, or federal legislation
would provide that any state could opt out of the national program by
enactment of state law.
Since the policy recommendation is intended to be temporary, designed
to cover the period of transition from a regulated to more a competitive
market, the federal legislation proposed would contain a seven-year
*Early indicators suggest that utilities preparin gfor competition are striving to cut costs and drive their own prices
down. Even those utilities that have shown willingness in the past to include demand-side management programs, will
only continue to do so voluntarily where the programs clearly enhance competitive advantage. A federally-encouraged
transition-period program will serve two purposes: (1) continue improvement of price competitiveness of demand-side
management measures through the market transformation effect of a "created" market,- and, (2) insulate new,
reluctant and/or old participants fi-om real or perceived disadvantages of participating in the delivery of "expensive"
It is clear that residential, commercial, and small manufacturing customers, for example, that do
not already engage in extensive demand-side management efforts would benefit from a program
of this type. However, many large facilities that may be subject to global competition already
make significant investments in energy efficiency as a business mainstay. In these cases,
incentive programs involving surcharges may not be warranted.
POSSIBLE IMPLEMENTATION APPROACHES
Assessment at the Meter Paid Into An Energy Efficiency Fund--In
participating states, a fee would be assessed at the meter for all users
of an electricity distribution system with 20,000 or more customers. The
proceeds from each fee assessment would be placed in an Energy
Efficiency Fund that would be administered as determined by each state.
Energy Efficiency Incentive Payments
New firms, utilities, and others would compete for contracts to help
residential and commercial consumers reduce their energy bills--and the
demand for more energy. Each state Energy Efficiency Fund would be used
to pay an incentive to purchase energy savings from qualified firms that
provide efficiency services to end users. A utility, energy services
company, or end user could qualify as a provider of efficiency
services. Energy savings would be acquired through an open, competitive
market mechanism. One such mechanism is structured as an Offer
to Purchase Energy Efficiency at a particular price which will be
determined by a state-designed administrative entity. This type of
mechanism fosters a competitive market for the provision of
energy efficiency services, since the Offer Program will establish the
essential parameters of the "product"--ie. the energy efficiency
measures or package to be delivered. Competition among
these potential providers will work to create the most comprehensive
and cost-effective energy efficiency investments and would be among the
most cost effective ways to reduce the air, water,
soil, and other pollution resulting from energy production and use.
Made From An Energy Efficiency Fund
A state-designated entity would administer the Fund to purchase energy
efficiency services. The state-designated administrative entity could
be a state utility regulatory authority or other agency,
an electricity distribution company, a private, non-profit, or other
organization, or another entity as determined by the state.
Any state with ongoing, market-based programs for the delivery of energy
efficiency would be allowed to continue those programs and pay for them
through the Energy Efficiency Fund as
permitted by the appropriate state-designated administrative entity.
The preexisting state energy
efficiency program could be used either to supplement, or to supplant,
the proposed program, provided that the program or combination of
programs chosen promotes an open, competitive market for the delivery of
energy efficiency services.
Energy Efficiency Payments Based on Measured Savings
Payments from the Energy Efficiency Fund would be based on measured
savings in accordance with market-proven measurement and verification
protocols (for example, those in effect in New Jersey and California).
This will ensure that reductions in energy use are real and persistent, are
cost-effective, and will enable energy efficiency investments to
generate tradable air emissions credits.
All Other Details of the Policy
Beyond the broad items discussed, all other details of the proposed
Energy Efficiency Fund program would be established by the state
legislature through implementing legislation, or by the
state's designated administrative entity. Following are some of the
implementation parameters states would determine:
Established at the State Level
- The price level or range of price levels to be paid to competitors from
the fund for measured savings.
- The fee to be charged through the "non-bypassable" assessment at the
meter, including any variations in the level of assessment among rate
classes deemed necessary in the interests of equity.*
- The amount of energy efficiency to be purchased from competitors using
the Energy Efficiency Fund at any given time (for example., based on any
existing state integrated resource planning process).
- Whether the incentive payment is made up front or over time;
- The parties who will be eligible to respond to the Energy Efficiency
Fund offer--for example, utilities, energy services companies, and end
users. This determination should include a decision on whether end users
who undertook the installation of energy efficiency measures prior to
enactment of the program will be eligible for the incentive payments
Resolution of this question is important in order to ensure fairness
among end users who also are competitors and to avoid the "free rider"
- The minimum level of energy efficiency investments for which
incentive payments will be available--for example, 100 kilowatts.
- Energy efficiency measures eligible to receive incentive
* Due to their lack of economic resources, low
income residential ratepayers tend to have low levels of participation
in demand side management programs (DSM), which often require that
participants share in a portion of the costs of
DSM technologies and services. DSM programs can be designed to
overcome these barriers so that low income users
do not become defacto nonparticipants. The federal legislation should
require that state programs be designed to
assure participation by low income residents. Because the Energy
Efficiency Fund is made tip offees collected from
all electricity users, these users will be contributing their pro-rata
share, and must receive the benefit of their
Macroeconomic Implications of the Policy Recommendation
A recent macroeconomic study demonstrates that by meeting the 2010
energy use reduction target of 30 percent, the U.S. will reduce annual
electricity generation by 27 percent and decrease
the need for construction of new generating facilities by over 50
percent. U.S. electricity
customers will enjoy an 18 percent overall reduction in their
electricity bill (a savings of $50
billion), while electric sector emissions of carbon dioxide and oxides
of nitrogen will be reduced
by 33 percent and 12 percent, respectively. These lower costs for
energy will enable U.S.
consumers to increase their annual consumption of other goods and
services by $45 billion.76
|Policy Recommendation 3
TAX SHIFT TO HELP ACHIEVE SUSTAINABLE DEVELOPMENT
The Energy and Transportation Task Force recommended the Council
debate this important topic. In
wrestling with this concept on its own,
the Energy and Transportation Task
Force identified a number of strengths
and concerns that should be considered
in implementing the Council's
recommendation in this important area.
National and Economic Security
the Need to Travel with Increased Access
The Energy and Transportation Task Force did not reach agreement on a
recommendation in this area. However, after debating the work of several
Task Forces on this topic, the Council made the
following recommendation in the second chapter of the Council's report
to the President, Sustainable America: A New Consensus for Prosperity,
Opportunity, and a Healthy Environment.
The Council believes a tax system should be designed to raise
without discouraging capital formation, job creation, environmental improvement,
and social equity. Currently, the federal government raises more than $1 trillion
dollars per year, predominantly (nearly 90 percent) by taxing wages and personal
and corporate income.77 And
since tax policies influence individual and institutional
investment patterns and consumption decisions, the Council believes that an
effective use of the tax system could be a powerful tool in meeting the
challenges of sustainable development. Council members wrestled with
the question of whether these challenges could be met, in part, by
shifting some of the nation's taxes to
activities and forms of consumption that are economically bad for
society--inefficiency, waste, antipollution--and away from those that are
economically good--employment, income, savings, and investment.
Ideally, a tax system that supports the recommendations of the Council would
promote economic growth and jobs in a socially equitable manner, while
discouraging pollution and other forms of inefficiency. The Council believes
substantial progress in reaching these objectives can be made through revenue-
neutral system improvements--changes that shift the ways revenues are
raised without increasing overall tax obligations. In addition to
revenue neutrality, tax reform efforts must be guided by the following
- Tax policy must ensure that individuals and families at different
are treated as fairly as possible. We, as a Council, strongly believe that taxes
should not place a disproportionate burden on lower income individuals and
families, and we recognize the limitation of some options--such as
added tax or a national sales tax--in meeting this criterion.
Federal tax policy must address social equity to be consistent with the
goals of sustainable development.
- The tax system must promote savings and investment, employment, and
economic growth. Although special tax, spending, and credit provisions may
have been economically justified at some time in the nation @ development,
they may no longer be serving their original purposes and instead may have
unintended side effects that run counter to the national economic and
environmental objectives. The Council is firmly convinced that any
tax shift should encourage savings, private investment, and job creation.
Tax-based policy should also be more skillfully employed to provide for
enhanced environmental performance. While there was strong support, among
the Council members, to shift tax policy from "taxing goods to taxing bads,"
there was no consensus regarding any of the specific policy options discussed.
However, the Council acknowledged that there is sufficient merit to both the
market mechanism and pollution tax options to warrant further
Moreover, the Council did agree that any tax shift needs to be done gradually,
will not obviate the need for legally enforceable environmental standards or
agreements, and should be designed to increase the efficiency of national
efforts to improve environmental quality.
Shift in Tax Policies
Begin the long-term process of shifting to tax policies
overall tax burdens--encourage employment and economic
opportunity while discouraging environmentally damaging production and
To implement this policy recommendation the Council calls for the
A national commission should be established to review the effect of federal tax and
subsidy policies on the goals of sustainable development. The commission would
have two major responsibilities. First, it should conduct an explicit assessment Of
alternative tax policies and, in particular, should assess opportunities for increased
use of pollution taxes while reducing reliance on more traditional income taxes.
The commission should make recommendations to the President and Congress on
tax reform initiatives that are consistent with the goals of economic prosperity, a
healthy environment, and social equity.
TRADE-OFFS AND CONSIDERATIONS
In wrestling with this concept on its own, the Energy and Transportation
Task Force identified a number of strengths and concerns that should be
considered in implementing the Council's recommendation in this important
- Raises or offsets revenues (reducing the deficit or replacing more
- Encourages pollution prevention, and spurs investment, recycling,
technological innovation, and reduced use of natural resources.
- Provides greater opportunities for new markets.
- Supports concept that the polluter pay for any damages.
- May be inflationary without appropriate compensatory actions, and could
reduce growth and U.S. competitiveness.
- Effects on total emissions may be less certain than under direct
- Difficult to set "optimal" charges.
- May have disproportionate effects on some individuals and regions.
|Policy Recommendation 4
The Energy and Transportation Task Force supports the concepts of
regulatory flexibility when tied to performance-based standards.
National and Economic Security
Reducing the Need to Travel with Increased Access
Several recent federal initiatives (Climate Challenge, Climate Wise, and Industries of the Future)
have focused on the formation of partnerships with broad industry groups to promote voluntary
reductions in pollutants that exceed existing regulatory requirements. The U.S. Environ-mental
Protection Agency's Common Sense Initiative lays the foundation for regulatory flexibility with
facilities or companies that commit to go beyond compliance regulations. On March 16, 1995,
the Administration announced a 25 point strategy to reinvent environmental regulation. The EPA
regulatory reform attempts to fix problems with today's regulatory programs and simultaneously
fosters partnerships between the federal government, businesses, environmentalists, states, and
communities to develop innovative alternative management strategies for single facilities,
industrial sectors, or geographic areas.
The Eco-Efficiency Task Force developed a regulatory flexibility policy
recommendation which was later refined and incorporated into the
Council's report to the President. The Energy and
Transportation Task Force's review of the work of the Eco-Efficiency
Task Force yielded two important points relevant to energy and
transportation sectors that should be considered when
implementing the Council's policy recommendations in the area of
regulatory reform (listed below.)
Increased Cost-Effectiveness of the Existing Regulatory
Accelerate efforts to evaluate existing regulations and to create
opportunities for attaining environmental goals at lower economic costs.
Alternative Performance-Based Management System
Create a bold, new alternative environmental management system designed
to achieve superior environmental protection and economic development
that relies on verifiable and enforceable
performance-based standards and provides increased operational
flexibility through a collaborative decision-making process.
POSSIBLE IMPLEMENTATION APPROACHES
First, energy efficiency should be encouraged as a method of pollution prevention in the
alternative environmental management system. Cost effective energy efficiency investments, as
stated earlier, lead to economic, environmental, and equity benefits by reducing energy costs for
producers and consumers and the environmental impacts of energy production and use. For the
majority of industries, introduction of innovative technologies that reduce pollution and lower
compliance costs typically decreases energy consumption. Energy efficiency improvements are
industrial process improvements. Domestic industries, for example, that produce the most
pollution and incur the highest abatement costs also usually consume the
most energy.78 Capital
expenditures for industrial pollution abatement, control equipment, and operating costs totaled
roughly $25 billion in 1992. Of this total, the chemical, petroleum refining, pulp and paper, and
primary metals industries account for about 70 percent.79 These same industries accounted for
nearly two thirds of domestic industrial energy
consumption.80 The Energy and
Transportation Task Force believes that successful industrial process
efficiency research and development aimed
at pollution prevention and waste minimization would reduce pollution
remediation costs as well
as consumption of energy and raw materials.
Second, federal research and development technology partnerships can
serve not only as catalysts for innovation, but as potential economic
incentives included in the alternative environmental
management system. Opportunities exist for the private sector to enter
technology partnerships with the federal sector in many areas.
Licensing is available for technology transfer from U.S.
federal laboratories for private sector demonstration and
commercialization. Over 700 laboratories and facilities in the federal
system are home to many unique scientific capabilities
which can be accessed using a variety of cooperative mechanisms,
including personnel exchanges, cooperative research and development
agreements, and reimbursable work. Use of
cooperative research offers both partners the opportunity to leverage
scarce resources, provides an avenue for transfer of technology between
partners, and indicates market priorities to the federal sector.
|Policy Recommendation 5
|LOCAL AUTHORITY FOR MARKET-BASED REGIONAL CONGESTION
State and local governments should be enabled and encouraged to develop
market-based transportation management strategies that more fully
reflect the costs of travel.
|National and Economic Security|
Reducing the Need to
Travel with Increased Access
Traffic congestion in urban and suburban areas is a growing problem facing many regions of the
United States. The causes are complex and interrelated--including
migration to metropolitan
areas and population growth, movement of families from urban to suburban areas, community
design that promotes inefficient land use, and transportation systems that do not fully reflect the
true costs of travel.
Some important strategies to reduce congestion fall outside the scope of the Energy and
Transportation Task Force--for example, overall community design--but
they can be found in the Sustainable Communities Chapter of the Council
report. However, of more direct concern,
states and local governments can choose to incorporate more fully the
cost to all drivers of additional drivers using limited road space during
peak hours of demand.
State and local governments should be enabled and encouraged to develop
market-based transportation management strategies that more fully reflect
the costs of travel.
States and localities that choose to use market-based tools for managing
congestion should apply the revenues raised to offset cuts in
non-transportation taxes (especially those borne most heavily
by the middle class), to enhance transportation system maintenance and
services (including road, transit, non-motorized, and other options), and
to provide toll discounts, exemptions, and/or
rebates for low-income commuters who must travel to jobs when tolls are
The U.S. Department of Transportation should encourage states and
manufacturers to work together to standardize technology specifications
to enable communities interested in using these
strategies to adopt common standards for electronic road and parking
pricing technologies. Federal funding bonuses should be available to
states or regions that implement road user fees
more fully reflecting the marginal costs generated by each motor
POSSIBLE IMPLEMENTATION APPROACHES
Congress should enact legislation to remove provisions in current laws prohibiting toll collection
on interstate and other federally funded highways. Employer commuter programs and other
measures should be encouraged to counter negative effects on low income
commuters/employees. Existing US. Department of Transportation Intelligent Transportation
System (ITS) funding should be targeted to promote flexible road pricing
example, charging by time of day, vehicle type, number of occupants, and
so forth.81 Existing
federal transportation funds should be used to provide funding bonuses for states and regions that
adopt market-based systems to more fully attribute the external costs of highway use and
congestion to those that are using the highway at that time. Specific implementation of road
pricing should be under local and state control.
Time-of-day charges are common in the utility, telephone, airline, public transportation, and
entertainment industries to allocate scarce peak capacity to those most willing to pay. It has been
common practice to "price" access to scarce highway capacity in peak hours by allowing users to
waste their time in traffic congestion. Singapore, Oslo, and Bergen have implemented peak
period road fees.82 More than
eight U. S. communities* have prepared congestion pricing pilot
projects. Potential benefits depend greatly on context and the system
of administration, but most
economists agree that social and economic benefits will far outweigh costs if tolls are collected
using already proven automated electronic systems that do not require
vehicles to slow down.
* U.S. Communities that have prepared congestion pricing pilot projects
or study plans include San Francisco, CA, San Diego, CA, Los Angeles,
CA, Boulder CO, Seattle, WA, Portland, MI,
and the New York State Throughway Authority for Tappan Zee Bridge.
The Transportation Research Board issued a report on congestion pricing in 1993, encouraging
further steps toward adoption. The World Resources Institute estimates that a nationwide
congestion toll system with tolls set relative to congestion levels would reduce vehicle miles
traveled at peak periods by I I percent on the busiest highways and generate annual revenues of
$44 billion and net savings in travel time exceeding $4 billion. If the full social costs of accidents
and delays were covered, peak period traffic would be reduced by 22 percent, saving $11 billion
in hospital bills and other expenses while producing revenues totaling $98 billion per year. The
equivalent amount of reduced road congestion would require approximately $50 billion in
otherwise avoidable highway construction.83
Congestion pricing leaves all travelers better off than a simple vehicle miles traveled fee or
current transportation financing systems, because trips can be shifted to uncongested periods.
High-income travelers obtain significant time savings, while low-income travelers tend to be on
the road less during congested hours. Geographic impacts will vary widely with local conditions.
It should be noted that vehicle miles traveled fees are more effective at reducing pollution than
congestion fees. Further, because congestion is estimated to cost over $100 billion per year,
modest reductions in congestion through this strategy offer very low cost-benefit ratios and
promise a significant boost in long-term U. S. economic performance. Estimates of GDP impact
are unavailable, but widespread application could create significant employment, growth in
electronics, communications, and construction, and lead to more efficient shipping systems and
KEY TRADE-OFFS AND CONSIDERATIONS
The perception of many people that "freeways" means free of charge, not free of intersections,
combines with equity concerns and issues over how revenues are allocated to make this
politically a potentially challenging proposal. Returning surplus revenues back to those who live
in the affected corridors--through expanded alternative transportation
services and user
subsidies, periodic rebates, or property tax relief--might help
everyone to focus on benefits and
overcome the political challenges. Privacy concerns associated with electronic pricing can and
must be addressed by offering anonymous cash or smart card accounts as an alternative to
monthly credit card billings. Equity impacts can be substantially mitigated by the provision of
discounts, exemptions, or rebates for low-income commuter trips to employment.
Policy Recommendation 6||Target
Encourage the development and
adoption of techniques and
lending practices that increase the
borrowing power of potential home
buyers in neighborhoods where
they will have access to public
transit and are likely to use it.
|National and Economic Security |
Reducing the Need to Travel with
Many factors influence where individuals live, including price, the quality of schools and other
public services, convenience, personal preferences of various sorts, and the influence of
government policies. Frequently, residences in high-density urban and suburban areas located in
proximity to public transportation are more expensive, partly due to the convenience this public
service offers. Some potential home buyers in these communities do not need to own an
automobile and thus would not have the monthly expenses associated with it. Despite these likely
reduced expenses, however, many of these home buyers are not able to qualify for a mortgage on
a home near public transit and are forced to purchase a lower-priced home in a neighborhood that
does not have practical alternatives to single-occupancy driving. As a result, people find it
difficult to avoid the economic and environmental cost of driving alone, and lower-income
individuals have even greater difficulty reaching jobs, goods, and services.
The "locational" counterpart to the energy efficient mortgage, this proposal would increase the
borrowing power of potential home buyers given the expected increases in disposable income
that accrue from efficient and cost-effective residential locations, and the resulting absence of
automobile payments, maintenance costs, insurance expenses, and other expenditures. This
policy proposal has met with an extremely positive response from federal agencies,
congressional committees, White House staff, and numerous bankers. The Federal National
Mortgage Association (FannieMae) has expressed interest in the policy. In the time since the
Task Force recommended this proposal to the Council, the President announced this concept as
part of the U.S. Department of Housing and Urban Development's National Home Ownership
POSSIBLE IMPLEMENTATION APPROACHES
The location-efficient mortgage policy recommendation includes a variety
of specific recommendations for federal govern-ment action:
- A primary research need is development of "location-efficiency
values" for individual properties throughout a metropolitan area (see
below), correlating with easily measured variables,
demonstrated to influence transportation expenses.
- Statistical analysis of other factors to illuminate individual
behavior and expenditure differences. These data could also relate to
insurance costs, or commitments to purchase transit passes on a regular
basis to qualify for location-efficient mortgages
(which could reassure lenders).
- Alternative ways of factoring location-efficient mortgages need to be
fully researched and analyzed. Primary methods include both debt
service (principal, interest, taxes, and insurance minus location
savings) and household income
(household income available to service mortgage plus location
Convenient, cost-effective access to "location efficiency values" is
needed by financial institutions, both in electronic form and on paper.
Secondary Mortgage Market Support
Support of the location-efficient mortgage by government-supported
secondary mortgage market institutions is essential.
Many remaining questions about location-efficient mortgages could be more quickly, efficiently,
and effectively answered through a pilot program than through additional research. A pilot
program in several cities, including a wide mix of neighborhoods with good transit access,
should be implemented by the federal government. Lenders with experience in residential
lending should coordinate and advise these demonstrations.
The majority, if not all, of this program can be implemented by executive, administrative, and
regulatory action, or under existing research and development programs in federal agencies.
The empirical basis for this proposal has been strengthened by a recent study of 27 California
communities, conducted by Dr. John Holtzclaw, a consultant and chairman of the Sierra Club
Transportation Committee. The study, Using Residential Patterns to
Decrease Auto Dependence,
commissioned by the Natural Resources Defense Council, uses regression analysis to compare
mean distances cars in different California communities were driven as a function of a number of
average characteristics of those communities. The strongest statistical relationship with mean
community automobile driving distance was residential density, with access to transit also
proving a statistically significant relationship. Other factors, including average community
household income, did not show a statistically significant correlation with average distance cars
were driven in the community. Using national average costs per car owned and per mile driven to
calculate average household expenses for each community, he calculated that the differences in
transportation costs between neighborhoods with high residential density and access to transit
and other neighborhoods could be as much as $400 per month.84 Such location-related savings
should be recognized in a household's qualification for mortgage financing.
Increasingly, mortgage lenders are relying on purely objective, formula-based criteria to control
transaction costs. This policy is consistent with industry practice, which relies on key ratios as
reliable predictors of repayment behavior. Temporary, behavior-based criteria are less likely to
influence costs over the long-term of a home mortgage, due to changes in employment,
commuting patterns, and household composition (such as children growing up, and so on).
This policy serves equity, environmental, and economic values and
goals. It will particularly serve minority and low-to-moderate income
households by increasing their power to purchase
homes in environ-nentally desirable areas. Just as the mortgage
instruments that followed World
War 11 influenced urban form by promoting suburban sprawl, this mortgage instrument will
influence urban form by upgrading housing quality in denser urban areas, efficiently using
existing infrastructure, and conserving open space.
Policy Recommendation 7||Target
|CASH FOR CLUNKERS
AND INSPECTION AND
Strengthen current "Cash for
Clunkers" programs by expanding them
to include repair of some vehicles to
low-emissions operation where
Acceptance by secondary market institutions and mortgage insurers is imperative. The evolution
of research, development, and demonstration projects must be largely guided by the needs of
these institutions and of primary mortgage lenders.
Recently, companies with stationary sources of air pollution that are looking for more cost-
effective methods to reduce pollution have implemented cash for clunkers programs rather than
make expensive investments in pollution control in their facilities. Typically, the firms purchase
and scrap older, badly maintained, heavily-polluting cars removing significant sources of air
pollution from operation.
Although these types of programs can make important, cost-effective contributions to improving
air quality, the emissions reductions may not always be permanent. For example, if the owners of
clunkers use the money they receive to put another heavily polluting car on the road, the
transaction has had no effect. A second problem area of these programs is that the potential
number of participating vehicles is limited. Many highly-polluting vehicles provide the only
available means of transportation for low-income individuals and are therefore not likely to be
Cash for clunkers programs should be expanded to cover repair as well as disposal. Cost-benefit
analysis can be used to determine whether vehicles should be repaired or purchased. The benefits
of expanding cash for clunkers programs to include inspection and repair are many.
First, there is a much higher chance that one clunker will not be replaced by another heavily
polluting vehicle because ownership of the vehicle and the mobility it provides is retained. The
vehicles, once repaired free of charge to the driver (possibly requiring an income means test to
qualify), would need to be monitored annually to assure they remain in a low-polluting
Second, individuals who use a clunker for access to employment could participate in the
expanded program, whereas they are excluded from programs that only discard their vehicles.
Local emissions-repair jobs are promoted in neighborhoods with high unemployment, where
many "clunker" owners reside.
The program would simultaneously fund education and training programs for emissions repairs,
providing job training credits for students as well as emission credits for regional (same air basin
or non-attainment area) industry. The program may also provide jobs for graduates, depending on
the number of participants and vehicle repairs.
The higher supply of skilled laborers specializing in the automobile emission repair may lower
the overall market cost of emissions repairs, and increase the number of
Cost-effectiveness will be increased if the cost of repairs is less than the cost of scrapping the
vehicles under "cash for clunkers" programs.
While providing these additional benefits, the expanded cash for clunkers policy also retains the
original benefits of programs, primarily through financing the venture by trading the emissions
saved (as estimated from the clunkers measured tailpipe emissions and the vehicle miles driven
in a calendar year) with stationary-source polluters.
POSSIBLE IMPLEMENTATION APPROACHES
This policy could be implemented under current law but would be
facilitated by dedication of federal, state, or local funding to a pilot
project for the expanded cash for clunkers approach.
Economy, environment, and equity are all served by this policy. The
program would be financed
by capturing a small portion of the cost savings to private industry, with an equivalent or higher
emissions reduction. Some kind of "seed money" will be needed to finance the establishment of
the program prior to the availability of emissions credits for trading-meaning that many costs
would be immediate, while the return on the investment would be slower. Although the seed
money could be government capital, it is highly likely that local industries can be encouraged to
finance the initial venture based on expected savings in pollution regulation compliance costs.
Key Trade-Offs and Concerns
The impacts of the program may decrease over time as the number of highly polluting cars
decreases. Technology improvements may increase the cost-effectiveness of
higher emission standards for older cars. Some of these cars may be
repaired and then moved out of non-attainment areas. Annual inspection
and maintenance may be difficult to enforce in subsequent
years. Given the varying levels of reactivity and toxicity between
different volatile organic compounds, trading one emission for another
may prove problematic.
|Policy Recommendation 8
| BUILDING ON CURRENT
Support the general direction of current
policy initiatives that promote the
research, development, and private
sector application of cost-effective
technologies and practices that support
the sustainable production and use of
|the current policies described below contribute to a
variety of energy or transportation indicators already cited in the
Opposition is not expected from environmental, economic equity,
automotive, or industrial interests. This policy should prove
attractive to many interests.
Many existing polices are moving some sectors of society in the
direction of sustainable development. At a time when the Administration,
Congress, and the public are reviewing the
effectiveness of all government programs, it is useful to give attention
to some that the Task Force believes are contributing to. the goals it
The Energy and Transportation Task Force endorses the general direction of IO current policy
initiatives discussed below, including public sector practices and public-private partnerships that
promote the research, development, and private sector application of cost-effective technologies
and practices that support the sustainable production and use of energy. While not all members
agree with the specifics of every policy, a strong majority concur that the policies are making
contributions to the goals and are worthy of support.
Make Housing More Affordable and Sustainable Through Energy
Major capital investment and shifts in consumer demand must occur to
affordability through increased energy efficiency in the nation's
housing stock. New
construction, resales of existing homes, and replacement of heating and
provide 1O million opportunities annually to accomplish this goal using
Utility consumption can be readily reduced by 20 to 40 percent new
Unfortunately, the marketplace and consumers do not place a high value
on these investments given that real prices of energy are at their
lowest levels in 20 years.87
Several policies increase residential housing affordability and sustainability by providing public-
private financing for energy efficiency improvements in new, existing, and low-income housing.
Cost-effective policy initiatives that promote energy-efficiency financing, home energy and
environmental ratings, and cost-effective energy building standards should be continued and if
possible expanded and combined with revenue-neutral tax incentives. The Climate Change
Action Plan estimates that if 20 percent of existing homes were upgraded by the year 2000 using
cost-effective strategies, it would stimulate $11.7 billion in private sector investments, yielding
energy savings worth approximately $5.4 billion with additional savings worth up $21.6 billion
for the period 2001-2010.88
Energy-Efficiency Financing programs provide market-based incentives for energy improve
- Uniform underwriting policies for both federal and secondary
- Standardizing the incorporation of home energy efficiency ratings.
- Aggressively expanding and implementing existing federal energy
efficient mortgage programs as part of the agency "reinvention" process.
Home energy and environmental ratings provide national uniform guidelines for home rating
systems to incorporate environmental impacts. Ratings programs developed by the U.S.
Department of Energy, Edison Electric Institute, the City of Austin, and others could be used a
national model. These ratings should be required for all federally insured, new construction in
areas designated as environmentally sensitive with cost sharing by the federal government,
homeowner, and the utility provider. States and/or localities should be given incentives to adop
cost-effective energy efficiency building standards. The Energy Policy Act of 1992 (EPAct)
requires states to consider adopting model energy codes and financial incentives for adoption
could be provided through the permissive use of umbrella block grant
Moreover, investment tax credits could be provided for two percent of the sales price ($2,000
maximum) for purchasers of new homes that exceed Federal Housing Authority building energy
code requirements (CABO Model Energy Code 1993) by 25 percent and three percent for
purchasers of existing homes ($2,500 maximum) who install energy improvements that increase
pre-retro-fit efficiency by 25 percent.
Broaden Golden CarrotTM Manufacturer
Incentives for Super-Efficient Products
This policy would promote incentives administered through public-private partnerships (based o
the successful program that developed the Super Efficient Refrigerator) and reinforces existing
work underway by the Consortium for Energy Efficiency, a public-private partnership that
provides financial and advisory support.90
The consortium has launched three new projects--to improve commercial
rooftop air conditioners, residential central air conditioners, and
residential clothes washers--and has several more under varying degrees
of development. Manufacturer incentives should be given for
improving other energy-consuming technologies in the residential,
commercial, and industrial sectors. The federal government should
continue, and to the extent possible increase, funding for
the program through the U.S. Department of Energy (DOE) and the U.S.
Environmental Protection Agency.
Federal agencies should also commit to purchase the resulting
high-efficiency products to meet their procurement needs, buttressing
their current commitment to purchase energy-efficient
products. By encouraging direct financial incentives, a higher degree
of market certainty, and/or a clear efficienct t the consortium he s
manufacturers economical 'usti retooling to produce higher efficiency
products. Establishing a market leadership position in energy-efficient
products would provide U.S. companies with a substantial opportunity to
capture world markets.
Expand Federal Procurement Efforts to Develop
The federal government is the world's largest single customer for most
energy-related products ($10-20 billion per year); total state and local
government purchases are more than triple this
amount.91 The EPAct and
Executive Order 12902 encourage federal agencies to buy products in
the upper 25 percent of the market based on energy efficiency, and to
use their buying power to help commercialize new technologies.92 Work to implement these polices
should continue and be expanded if possible.
Markets for Energy-Efficient Products
Federal agencies should allocate two percent of energy-related product
purchasing to advanced, efficient and renewable energy technologies to
help create a market for new technologies
stimulated by Golden CarrotTM incentives. A
life-cycle cost of federal purchases should be based on the prevailing
commercial cost of fuel and electricity, plus a modest factor for
environmental externalities. State and local governments should be able
to use the U.S. Government Services
Administration catalogs and schedules, and to purchase efficient
products through the U.S.
Department of Defense, Logistics Agency. The U.S. Department of Energy
should work with other agencies to publish a best-practice guide in
Improve Technology and Information Transfer
Energy-efficiency technology and information transfer was recognized as
a barrier to the market penetration of energy efficiency technologies
and products by Congress in the EPAct. The public
and private sectors should continue efforts to eliminate the
information transfer barrier through
education programs, product literature, and other initiatives.
Utilities have constructed four regional energy centers with little if
any, financial support from the federal government. The
present DOE grants to establish or enhance 10 regional energy centers
created by EPAct should be expanded to construct 25 such centers by
2000.93 The appropriate federal
agencies should also encourage state governments to require energy
efficiency information in
their educational curricula, provide more information via the Internet,
and expand energy efficiency labeling to include more products.
Expand Cost-Effective Efficiency Standards
Programs to develop cost-effective and technically feasible energy
efficiency standards could be expanded in several areas.
- Standards for new buildings could be made more stringent and/or more
effectively implemented. States and certain federal agencies already
have responsibility under EPAct and other legislation to periodically
upgrade and effectively implement building efficiency standards, and the
DOE shoul.d continue to support these efforts.
- Standards for most residential appliances and equipment, packaged
heating, cooling and water heating units used in commercial buildings,
fluorescent light ballasts and tubes, reflector lamps, and most 1-200
horsepower electric motors have been established by statute and DOE
should continue to periodically review (usually every five years) and
update these standards as required.
- Currently, DOE is determining whether standards would be technically
feasible and economically justified for high-intensity discharge lamps,
distribution transformers, and small (
- DOE also has authority to--and should--establish cost-effective and
technically feasible standards for other (generally unspecified)
categories of equipment. It has proposed standards for televisions and
should establish standards for other categories, such as office equipment,
where is it cost-effective.
- If necessary, new authority should be sought for economically
justifiable standards in other areas (such as industrial equipment other
The energy, environmental, and economic benefits that might result from
expanded and/or more stringent efficiency standards for buildings or
equipment are uncertain, but could be as large as $10 billion.
Maintain Federal Research & Development Emphasis on
The finite available funding for federal research and development
programs for electric generation technology should continue to be shifted
toward renewable resource and high efficiency fossil technologies.
Renewable and Clean Fossil Energy Technologies
DOE programs are currently focusing on several areas aimed at the goal
of cost competitiveness, increased efficiency and improved environ-mental
performance for fossil electric generating
systems. These initiatives should continue. However, in a sustainable
economy, renewable electric generation technologies are preferred over
those that are not renewable due to their lower overall
environmental impact. Accordingly, to move toward a sustainable energy
environment, federal electric generation research and development funding
should continue to focus to a larger extent on renewable technologies.
To that end, a Renewable Technology Commercialization Program modeled
along the lines of the Clean Coal Technology Program should be
implemented. The clean coal effort has been a very successful
market-driven program that leverages federal resources with a high
degree of private sector funding to accelerate the commercialization of
clean coal technologies.94
Historically, renewable electric generation technologies have received
less federal research development and
demonstration funding as compared to other generation technologies.
Although the DOE has increased funding for renewable technologies by 66
percent--to $228 million in FY 1995--funding allocations for nuclear,
coal, and other generating technologies still receive 75 percent of
the available funding. Furthermore, funding for fusion technologies
has increased slightly in recent years and will still account for $145
million more than renewables in 1995.95
Important fossil generation technology development programs include: the
Advanced Clean/Efficient Power Systems Program, which supports advanced
power systems that achieve minimal environmental impact, high thermal
efficiencies, and reliability of supply; Advanced
Research and Technical Development Activities, which supports research
for super-clean, high efficiency coal power systems; the Clean Coal
Technology Program, which supports 45 commercial projects to which the
private sector has contributed 66 percent;96 the Advanced
Turbine Systems Program, which seeks to increase the efficiency of gas
turbines and reduce nitrogen oxides emissions; and the Fuel Cells
initiative, which is to lead to the commercialization
of highly efficient, environmentally superior power systems fired by a
variety of fuels.
While these initiatives continue, a meaningful market-based renewables
initiative should be implemented modeled after existing programs and
sharing the incremental technological and
economic risks associated with the commercialization of technologies in
the United States and in developing counties.
Incorporate Sustainable Development into
Without question, disaster response should focus on helping people
return to their normal lives as quickly as possible. However, current
relief assistance only funds rebuilding buildings and
communities the way they were before a disaster. This is generally
with little or no attempt to provide communities the opportunity to
safeguard against natural disasters, reduce human
prove conflict with natural systems, decrease the consumption of
non-renewable resources, increase the quality of the built environment,
and move toward their economic, environmental, social, and
cultural goals. The paybacks to communities and homeowners who are
able to rebuild using energy efficient technologies can be as short as
two to six years and many upgrades can be
funded with, government loan guarantees, utility rebates and state
Federal Disaster Recovery Assistance
The federal government expended over $6 billion in disaster relief
assistance in 1993, with no attempt to provide communities the
opportunity to rebuild using more sustainable technologies
and practices." The Federal Emergency Management Agency, the U.S.
Departments of Energy, Transportation, and Housing and Urban
Development, and the Small Business Administration
should accelerate efforts to include the principles of sustainable
development in their disaster
assistance and coordinate the application of all existing public and
private resources in times of
emergency. An executive order and/or legislation should create a
permanent interagency "swat team" to coordinate and implement this
common sense work.
Focus Export Assistance to Increase U.S. Exports
This policy proposes to expand current initiatives to promote the
commercialization and exportation of renewable energy technologies by
establishing a Renewable Energy Finance Fund
using an existing financial institution. This Fund would provide
long-term project financing (10-15 years) at world market rates for
renewable energy projects that have signed long-term
contracts to sell the power to a utility or a government entity.
and Build Markets for Renewables in Developing Countries
The major obstacle to selling U.S. renewable energy products and
projects in the lesser developed countries is the lack of financing
sources compared to those available to conventional
fossil energy projects. This policy would provide a pool of funds to
allow U.S. companies to take advantage of the emerging power markets that
are now being exploited by European competitors
with financing from their governments. Modular renewable technologies
may bring electricity to regions of the lesser developed countries that
have no electrical infrastructure at a much lower
cost than building the infrastructure and central station electric
generation. This fund could be established by using institutions such as
the Overseas Private Investment Corporation or the
Export-Import Bank. Exporting renewables helps the balance of trade and
creates domestic jobs that promote global sustainability.
Support the Partnership for a New Generation of Vehicles
The Partnership for a New Generation of Vehicles focuses government and
industry research and development resources on a consensus set of goals
and timetables that will preserve personal
mobility while enhancing national competitiveness, reducing petroleum
imports, and reducing emissions of greenhouse gases and pollutants." The
partnership's three primary goals are to:
- Significantly improve national competitiveness in manufacturing by
pursuing advances that could reduce production costs and product
- Pursue and implement commercially viable advances that can lead to
improvement in the fuel efficiency and emissions of conventional vehicles.
- Develop a revolutionary class of vehicles that could achieve fuel
efficiencies of up to three times today's comparable vehicle.
The new vehicle would at the same time cost no more to own and operate;
would maintain performance, size, and utility; and would meet or exceed
safety and emission requirements. The timetable is targeted towards
development of a production prototype by 2004 that meets the
above criteria, with research funding that is split about evenly
between government and industry. If successful, this program would
increase energy security, conservation of depletable resources,
and the economic standard of living.
Reauthorize the Intermodal Surface Transportation
The Intermodal Surface Transportation Efficiency Act of 1991 (ISTEA)
signified a dramatic departure from previous transportation
Its reauthorization in 1996 is a powerful and broad lever for supporting
the goals of sustainable development. Conversely,
reauthorizing a version of ISTEA that does not support sustainable
development could seriously compromise work to reduce growth in vehicle
miles traveled, as well as weaken other important
contributions to achieving the Task Force transportation goal and
- The shift in focus of funding from new construction to managing and
maintaining existing transportation systems.
- Greatly strengthened local planning and requirements such that a broader
array of concerns be considered, such as air quality, the environment,
social equity, land use, energy efficiency and economic development.
- The ability of states to shift a portion of funds from highway
projects to other modes.
- Aspects that promote the development of integrated, multimodal
- Greater public participation in the decision-making process.
- Management systems that are created to track the performance of
pavement, bridge, transit, safety, congestion, and intermodal
operations; and provisions to coordinate goals, implementation, and
enforcement measures with other legislation, including Title VI of the
Civil Rights Act, the Clean Air Act Amendments of 1990, the
Americans with Disabilities Act, and so on.
|ADDITIONAL TRANSPORTATION CONSIDERATIONS|
The Energy and Transportation Task Force recognizes that the
policies it has recommended are not sufficient in themselves to meet the
transportation goal. Through the course of its work, the Task Force also
recognized the significantly greater analytical resources available to
the Presidential Advisory
Group on Greenhouse Gas Emissions from Personal Motor Vehicles and
agreed not to make recommendations on policy approaches that were to be
central to the deliberations of that advisory committee. Although the
advisory group completed its work without issuing a consensus final
makers can refer to the advisory group's docket for additional
recommendations to move the nation closer to transportation goals in
During the reauthorization in 1997, ISTEA should be designed to further
support efforts to reduce growth in vehicle miles traveled, curb air
pollution, control greenhouse gas emissions,
and help stimulate sustainable economic development. ISTEA should
permit states or regions to chose to invest federal transportation
funding for intercity rail projects. Specific items that could
strengthen ISTEA's support of sustainable development include
establishing a system that uses performance measures to determine how
well transportation investments are helping to meet
stated goals. Locally set land use performance measures could also be
included in ISTEA reauthorization to encourage closer linkage between
land use decisions and transportation investments. ISTEA's impact
cannot be understated. It not only authorized the amount of federal
money that would be spent for transportation ($155 billion over six
years in the 1991 act) but also largely specified how that money would
be spent. A similar level of funding is expected for reauthorization.
Appendix A: Scenario Narratives
Table of Contents