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Policy Institute Takes on the News

Check here for our weekly take on what’s happening in the news and the policy implications in California and beyond.

 

Week of January 18, 2021

 What’s Happening – California’s new economic recovery plan prioritizes Zero Emissions Vehicles

Governor Gavin Newsom is proposing a $4.5 billion economic recovery plan to kick off the 2021-2022 budget. Alongside helping Californians and small businesses through the COVID-19 pandemic, the proposed recovery plan will dedicate a third of the budget to the transition to zero-emission vehicles (ZEVs) by 2035. Nearly $1.5 billion will be invested in the construction of electric charging and hydrogen fueling stations for ZEVs in the private market and in subsidies for low-income Californians purchasing ZEVs. The funds propose to support the state’s zero-emissions goals while creating and supporting jobs, economic growth, and improved air quality benefits during California’s recovery. The remainder of the budget will be allocated to workforce development and retention, fee waivers and grants for small businesses who had to stop or reduce operations as a result of the pandemic, funds for deferred maintenance of state infrastructure, and the development of more than 7,500 new permanently affordable homes. As the confirmed COVID-19 cases continue to rise in California and bring about economic changes, California’s priority is to provide equitable, broad-based recovery.

Here’s Our Take

The proposed plan, while providing necessary economic relief for Californians and businesses affected by the COVID-19 pandemic, will support Newsom’s executive order to phase out the sales of gasoline powered vehicles by 2035. The executive order, announced in September 2020, is focused on reducing the state’s dependence on fossil fuels and supporting workers and job retention and creation. Researchers at UC Davis estimate that the cost of transition to an all ZEV market by 2035 will require an investment of around $20 billion that then pays off in fuel savings and reduced vehicle maintenance, as well as reduced emissions. $1.5 billion is a significant initial investment to kick-start this transition. However, to sustain the funding for the transition a new, separate funding system may be necessary to provide additional financial incentives for consumers.

Week of January 4, 2021

 What’s Happening – Massachusetts will require all car sales to be EVs by 2035

As part of the commonwealth’s goal of achieving carbon neutrality by 2050, the Governor of Massachusetts has released a plan to dramatically reduce carbon emissions over the next decade. A crucial component of that plan includes a requirement that by 2035, all new light-duty vehicle sales must be zero-emission vehicles (ZEVs). Governor Baker highlights the importance of this action as the impacts of climate change become costlier and increasingly dangerous. These new standards align with the goals of the Transportation and Climate Initiative, a regional collaboration of Northeast and Mid-Atlantic jurisdictions, which would set a cap on vehicle emissions beginning in 2023. Massachusetts recently became one of the first states to officially commit to that cap-and-invest program. Revenues generated from the program will be used to invest in sustainable transportation and EV charging infrastructure.

Here’s Our Take

This pledge made by Massachusetts follows a similar commitment made by California’s Governor Newsom earlier this year. Both states have set the same target of mandating that all new light-duty vehicle sales after 2035 be ZEVs. California is planning to codify this target by extending its existing ZEV mandate, which now goes through 2025, to 2035. To proceed, California will require a Clean Air Act (CAA) waiver from the US EPA or a federal adoption of the same regulation, though it is unlikely EPA or Congress would adopt such an aggressive target.  The waiver, and California’s authority to proceed beyond federal EPA requirements, is widely expected to be granted. This waiver enables not just California to proceed, but also other states who wish to imitate California’s standards, under the authority of section 177 of the Clean Air Act. More than 10 other states have adopted California’s 2025 ZEV mandate for themselves; they and others may choose to follow the new 2035 rules as well, though in practice these new 2035 rules are not likely to be adopted by California’s Air Resources Board until at least mid-2022. 

 

Week of December 21, 2020

What’s Happening – Alliance for Automotive Innovation sets agenda (1 of 2)

The Alliance for Automotive Innovation has set out a series of policy guidelines needed to successfully electrify and automate vehicles in the US. The alliance represents various automakers and suppliers, including the Detroit 3, Volkswagen, Toyota, and other transportation tech companies. Together, they have drafted national objectives essential to encouraging the future of electric vehicles (EVs) and automated vehicles (AVs). The agenda laid out by the alliance includes participation from state and federal governments so there are incentives for both manufacturers and consumers. Investments in a national EV infrastructure is a crucial part of this plan because the proposed policies will accelerate and incentivize the production and sale of electric vehicles.  Another important aspect is the AV policy roadmap, unveiled earlier this month, which recommends policy initiatives and a national pilot program to encourage the development of AVs in the US.

Here’s Our Take 

The Alliance for Automotive Innovation is a recently-combined industry association of both global and US automakers, which reflects the increasingly global vehicle market and supply chain. The Alliance points out that incentives, job programs, and investment in infrastructure will accelerate the electrification of the transportation sector in the US. All of this is true – these are important policy components of the shift to clean transportation. However, missing from their initiatives is the importance of policies to accelerate the sales of electric vehicles, and their investment in advertising and informational campaigns for EVs. Advertising campaigns by the automakers will be crucial to improving consumer awareness of available incentives and the benefits of EVs, and we’ll look to the Alliance to help guide that effort. And while it is no surprise that they don’t highlight sales mandates and performance standards, these policies have been the key factor so far in supporting EV deployment in California and other states.

 

What’s Happening – Automated Vehicle deployment (2/2)

The California Public Utilities Commission is responsible for regulating business models for for-hire transportation. In November, the CPUC moved the Automated Vehicles (AVs) Program from pilot to deployment. The decision makes several important changes to the way AV operators can give Californians rides. The decision starts out by simply setting state goals for AVs, including protecting passenger safety, improving access, and reducing emissions. The decision also gets deep in the specifics of how AVs can operate for commercial service in such a way that protects public safety and the environment. Some details to note include the decision to lift a previous ban on ride pooling and a ban on charging fares, which will allow a market to emerge for AV rides. The decision also expands data collection efforts, sending a clear message to AV operators that the state will keep a close eye on how AVs are integrating into California’s communities. 

Here’s Our Take

The goals established in the new AV program are nation leading. California is the only state in the nation that has set out environmental policy targeting AV emissions (through SB1014), and this decision expands on that policy. It ensures that regulators are committed to a future where AVs leave an equitable and sustainable footprint on our communities by allowing AVs to be shared or pooled. There was a broad consensus of support for pooling among the 20+ parties to the proceeding that AV pooling is necessary for AVs in order to meet traffic and sustainability goals. 

Regarding AV accessibility for people with disabilities, the CPUC made progress, though some believe they could have gone further. Some cities and agencies suggested that the CPUC should require universal design principles from the beginning, requiring all AVs to be equipped for full accessibility for people with disabilities. Instead, the CPUC has chosen a lighter-touch approach, only requiring AV companies to submit reports that ensure that safety measures apply to all passengers, including those with disabilities. This is a move in the right direction, but it is not yet clear if this will result in safety or equivalent AV service for Californians with disabilities, and if this will result in locking in existing designs for vehicles, information disbursal, and payment processing, all of which often fail riders with disabilities.

For more discussion on the nuances of this decision please see this Op-Ed: Pros and Cons of the California Public Utility Commission Decision to Deploy Automated Vehicles.

 

Week of December 7, 2020

What’s Happening – UK Moves EV Target to 2035

The UK has set forth a new goal of banning sales of conventional fossil fuel vehicle sales by 2030 and only allowing zero-emission vehicles from 2035. This is a part of a 10 point plan by the UK to induce what they have been calling a new ‘green industrial revolution’. This is an acceleration of their previous goals to ban sales of fossil fuel cars, which was previously set for 2040. The government has committed to invest around $1.7 billion into the development of battery technologies and infrastructure. The plan includes investment into public and at home charging infrastructure and electric vehicle incentives.

Here’s Our Take

As various countries around the world join the effort to combat their carbon emissions, we are seeing many more national pledges to phase out gas-powered vehicles. We have seen aggressive ZEV transition plans from Norway, and now the UK joins both Sweden and Ireland with their goals of banning the sale of light-duty gasoline and diesel vehicle sales by 2030. The main goal of these sales bans is to decarbonize the transportation sector, to stoke demand for new ZEVs, and encourage manufacturers to make them more available and affordable.

Most importantly these ambitious ZEV targets will require supportive policies if they hope to convince consumers to buy the vehicles. Over the next few years, we will see many more international pledges to reduce transportation emissions, and assess which policies will be most effective in encouraging ZEVs for consumers. The UK plan includes funds for consumer incentives and charging investments. We know from our research that incentives become more important over time as we move from early adopters to mass-market consumers.

 

Week of November 23, 2020

What’s Happening – Auto sales boom in second half of 2020

When the COVID-19 shutdowns hit the U.S. early this year, both analysts and automakers alike understandably expected the major drops in auto sales to last all year — but reality has not turned out that way. A short segment from NPR highlights that the late summer months proved especially profitable for companies like GM, Ford, and Fiat Chrysler, with Fiat Chrysler seeing record sales. Analysts attribute this boom in sales to pent up demand from earlier in the year. Car sales among millennials may be due to increased appeal for traveling in cars for vacations, hiking, and outdoor activities. Many automakers, like GM and others, have announced plans to use these profits to invest in their electric vehicle design and manufacturing infrastructure.

Here’s Our Take

Early in the pandemic, as many countries implemented mandatory quarantines and people traveled less, we saw a reduction in the carbon emissions worldwide, which was seen as a silver lining. However, these climate benefits were short-lived. As car sales rebound faster than predicted, transportation emissions are increasing. In a UC Davis ITS survey from August, researchers found that nearly 37% of respondents reported using buses and public transport less often compared to last year, with an overall net reduction in traveling. These results are understandable given the concerns over sharing space, but nevertheless, a reduction in public modes of transport undermines the pursuit of sustainable mobility. Transit continues to lag behind the renewed surge in car use. A huge sales rebound in vehicles like we’re seeing during the coronavirus pandemic underscores the necessity for clean transportation policy–to enhance shared travel and accelerate the sales of zero emission vehicles.


Week of November 9, 2020

What’s Happening – Airbus plans for a zero emission plane

Airbus has set forth ambitious plans to design a carbon-free hydrogen-fuel commercial airplane by 2035. Because of the time it takes to go from concept to production in the aircraft industry, Airbus states they would need to identify a safe technology within the next 5 years. They will face a number of technical challenges in doing so. Finding enough space (which comes at a premium on aircraft) for fuel tanks on the plane may be a key challenge; hydrogen takes up a lot of space, even when compressed to many times atmospheric pressure. Although using hydrogen as power for aviation has been discussed for decades, the risk (real and perceived) and infrastructure needed to safely conduct trials has been an impediment. Overall, the safety bar will be high, given that the airline industry relies on a very strong safety record.

Here’s Our Take

Although road transport accounts for most of the carbon emissions worldwide, it is important to assess ways to decarbonize in all industries. The aviation sector is a particular challenge because it lacks the variety of decarbonization options available to on-road vehicles due to power and range requirements and the need to counter the weight of onboard energy storage with lift. Batteries may be too heavy and biofuels, while promising, are not yet carbon neutral. Many technical questions remain to be answered. For example, we are curious why Airbus’ initial proposal calls for the hydrogen to be burned in a turbine, instead of converted to electricity in a fuel cell that powers an electric motor. Using hydrogen fuel cells would be much more efficient, and therefore would also require less fuel storage onboard. That said, if Airbus can successfully create a carbon free aircraft, this will be a huge contribution towards transitioning to a carbon-free transportation system.


Week of October 26, 2020

What’s Happening – GMC to Release New All-Electric Hummer

General Motors Company (GMC) took advantage of some advertising time during the 2020 World Series to make a big announcement. They will be producing their first all electric truck—and it’s a big one (literally)—the return of the Hummer, which will be available starting in Fall of 2021. GMC has promised that this new EV will flaunt some new features such as improved off-roading abilities, extremely quick charging times of up to 100 miles range in 10 minutes, and new technology by GMC that involves hands-free driving capabilities. GMC is investing around $2.2 billion towards new efforts in their EV production facilities. However, GMC will face lots of competition from other companies like Tesla, Ford, and Rivian, who already have their own models of all electric trucks. These companies are expected to have lower starting prices for their EVs than the GMC EV Hummer.

Here’s Our Take

As electric vehicles become more widely deployed, automakers have started manufacturing EVs outside of sedans to encompass a larger market share. Companies like Tesla, Ford, Rivian, and now GMC have recognized these patterns and are taking initiatives to move forward with the growing EV market. California’s new clean trucks/vehicles standard is designed to encourage companies to innovate new types of EV, and it’s very encouraging to see automakers start to compete over performance and really try to sell their electric models.

One interesting policy question is if it will weigh over 8500 lbs, like several of the previous versions of the GM Hummer. Over this weight, the vehicle will be a class 2b or 3 truck, and therefore not included in the same fuel economy standards as other personal vehicles. Historically, having these heavy trucks was a way for automakers to avoid improving fuel economy. But since the EV Hummer will have a very high effective efficiency and low emissions (as do all electric vehicles), GM would (somewhat ironically) actually benefit from it being included in their overall fleet accounting if they could. On the other hand, the heavier vehicles would count as clean trucks under California’s new Advanced Clean Trucks rule once implemented—which would give GM a way of meeting this mandate for zero emission trucks in in the 2b/3 truck category.


Week of October 19, 2020

What’s Happening – California’s Rolling Blackouts Point to Need for Grid Resiliency

Nearly one million Californians lost power in the span of two days in mid-August in a series of rolling blackouts, and additional public safety power shut offs were scheduled in 24 targeted counties as a result of red flag weather conditions. Rolling blackouts are a rare occurrence in our modern electrical system, and haven’t occurred in nearly two decades since the last energy crisis. The State of California released a report last week, which found three preliminary root causes of why these rolling blackouts happened. The first of the three was a “climate-change induced heat storm”, which the resource planning process was not prepared for. Second, there was insufficient integration of renewable sources of energy, like wind and solar, which caused lowered available energy capacity during evening hours. Lastly, there were issues with the complex day-ahead market in the state, which allowed operators to sell energy to other states even with a looming crisis.

Here’s Our Take

Extreme weather resulting from climate change was clearly a major contributor to the rolling blackouts, but this report also highlights that the electrical grid is a big part of the problem. As California transitions toward more clean energy sources, such as solar and wind, we need to plan for a grid that is reliable, clean, and resilient. We need to collectively push for more grid flexibility and integration of new resources like demand response, electric vehicles, and adequate storage capacity. Policy-wise, this will mean being prepared to value these services, including from novel options like microgrids.


Week of October 12, 2020

What’s Happening – China Sets Goal for Carbon Neutrality by 2060 (1 of 2)

China recently announced plans to reach carbon neutrality by 2060. This is a significant step beyond their previous goal, which was to peak their carbon emissions by 2030 as part of an agreement with the Obama administration prior to the Paris Climate Accord in 2015. This new carbon neutrality goal exemplifies a recurring trend of leadership being taken by countries around the world to address climate change, and is particularly important because the UN Conference of the Parties was set to meet this year but was canceled due to COVID-19 precautions. The postponement of the UN climate meeting may result in the delay of agreements that need to be made on carbon emissions reduction targets.

Here’s Our Take

As the biggest emitter of carbon dioxide in the world, and a growing economy, China’s commitment is a significant announcement toward reducing global greenhouse gas emissions. In the past, China has also worked with California to develop a New Energy Vehicles program which will support both economies in lowering their carbon emissions. However, despite China’s progress, the country still relies heavily on fossil fuels and continues to construct new coal-fired power plants to meet demand in a developing economy. Coal would need to be retired in favor of more renewable energy sources to reach the stated carbon neutrality goal. Policymakers, scientists, and many others will be watching to see how China’s commitment plays out in their next five year plan, and how they will translate the goal into near-term policy, as called out by John Podesta and David Sandelow in the Financial Times. Now that China has made a commitment to carbon neutrality, the proverbial ball is in the United States’ court.

What’s Happening – Waymo Introduces Driverless Taxi Service, but Policy Lags Behind (2 of 2)

Waymo, a company owned by Google, is introducing the very first publicly available driverless taxi service. After roughly two-years of a strictly controlled trial period, the company is launching service of over 300 minivans through its app, Waymo One, in Arizona. However, they are prioritizing these first rides to already existing customers. Because this transportation alternative didn’t have drivers who could potentially be a risk for covid exposure, it was among the few shared mobility options that weren’t severely affected at the beginning of the coronavirus outbreak back in March. Before that, the driverless cars were only a 5-10% of their rides, but now this fleet of minivans are fully operational within a 50 mile radius in Phoenix, Arizona. Close on their heels is an announcement by Cruise that they are now approved to test fully driverless vehicles in San Francisco.

Here’s Our Take

There has been much speculation over the timing of deployment of completely driverless, or self-driving, vehicles. With technology that could result in life or death consequences, it is of utmost importance that caution and safety measures are prioritized. Waymo and most other driverless technology companies are taking a slow and cautious approach to ensure that their technology is safe and secure for riders. As the development of automated vehicles continues to progress, this technology has the potential to completely reshape the world of transportation. These and other recent announcements give a sense that the pace of deployment may speed up soon. Even with the slow roll out so far, policy lags behind. Researchers at UC Davis have proposed guidelines for states to enact safe, equitable, and sustainable AV policy.

Developed by the Policy Institute in partnership with the Institute of Transportation Studies at UC Davis.


Week of October 5, 2020

What’s Happening – Consumer Reports Study Highlights Maintenance Savings from EV Ownership

In a new report by Consumer Reports, researchers have found that owners of EVs are spending half as much on repairs and maintenance costs compared to those with gas-powered vehicles. This analysis confirms the long-held expectation that because EVs have fewer parts than traditional gas-powered cars, the maintenance costs would be significantly less. According to one of the authors of the study, senior transportation policy analyst Chris Harto, the savings for the EV owners are “going a long way to offset the upfront costs”, which is often a monetary obstacle that many consumers consider.

Here’s Our Take

As the deployment of EVs has gone forward and we learn more, each year the consensus estimates the benefits of electrifying transportation, reduced vehicle cost, and lowered battery price. Owners of EVs enjoy the advantages of saving money on both fuel and maintenance, in addition to the more general benefits that EVs have in reducing harmful pollution than conventional cars emit. This study also shows how EVs can benefit lower-income households who may be struggling with unexpected car repair bills and any others who are seeking greater reliability in a vehicle. So far, cost-benefit analysis of policies hasn’t included the potential benefits of cheaper maintenance — hopefully future iterations can do so.

Developed by the Policy Institute in partnership with the Institute of Transportation Studies at UC Davis.

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