Is public transportation the right vehicle for market transformation?
Vehicle emissions have been in the news recently as standards for passenger cars come under attack. While California fights the Trump administration’s plan to roll back automobile emissions controls, it’s also pursuing regulations for a different kind of tailpipe. Last week, California proposed requirements that would drive tailpipe emissions from new transit buses to zero by 2030.
In many respects, public transit buses look like small potatoes compared to passenger cars and trucks. Transit buses account for less than 0.2 percent of particulate emissions in California and a very small share of the state’s GHG emissions inventory.
But Zero Energy Bus (ZEB) proponents argue there are a number of reasons why policymakers should pay attention to public buses. One is that buses disproportionately serve and impact low-income communities. Greening up public transit helps deliver on our important obligation to direct local emissions reduction benefits towards disadvantaged groups. Another argument invokes the promise of market transformation. Techno-optimists argue that the public bus provides a gateway to decarbonizing the heavy-duty transport sector.
Reduced noise, reduced local air pollution, reduced GHGs, green tech deployment. There’s a lot to love about ZEBs! But when resource-constrained transit agencies are struggling to deal with declining ridership and increasing competition from sexier (mostly-car based) mobility alternatives, I’m concerned about what gives when we mandate costly investments in zero-emission buses.
When it comes time to purchase a new bus, agencies have a variety of options to choose from. A recent paper looks into the cost implications of this choice. UC Davis researchers model the distribution of costs (including investment, operations and maintenance) across more than 150 California transit agencies. The graphs below show how estimated costs vary across agencies with different fleet sizes, route structures, etc.
Note: The analysis evaluates how the cost of bus replacement varies with technology over a three-year period. See the paper for details.
For a number of reasons (e.g. higher purchase price, fuel costs, infrastructure costs), electric buses (blue) are more expensive at today’s costs. Investment costs are expected to come down. Maintenance costs should also fall as we gain experience with these buses. If forecast cost reductions are realized, ZEBs look more competitive by 2030. But at least for the near term, most transit managers are not going to jump on the electric bus without policy incentives or regulatory requirements.
Of course, these cost calculations have omitted some important social cost considerations. This recent report shows significant differences in emissions rates across buses types.
To put these GHG numbers in perspective, consider the difference in GHG emissions between a 2018 electric and conventional CNG bus is estimated at 2725 grams/mile. Assuming marginal damages of $50/metric ton, that’s $0.14 in avoided damages per mile. Or around $5450 per year.
The report also finds significant differences in harmful local pollution emissions such as PM2.5:
This appendix provides more detailed estimates for different technologies and pollutants.
Policy Carrots and Fences
Without policies in place to account for these pollution impacts, investment in cleaner buses will be too low/slow. This being California, we already have a bundle of programs designed to nudge transit agencies into cleaner buses:
- Low Carbon Fuel Standard: The LCFS credit works out to $0.10-$0.14 per kWh (or higher given recent LCFS prices). Assuming 2.3 kWh/mile, that’s a subsidy of $0.28/mile (which greatly exceeds my crude external damage estimate of $0.14/mile).
- Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project (HVIP) provides purchase subsidies for electric transit buses. Subsidies exceed $100,000 per bus if investments benefit disadvantaged communities.
- Volkswagen $$: As part of the VW settlement, California will receive $423 million in compensation for emissions damages. $130 million is earmarked for ZEB investments.
With all these carrots, you might reasonably question the need for regulation that requires transit agencies to purchase ZEBs. Proponents argue that standards and mandates are needed to force innovation in heavy duty vehicle electrification and that public transit buses are an ideal test bed.
But these market transformation benefits do not come for free. In this February statement, the California Transit Association cautions:
“Don’t make us sacrifice expanded transit service for the gleam of high-cost technology that isn’t ready for prime time!”
Is public transportation the right vehicle for market transformation (and if so who should pay for it)?
We’ve raised concerns about prescriptive mandates on this blog before (see here and here). In this case, the proposed ZEB mandate has off ramps and some flexibility, which is important. But if the regulation binds, which seems likely, it risks undermining the purposes it’s supposed to serve.
First, if the mandate imposes costs on strapped transit agencies, this could crowd out needed service quality improvements. This would hurt the low-income communities that are disproportionately dependent on public transportation.
Second, if service quality stagnates or falls, public transportation will have an even harder time competing with the convenience of cars. In the U.S., public transit ridership has been falling since 2014. Last year alone, bus ridership in the United States fell 5%.
The uncertain future of public transit depends on many factors which are beyond the control of transit agencies or even transportation policy. But given the challenges ahead, it seems like now is a time to be focusing on enabling and complementary policies (e.g. funding service improvements, congestion pricing!) versus imposing potentially costly requirements.
California should buckle down on efforts to reduce tailpipe emissions and accelerate transportation decarbonization. But if public buses are going to be on the front lines of this effort, let’s make sure we don’t throw other fundamental public transit priorities under the bus.