5
RESEARCH AREA 4
EMERGING TECHNOLOGIES

The transportation industry is arguably on the cusp of a technological revolution. In coming years, the industry will be incorporating two largely new sets of technologies that are the focus of this chapter: (a) propulsion technologies and fuels that will change the energy, pollution, and noise characteristics of vehicles; and (b) information, communication, and control technologies that will change the way vehicles are used. An important challenge is to create a policy environment that will facilitate and encourage the proliferation of these environmentally beneficial technologies (DeCicco and Delucchi 1997).

In this chapter, technology is addressed from two perspectives: as a key element of transportation systems that often leads to adverse environmental impacts, and as a source of solutions to environmental problems. The primary concern is with rapidly evolving technologies for vehicles, fuels, vehicle– highway user-support systems [i.e., intelligent transportation systems (ITS)], and telecommunications in the context of energy efficiency and supply, air quality, and climate change. A proliferation of new propulsion, fuel, information, communication, and control technologies are becoming available, promising major enhancements to the performance and environmental sustainability of transportation services and activities. The focus of this chapter is on those emerging technologies that have the largest potential environmental impacts, both negative and positive, but have not yet been fully addressed by publicly supported research and development (R&D).

Since technology is a broad category encompassing a vast array of material and knowledge sets, the aim in this chapter is not to be all-encompassing. Not addressed here, for example, are technologies for the construction and



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Surface Transportation Environmental Research: A Long-Term Strategy - Special Report 268 5 RESEARCH AREA 4 EMERGING TECHNOLOGIES The transportation industry is arguably on the cusp of a technological revolution. In coming years, the industry will be incorporating two largely new sets of technologies that are the focus of this chapter: (a) propulsion technologies and fuels that will change the energy, pollution, and noise characteristics of vehicles; and (b) information, communication, and control technologies that will change the way vehicles are used. An important challenge is to create a policy environment that will facilitate and encourage the proliferation of these environmentally beneficial technologies (DeCicco and Delucchi 1997). In this chapter, technology is addressed from two perspectives: as a key element of transportation systems that often leads to adverse environmental impacts, and as a source of solutions to environmental problems. The primary concern is with rapidly evolving technologies for vehicles, fuels, vehicle– highway user-support systems [i.e., intelligent transportation systems (ITS)], and telecommunications in the context of energy efficiency and supply, air quality, and climate change. A proliferation of new propulsion, fuel, information, communication, and control technologies are becoming available, promising major enhancements to the performance and environmental sustainability of transportation services and activities. The focus of this chapter is on those emerging technologies that have the largest potential environmental impacts, both negative and positive, but have not yet been fully addressed by publicly supported research and development (R&D). Since technology is a broad category encompassing a vast array of material and knowledge sets, the aim in this chapter is not to be all-encompassing. Not addressed here, for example, are technologies for the construction and

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Surface Transportation Environmental Research: A Long-Term Strategy - Special Report 268 maintenance of safe, environmentally friendly facilities; technologies and infrastructure for protecting wildlife (e.g., tunnels and road overpasses for animals); technologies that provide incremental information-based improvements in traffic and fleet management; conventional transit and railroad services and technologies; telecommunications electronics; fuel manufacture and distribution; crashworthiness and crash-avoidance technologies; and whole-vehicle design and manufacture. The Advisory Board elected not to discuss these technologies because they are adequately covered by other research programs, such as the National Cooperative Highway Research Program; because they are central to industry R&D activities; because they may have little effect on environmental quality; because they facilitate only small incremental changes; or because they are covered in other chapters (in particular, technologies to protect wildlife are covered in Chapter 3, while improved planning and decision-making tools are covered in Chapter 7). On the other hand, emerging mass information services, although not technically classified as transport technologies, are included in this chapter to the extent that they have the potential to transform the manner in which the transportation system is currently utilized. This transformation could dramatically influence transportation’s impact on the environment. SURFACE TRANSPORTATION AND EMERGING TECHNOLOGIES Government plays a central role in guiding the development and diffusion of environmentally beneficial technologies. It regulates emissions, energy use, and safety; provides R&D funding through various programs; and owns and manages many transport services, facilities, and activities. But rapid advances in a range of technologies can render government policies, rules, and R&D programs anachronistic, while the marketplace treats environmental attributes largely as externalities. A role for government is necessary to ensure the wise use of technology— this despite the fact that government seldom has perfect information and is routinely lobbied by special-interest groups that may have little or no interest in environmental protection. The problem is illustrated by the unintended consequences of some government-inspired initiatives, including the federal-aid highway program, which has led to species separation; dredging by the U.S. Army Corps of Engineers, which has reduced wetlands and destroyed marine habitats; and the development of large state- and municipal-owned airports that have

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Surface Transportation Environmental Research: A Long-Term Strategy - Special Report 268 expanded noise footprints. Moreover, the government’s decision not to price the use of congested roads at the point of consumption has led to excessive road use, with associated pollution and noise impacts. It is important, then, that any government role regarding the use of transportation-related technologies be premised on a strong knowledge base to minimize the chances of negative environmental impacts. And given government’s expanding role in overseeing the environmental effects of transportation technologies, the challenge is to ensure that the potential benefits of new transportation technologies are realized in a cost-effective manner. These benefits are direct in reducing pollution, energy use per vehicle-mile traveled (VMT), noise, and so on, but also indirect in catalyzing shifts in travel patterns to more environmentally benign travel forms. Industry is spending billions of dollars annually on transportation-related technologies R&D (AAAS 2000), and major technological changes are about to occur—with or without government direction. A range of new and enhanced research is needed to ensure that government exploits these changes effectively and wisely. A strong, sustained research agenda can address both the opportunities and concerns presented by new technologies. The goals of this research would be as follows: To define and articulate an appropriate and effective role for public R&D in accelerating the development and commercialization of environmentally beneficial technologies (given that government resources are at a much smaller scale than the private investment in transportation technologies). To create a scientific basis for effective and wise government policy-making, investment, and regulation with respect to transportation technologies to serve the ultimate government role of environmental stewardship. To understand the relationship between government regulations and private-sector investments in R&D. Grounded in such a research base, public investment in transportation-related technology R&D can fill critical gaps, leverage billions of private R&D dollars, and ensure the development of a more sustainable and healthy transportation system. The potential payoff is great. At the same time, it must be recognized that user response to technological change can be complex. The environmental balance sheet following the introduction of new technologies depends substantially on large numbers of micro decisions made by both consumers and suppliers about how to exploit the resulting new opportunities. It is important to note that those opportunities are not always

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Surface Transportation Environmental Research: A Long-Term Strategy - Special Report 268 anticipated by the designers and promoters of new technologies; some are discovered or invented by consumers. A recent example is provided by consumers who offset fuel-efficiency improvements by buying more powerful vehicles and driving more miles. The aggregate effects of user responses to simultaneously introduced innovations, as well as interactions between responses, are even more difficult to anticipate. Behavioral responses to the two major technological revolutions discussed in this chapter may result in major changes in vehicle use patterns and concomitant environmental impacts. Current Technology Context The current situation in the United States with respect to transportation and the environment is one of both promise and concern. The largest success story is in the area of air pollution, though progress here is neither uniform nor—as population and travel patterns expand—ensured. Major reductions in vehicle emission rates have resulted mainly from technological advances in combustion efficiency, fuel reformulation, and the treatment of exhaust substances. Urban regions and major corridors have benefited from the elimination of lead in fuel and from major reductions in carbon monoxide. In addition, low-level ozone pollution is slowly improving, primarily as a result of large reductions in hydrocarbon emissions from vehicles. The continuing challenge with regard to air pollution is to reduce the high levels of nitrogen oxides and ultra-fine particulate matter emitted by vehicles. Diesel engines, largely unnoticed by air quality regulators until the late 1980s, are responsible for a significant proportion of these two pollutants. Dramatic reductions in emission rates (per VMT) have been accomplished for carbon monoxide and hydrocarbons, but less so for nitrogen oxides. With large off-setting increases in VMT, the overall effect has been substantial net reductions in carbon monoxide and hydrocarbon emissions, but no net reduction in emissions of nitrogen oxides.1 1 High nitrogen oxide levels contribute to acid precipitation and thus have interregional and international implications, as well as impacts on urban air quality. Vehicular emissions of nitrogen oxide and sulfur oxide combine with industrial sulfur emissions to acidify soils and lakes over long distances. Although a concern for more than three decades, some cumulative effects of soil acidification have only recently been proven (for example, the serious degradation of sugar maple forests in Eastern Canada). Sulfur oxide emissions are a prominent contributor to acid precipitation in most regions. Sulfur oxide emissions from diesel engines were at one time important, but sulfur levels in fuel have been reduced, resulting in a significant decrease in these emissions.

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Surface Transportation Environmental Research: A Long-Term Strategy - Special Report 268 An emerging issue related to vehicles is newfound evidence of the negative health impacts of fine particulate matter (see Chapter 2). Very small particulate matter emitted from diesel engines, but also from gasoline engines, is now recognized as posing perhaps the most significant health hazard of any vehicle-related pollution. Historically, however, improvements in transport-related air pollution have been attributable largely to technology advances. New emission standards continue to be adopted, spurring the development of technologies to meet those standards. It is believed that progressively tighter standards are likely to lead to continuing improvements in the near future, ultimately resulting in near-zero air pollutant emissions from vehicles. Other, more problematic areas in which trends are moving in the wrong direction are fuel consumption and related greenhouse gas emissions. Such emissions are continuing to increase 1 to 2 percent annually in the U.S. transportation sector (Oak Ridge National Laboratory 2000). A growing body of evidence links carbon dioxide (CO2) and other greenhouse gas emissions to major changes in global climate and to such consequences as the flooding of human settlements and natural habitats, changes in growing seasons and water supplies for agriculture, desertification, and the introduction of tropical disease vectors into temperate regions (IPCC 2001) (see Chapters 2 and 3, respectively, for discussion of the human health and environmental impacts of greenhouse gas emissions). The contribution of the U.S. transportation system to greenhouse gas production, in particular the increasing output of CO2, is a major concern internationally. As noted, while the technical energy efficiency of engines continues to improve through more efficient combustion and the use of lightweight materials and improved vehicle designs, fuel consumption continues to increase as a result of the production and sale of larger and more powerful vehicles and growth in travel. Indeed, as noted earlier, both motor vehicle stock and total VMT are growing more rapidly than the nation’s population. This pattern is repeated throughout the world. In other countries, however, private vehicles are, on average, substantially smaller and driven substantially less. At present, the processes by which environment-enhancing technologies are introduced, diffused, and utilized are poorly understood, as is the role the public sector can play in guiding the commercialization of these technologies. As illustrated by the paradox cited above, rapid advances in energy and materials technologies have not automatically led to reduced fuel consumption per VMT. There is a need to refocus research on the demand for vehicles, fuels, and transportation, along with new means of reducing the environmental impacts asso-

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Surface Transportation Environmental Research: A Long-Term Strategy - Special Report 268 ciated with increases in that demand. These issues are addressed below for the two categories of technology advances noted earlier: fuels and propulsion technologies, and information, communication, and control technologies. Fuels and Propulsion Technologies Technologies are now being developed that could further reduce pollution from internal combustion engines in the near term, and new energy-efficient hybrid-electric propulsion technologies are being introduced. More efficient fuel-cell electric technologies also appear to be imminent. Fossil fuels will continue to be available for transport uses throughout the 21st century, mainly as a result of large supplies of natural gas being discovered around the world and increasing use of unconventional sources of petroleum, such as heavy oils and tar and oil sands. Natural gas is attractive because it has lower carbon content than petroleum and is cleaner burning; it also has the advantage that it can be converted to clean-burning liquid fuels at modest cost. However, use of these fuels will increase U.S. trade imports, and after energy losses from conversion and long-distance transport are taken into account, these fuels will tend to generate greenhouse gas emissions at levels similar to those produced by petroleum fuels. Industry is spending billions of dollars annually to develop and commercialize environmentally enhanced fuels and vehicles. A major debate is under way, however, in both public and industry circles over which vehicle technologies are most attractive, which fuels should be used, and which policy instruments are most appropriate. Policymakers today are concerned primarily with reducing air pollutant emissions from diesel engines and with improving fuel economy. Vast sums of R&D funding are directed at these goals, primarily by the automotive and energy industries, but also by government. International, national, and some state governments spend millions of dollars addressing the health effects of diesel emissions; the automotive industry spends billions on reducing emissions from both gasoline (spark ignition) and diesel (compression ignition) engines; and the oil industry is spending billions on reducing sulfur levels, reformulating petroleum fuels, and designing new processes for converting natural gas to clean transport fuels. Consequently, internal combustion engines operating on cleaner petroleum fuels will continue to dominate the automotive market for many years, with natural gas–based fuels and next-generation electric-drive propulsion technologies gradually entering the market.

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Surface Transportation Environmental Research: A Long-Term Strategy - Special Report 268 It is largely accepted that the conventional internal combustion engines and drive trains of passenger and freight vehicles will eventually be replaced by electric-drive technologies; that is, vehicles will be propelled at least in part by electric motors (Box 5-1 provides a brief overview of these vehicles). Less certain is which technologies are most attractive to society, and when and how these changes will occur and what the strategy for transition will be. Related technological issues include recycling of vehicles and the design and manufacture of vehicles using lightweight materials (technologies that are not addressed in this chapter). The overall question is how R&D, public policy, regulatory controls, and public investments can be directed so as to accelerate the development, commercialization, and use of environmentally beneficial technologies in the most cost-effective manner. What publicly funded R&D is needed, and what public and public–private R&D processes need to be put in place to ensure continuity in these public efforts? The huge size of the automotive and energy Box 5-1 ELECTRIC-DRIVE VEHICLES Electric-drive vehicle technologies may be divided into four generic types: Pure battery electric vehicles that store wall-plug or charging-station electricity on board in batteries, ultracapacitors, and flywheels; Pure electric vehicles that obtain their electricity as needed from a rail, wire, or other off-board source; Hybrid electric vehicles that generate some or all of their electricity on board using a combustion engine; and Fuel-cell electric vehicles that convert chemical energy into electricity on board using a fuel-cell system. Common to all four is an efficient and reliable electric motor that drives the wheels, the use of batteries (or other devices) to store energy captured during braking (known technically as regenerative braking), and the advantageous use of electronic technologies for a variety of vehicle control and auxiliary functions.

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Surface Transportation Environmental Research: A Long-Term Strategy - Special Report 268 companies and the cyclical nature of public attention to energy issues have seriously undermined independent R&D capabilities in energy-related transport technologies. At present, major automotive companies, most of which are abandoning plans to build and market conventional-sized battery electric vehicles, are on the verge of deciding whether to make substantial investments in fuel-cell electric vehicles and are beginning to invest in hybrid electric vehicle production. Automotive and energy companies are motivated to develop and commercialize these technologies by a variety of considerations. During the past three decades, the principal motivation for developing and introducing more environmentally benign vehicles in the United States and most other countries has been the desire for clean air and the resulting Clean Air Act regulations. The result has been an extraordinary reduction in vehicle pollutant emissions: average emissions from cars in real-world conditions declined by about 60 to 80 percent per VMT between the mid-1960s and mid-1990s (Pickrell 1999). As suggested above, continuing reductions are certain during the next decade as a result of even more stringent regulations scheduled to take effect in the next few years for both cars and trucks. These emission reductions have been the central focus of automotive research since the early 1970s. The improvements have centered on in-cylinder combustion and treatment of exhaust gases. This high level of R&D attention has generated many important side benefits, including the introduction of computer controls, first deployed to better control the mix of fuel and air entering cylinders. Other strong motivations have been reducing noise, and decreasing the costs and increasing the availability of energy. Much of the motivation for more environmentally friendly vehicles has derived from government through a mix of incentives and technology-spurring regulations. While clean air will continue to be a strong motivation for enhancing vehicles and fuel, climate change is anticipated to play an increasingly important role. Mounting concerns about climate change are strengthening the resolve of governments and automakers to develop cleaner and more efficient vehicles. The European Union signed a voluntary agreement with automakers to reduce CO2 emissions per VMT by 25 percent between 1995 and 2008, and Japan adopted significantly tighter fuel-economy standards in 1999 (Plotkin 2001). The United States has not increased fuel-economy standards for many years, but pressure is mounting for more stringent car and light-truck standards (currently at 27.5 and 20.7 mpg, respectively) and for abandonment of the distinctions between cars and light trucks (NRC 2001a; NRC 2001b).

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Surface Transportation Environmental Research: A Long-Term Strategy - Special Report 268 Information, Communication, and Control Technologies Innovation and change in the transport sector have tended to be slow and incremental. In part, this pattern reflects the institutional complexity of transport systems: a large proportion of transportation activities is in the public sector (e.g., building, operating, financing, and regulating facilities and vehicles); companies in a multitude of industries participate in a variety of ways; and an enormous number of individuals and companies operate vehicles. Nonetheless, system-transforming innovations have occurred that have led to dramatic advances in productivity and societal benefits. We now appear to be on the verge of another such transformation. In the past two centuries, only a few major system innovations have transformed surface transportation. They include interurban railroads in the mid-1800s; electric urban rail, introduced a few decades later; and automobiles in the early 1900s. Railroads transformed the nature of business; electric rail changed patterns of neighborhood development and contributed to the emergence of metropolitan regions; and the automobile altered the locus and variety of human activities. By increasing the speed of travel, these innovations transformed not only transportation, but also much of society. The catalysts for these earlier transformations in transportation were (respectively) the steam engine, electric traction, and the internal combustion engine, together with the associated fuel supply infrastructures. The next era of transformation in transportation will reflect the integration of information and communication technologies into lifestyles and modal choices. The catalyst for this era of “smart transportation” will be electronic and wireless communication systems.2 The major thrust of research in the area of ITS has been advanced transportation management and information systems, which serve to provide a new class of information to drivers, fleet operators, and traffic managers. One of the public goals for these systems is to maximize the throughput and usage of existing roadways. The private goal is to create markets for new products and services, such as navigation devices 2 The one notable exception to the incremental advances in this area is the aborted automated highway program, funded by the Intermodal Surface Transportation Efficiency Act with substantial industry partnerships. This program was not continued under the Transportation Equity Act for the 21st Century, largely because of weak interest by industry (due in part to liability concerns) and opposition from the environmental public-interest community, which feared accelerated urban sprawl. The automated highway R&D program was converted into the Intelligent Vehicle Initiative, a program aimed at near-term safety innovations.

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Surface Transportation Environmental Research: A Long-Term Strategy - Special Report 268 and information services for drivers. Attention and resources are directed primarily at using that information to improve safety and the efficiency of travel and goods movement. Tens of billions of dollars are being invested, mainly by the private sector. The net result of these initiatives will clearly be to improve the current system. At the same time, it is important to note that, as in the past, most innovations and initiatives are aimed at enhancing existing services and patterns. However, lifestyles are also evolving. A broader vision and more systems-level initiatives would likely result in a wider choice of access to activities, services, and products, and in shifts in patterns of consumption that could generate far greater benefits through reductions in congestion and environmental impacts. The potential for a major break from the past is highlighted by the following trends and relationships. Light-duty vehicles account for 95 percent of all person-miles of surface travel in the United States; these vehicles are typically unused 23 hours per day, and all are designed to operate with roughly the same speed performance. Since World War II, transit has progressively lost overall market share, although transit ridership has grown in absolute terms in most major urban regions.3 Personal-vehicle occupancy rates declined until fairly recently and remain low. Vehicle ownership has steadily increased, and more than 60 percent of U.S. households own more than one private vehicle. The overall effect is unprecedented mobility and accessibility. But the situation also leads to massive consumption of resources and the generation of many adverse environmental impacts, while contributing to various social ills. The opportunity may now exist to enhance access to goods, services, and activities while reducing the need for motorized transportation and mitigating its adverse impacts. In the past 50 years, vehicles and roads have been standardized and privately operated vehicles more widely embraced because no alternative could compete with the personal (and often single-occupant) vehicle except in specialized circumstances, such as dense downtowns. However, the widespread availability of low-cost communication and information tech- 3 Although transit has progressively lost market share since World War II, investments in public transportation in recent decades have resulted in dramatic increases in its use in some areas. That being said, in the United States, transit still accounts for only 2 percent of all person-miles traveled in vehicles. To evaluate the effectiveness of public transportation, however, one must consider where it is provided. Only about half of the communities in the United States have public transportation systems, and even in those communities, proper evaluation of public transportation requires route-by-route comparisons of places where people have a choice between their private vehicle and public transportation.

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Surface Transportation Environmental Research: A Long-Term Strategy - Special Report 268 nologies, including the Internet, may allow vehicles to be used in a far more specialized and efficient manner. This could come about directly from a better match between personal travel needs and the system of private vehicles (e.g., access to a variety of vehicle types through car sharing), or indirectly from user adaptations (discussed in the next section). However, there is no consensus on the probable size and direction of these benefits of communication and information technologies, and the distributional impacts are largely unknown. Analogous observations about vehicle information systems can be made for the freight sector, which has led in the application of these technologies to improve logistics and exploit new forms of supply-chain management. Again, however, resulting shifts in the distribution of benefits and undesirable environmental consequences are poorly understood, notably in the area of urban trucking. Role of Publicly Funded Research New and improved technologies play a central role in the evolution of the transportation sector. Huge investments have been made in R&D, especially by the private sector, to enhance transportation technologies and improve their environmental performance. For example, the global automotive industry spends about $50 billion on R&D per year (5 percent of revenue) (GAO 2000); about a third of that total is spent by U.S.-based companies, with a large proportion of those expenditures going to energy and emissions research. Government-funded research is a small fraction of that amount. New industrial R&D is increasingly being directed at hybrid and fuel-cell electric vehicles and at applications of information, communication, and control technologies. In all of these cases, rapid innovation is taking place. Rapid innovation, however, does not necessarily translate into environmental improvements, primarily because the innovations are generally introduced as technology fixes; that is, they are designed to enhance existing technologies without disrupting current patterns, investments, or lifestyles. Arguably, much greater improvements in environmental quality, resource utilization, productivity, and quality of life would be possible if these technology solutions were incorporated into system innovations that led to a transformation of transportation, energy, and information systems, including the market mechanisms that enable these systems to function. In any case, government can and does play an important role through a variety of means in directing industrial R&D toward those innovations that

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Surface Transportation Environmental Research: A Long-Term Strategy - Special Report 268 Improvements in energy efficiency have not been exploited in the United States to achieve greater fuel economy. The technical energy efficiency of vehicles has increased about 30 percent in 15 years, but fuel consumption rates have increased because vehicles being sold are, on average, larger and more powerful. New technologies such as fuel cells, information technologies, wireless communication, and advanced vehicle control technologies tend to be used first as substitutes and as a means of enhancing existing patterns and only much later as a way to transform overall patterns. This evolution can be accelerated. In many ways, the United States is out of step with the rest of world in terms of the size and use of vehicles. Better understanding of how this situation evolved could be a first step in developing effective policies for managing the energy and environmental policy consequences of new technologies. A majority of households have access to more than one vehicle and are tending to move toward ownership of specialized vehicles (and perhaps new ownership patterns and mobility services). The potential social benefits of information and telecommunication technologies and telesubstitution are great, but their realization will require innovative, system-level thinking and designs. RECOMMENDATIONS The recommendations that follow address five topics: (a) fuel and propulsion technologies and their impacts; (b) intelligent transportation technologies and their impacts; (c) user behavior and consumer choice and demand; (d) policy instruments related to evolving technologies; and (e) institutional arrangements for R&D. For each topic, examples of the kinds of research envisioned by the Advisory Board are given. Recommendation 4-1. Analyze transition pathways to environmentally beneficial fuels and vehicle propulsion technologies. The United States is seriously considering a transition away from petroleum fuels and internal combustion engines. With intensifying calls for more environmentally

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Surface Transportation Environmental Research: A Long-Term Strategy - Special Report 268 benign vehicles and fuels and rapid innovation in propulsion technologies, major changes are about to take place. Better understanding is needed of the choices and pathways of those changes. An improved knowledge of the new technologies and their impacts would inform the policy and R&D processes with respect to pollution, energy use, energy supply, and climate change. Government and the public need to be well informed to ensure that environmental factors are adequately considered in the development, evolution, and use of vehicles and fuels. The petroleum and automotive industries are among the largest in the world, are global in their operations, and spend billions of dollars every year on product development and market research. The challenge is to complement, leverage, and influence industrial R&D, not duplicate it. Example: Toward a hydrogen economy. It is widely believed that hydrogen will be the dominant energy carrier at some point in the future. But how will hydrogen be produced and distributed? How will it be used in vehicles? What is the desirability of introducing an interim fuel such as methanol? How should emissions and energy rules be modified and when? Are new standards and codes needed for storage tanks, pipelines, and fuel handling? Should investments for converting remote natural gas into liquids be encouraged (through basic R&D at national laboratories and universities, R&D tax incentives, and fuel quality and vehicle emission standards)? Any actions that are or are not taken can influence billions of dollars in industrial investments and can have far-reaching implications for the environmental impacts of the transportation system. Example: Handling and distribution of alternative fuels. The recent reversal of California regulations concerning methyl tertiary butyl ether (MTBE), a chemical made from natural gas and added to gasoline to reduce air pollutant emissions, highlights the need for better scientific and policy research. MTBE is being banned in California because leakage from storage tanks has polluted groundwater, even though oil refiners had been required by regulators just a few years earlier to invest billions of dollars in MTBE’s production and distribution. Every fuel has a different set of safety and environmental impacts, and more research is necessary to understand and measure the full spectrum of those impacts. Research is needed on the costs and safety implications of infrastructure for new fuels (e.g., where hydrogen fuel stations might be located and at what cost), on issues of industry competitiveness associated with introducing new fuels, and on strategies for sequestration of carbon from new fuels (e.g., from natural gas converted into hydrogen).

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Surface Transportation Environmental Research: A Long-Term Strategy - Special Report 268 Example: New propulsion technology and fuels in heavy-duty vehicles. Even though medium- and heavy-duty trucks are a principal source of air pollutants (responsible for about one-third of nitrogen oxide emissions from vehicles) and greenhouse gases, they have received little scrutiny from regulators and policymakers until recently. Emission regulations and emission control technology on large diesel engines lag perhaps a decade behind those for light-duty gasoline engines. Data and knowledge about freight transport and its energy and environmental impacts are sparse. Research is needed on truck usage patterns (including idling), emissions and energy-use characteristics, policy instruments that can reduce energy use and emissions, development of infrastructure for new truck fuels, and vehicle and fuel tax policy. Example: System-transforming transport-energy opportunities. Research is needed on new transport and energy system designs that have the potential to yield dramatic improvements in energy consumption and other environmental attributes. These might include designs incorporating not only non-fossil-based hydrogen, but also CO2 sequestration, entirely new forms of hydrogen and electricity storage, and new energy-serving vehicle guideways. In the latter case, for instance, electricity could be supplied easily and cheaply to battery-powered vehicles along a guideway. The vehicles would have small (inexpensive) battery packs for short access and egress trips off the electrically powered guideway at either end of the line-haul portion of the trip. Other related system designs are possible, with the potential for large reductions in energy use and emissions. Recommendation 4-2. Design and analyze the application of intelligent transportation technologies to achieve environmental benefits. R&D on ITS technologies is dividing into two groups. One is dominated by the transportation departments of the state and federal governments and is focused on better management of the road infrastructure. The other group involves automotive, telematics, and other information technology companies that are working to develop profitable products and services for vehicle buyers and travelers. In each case, beneficial research and product development are taking place. However, the resulting changes are of an incremental nature and may or may not have environmental benefit. For instance, providing better traffic information to drivers may smooth traffic flows but also encourage more driving.

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Surface Transportation Environmental Research: A Long-Term Strategy - Special Report 268 Little effort is being devoted to investigating technology-based strategies, designs, and services—for example, use of ITS technology to facilitate the use of public transportation—with the potential to generate a transformation of transportation patterns that could greatly reduce environmental impacts. These new options and services might include smart car sharing, smart paratransit, dynamic ridesharing, and teleservices, as well as a variety of other innovative new mobility services. Currently, none of these options can compete effectively with the private motor vehicle. However, combined with each other and with other innovations, such as neighborhood cars, they could lead to a basic change in transportation patterns with attendant environmental, economic, and social benefits. The challenge of research is to determine how wireless technologies can be used to connect the various modes and services seamlessly in a way that will be attractive to consumers and service providers and yield major societal benefits. It is also important to understand that particular services and products are likely to evolve over time and may develop differently in different communities and institutional settings. Example: Demonstrations and pilot tests of innovative transportation services. Standardized software and hardware technologies now being developed are key to the successful emergence of the above new services and products; in many cases, they are a necessary precondition. But the key challenge, again, relates to market and institutional issues, many of which are situational and specific to local settings. There is a need to experiment with means of developing effective market strategies, creating local partnerships, and educating local communities about the possibilities for innovative transportation. Demonstrations need to be launched with the idea that they are pilot tests expected to evolve into full-fledged businesses and services. Example: Economic, financial, environmental, and social equity analyses of innovative transportation businesses, services, and products. New transportation services and businesses will usually build on partnerships and have multiple revenue streams. They may evolve within entirely new mobility companies that own and maintain passenger vehicles. These companies may spring from car rental firms, car-sharing organizations, local affinity groups, automotive companies, large business parks, or any number of other organizations. They may have links to transit operators, fleet managers, and large employers. Unfortunately, limited experience is available on which to build. A research initiative is needed to explore various economic and business models; to determine whether these models might better meet the needs of particular user groups, such as the elderly and mobility-disadvantaged; and to examine envi-

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Surface Transportation Environmental Research: A Long-Term Strategy - Special Report 268 ronmental impacts. The overall effects on the amount of travel and the types of vehicles used could be great. The research would address vested interests of taxi and transit operators and the organizational behavior of prospective service providers, whether traditional businesses or wholly new types of mobility enterprises. Existing travel demand, energy, and emission models need to be extended to handle these new applications, modes of travel, and services, including delivery of packaged goods. Recommendation 4-3. Analyze user response to and future demand for environmentally beneficial vehicles, fuels, and mobility services. Public policy addresses the continuing tension between the desires of the individual and the interests of society. If travel were free and involved no delay, individuals would travel more frequently. Travel, however, is not free, and many of the associated costs are not borne by the traveler. Relative to other countries, the United States has been less restrictive regarding the travel desires of its citizens. Fuel prices are relatively low, vehicles are lightly taxed, and road capacity and quality have been expanded rapidly. To provide a better knowledge base for public policy, research is needed on the demand for and use of environmentally beneficial vehicles, fuels, and mobility services. Under what conditions and with what incentives would individuals and organizations embrace environmentally friendly products and services? What might be the anticipated and unanticipated consumer responses to different packages of innovations? What would be the aggregate consequences for the environmental balance sheet of the ready availability of such products and services on a large scale? Do we even have suitable analytical tools to address these questions? Example: Demand for and use of new environmentally beneficial vehicles and fuels. With the proliferation of vehicles (overall, more than one per licensed driver) and the introduction of new fuels and propulsion technologies, the opportunity arises to match specialized vehicles with appropriate applications. However, U.S. vehicle users are familiar with only a narrow range of vehicle attributes. The nation’s population of private automobiles and light trucks tends to be more homogeneous than those of other countries, with fewer small vehicles and almost all vehicles operating on gasoline and diesel fuel. Nonetheless, multivehicle households (about two-thirds of all U.S. households) increasingly own a mix of vehicle types, suggesting increasing specialization of use. In this

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Surface Transportation Environmental Research: A Long-Term Strategy - Special Report 268 context, little is known about the demand for home recharging and refueling, the driving “feel” of electric motor propulsion, the perceived safety aspects of new fuels, the use of smaller vehicles in various settings, or the attraction of new auxiliary services made possible by on-board high-power electrical systems. A number of other questions also arise. Are companies following the market? Under what conditions might consumers shift buying patterns toward “green” vehicles? Does the development of new technologies, even without mass commercialization, lead to a restructuring of demand patterns? How might more environmentally benign vehicle technologies be introduced to the marketplace? How might the market be segmented differently? What is the role for social marketing? What additional research is needed to understand the demand for new attributes unfamiliar to consumers, especially those associated with fewer environmental impacts? Example: Demand for and use of new packages of communication, ITS, and vehicle technologies. Many of the above research priorities for vehicles and fuels also apply to new modes of transport and mobility services now being created, including smart car sharing, smart paratransit, and dynamic ridesharing; they apply as well to information services that can permit the spatial and temporal reorganization of activities, notably work and shopping. Under what conditions will individuals and organizations pay for and use new mobility and information service packages? To what extent will purely electronic services complement or replace physical movement? People are already using telecommunications spontaneously to become more mobile and more flexible. In the work domain, this trend appears to have influenced travel behavior more than organized telecommuting, but will the penetration of flexible work become more substantial if it is coupled with smart car sharing and other innovations? In any case, patterns of travel and access could be transformed in ways that would lead to radically different life and work styles. A particular case of interest is the role of integrated transportation and information services in meeting the mobility needs of the growing elderly segment of the population; for this segment, these services may also be packaged with housing. What will be the effect of these technologies on total travel, and what will be the energy and environmental impacts? Again, would environmental benefits be greater if governments actively promoted these transformations? Example: New methods for estimating demand and simulating adoption paths. In addition to research on the demand for environmentally beneficial vehicles, fuels, and mobility services, research is needed on methods for estimating the penetration of these technologies and alternative paths for their adoption.

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Surface Transportation Environmental Research: A Long-Term Strategy - Special Report 268 Conventional models and other methods of projecting private-vehicle and travel demand are likely to be increasingly less helpful in answering these complex questions about emerging technologies, individually or in combination. The challenge is to estimate a sufficiently broad set of interacting outcomes in a future that may, in some respects, be unfamiliar. Most survey methods that address stated preferences for particular attributes of new products and services do not provide stable results except for questions that are highly limited in scope and frame. Research is needed on how to improve the design of simulations of consumer responses, such as those used for conducting some premarket surveys of new vehicle types or for exploring responses to unusual circumstances, such as fuel shortages. The focus of these methods should be on understanding decision processes as much as on forecasting outcomes. Understanding demand for technologically advanced packages of mobility, access, and information services will also require new urban modeling tools that can take into account interactions with land use (as discussed in Chapter 6). Recommendation 4-4. Develop policy instruments to encourage environmentally beneficial vehicles, fuels, and mobility services. To a large extent, public policy is predicated on previous and current circumstances—environmental, political, economic, and technological. The advent of new system-transforming technologies means that many of the central premises of existing policies and policy instruments may no longer be relevant or appropriate. For example, emission and fuel economy standards are based on the use of internal combustion engines and petroleum fuels. Road standards and traffic rules are premised on all vehicles using all roads. Road financing is based on vehicles consuming petroleum fuels roughly in proportion to their use. Rules limiting jitney services are grounded in the ubiquity and effectiveness of conventional bus and rail services. All of these fundamental understandings and conditions are likely to become anachronistic with the introduction of new fuels and propulsion technologies and the widespread availability of inexpensive wireless communications. And new understandings of environmental threats— largely with respect to climate change and particulate matter—necessitate even further overhaul of policy instruments. New policy research is also needed on how to maximize environmental and social justice benefits, with explicit attention to opportunities and problems created by new technologies (see also Chapter 4).

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Surface Transportation Environmental Research: A Long-Term Strategy - Special Report 268 Example: Reform of policy instruments for reducing energy and environmental impacts of technologies. Today’s policy instruments are rapidly becoming anachronistic and inefficient and have a distorting effect on innovation, new technology, and fuel investments. What type of policy structure might be used to reduce greenhouse gas emissions from transportation? Might it replace or be added to the existing air quality regulatory structure? How might emissions trading be employed to reduce greenhouse gases? What is the role of voluntary instruments? How might policy instruments be crafted to integrate behavioral and technological strategies? What are the potential advantages and problems associated with introducing passive vehicle monitoring, such as onboard diagnostics linked to a pollution pricing system? How can instruments be devised that would allow for trade-offs between different goals (such as diesel’s lower greenhouse gas emissions but higher particulate emissions)? How should fuel taxes evolve given that they are now calculated on a volumetric basis and provide most of the funding for U.S. roads? As vehicles become more energy-efficient and use different fuels with differing units of measurement, energy characteristics, and greenhouse gas emissions (from the vehicle and upstream), the current fuel tax system becomes not just inadequate, but grossly distorted. And beyond this empirical research is a need for fundamental social science research on associated political processes and public attitudes. Example: An equitable regulatory environment for emerging transportation systems. Minimal research has been devoted to analyzing the policy implications of new transportation system configurations. The more specialized nature of future fuels and vehicles, coupled with the potential to reduce the transaction costs for intermodal travel (with low-cost information and communication technologies), creates the opportunity to link vehicles to applications in a more efficient and socially and environmentally desirable manner. Instead of buying and using conventional-sized personal vehicles for all trips, travelers could choose readily available alternatives, for example, shared-lease arrangements (e.g., for an everyday vehicle for exclusive use, plus an allotment of time on a vehicle with a larger carrying capacity or some other attribute, such as four-wheel drive); shared-use vehicles; smart paratransit services that would promptly pick one up at home or elsewhere; and small neighborhood vehicles powered by batteries. All of these concepts require policy research on regulatory structures that would maximize the associated environmental and social justice benefits, with due regard for the opportunities and problems created by enabling technologies, such as electronic toll collection, integrated smart cards for parking, and vehicle positioning technology. Research is also needed with respect to standards and codes,

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Surface Transportation Environmental Research: A Long-Term Strategy - Special Report 268 insurance requirements, and taxi and jitney regulation, as well as the best ways to address safety concerns, such as the operating limits of neighborhood vehicles. Example: Conception of environmental life-cycle policy approaches. Over time, efforts to reduce environmental degradation have shifted toward prevention through better product design and more efficient use of resources. In the future, the emphasis is likely to proceed one step further toward the use of materials and resources that are fully regenerative, rather than depletive, and that are fully biodegradable or reusable (McDonough and Braungart 1998; Hawken et al. 2000). Research is needed to determine what role government can play in encouraging new and existing companies to design and produce transport technologies that are more environmentally sustainable. A knowledge base needs to be developed to better understand the opportunities, costs, and benefits involved. Possibilities range from the use of more recyclable and less toxic materials to technologies that leave a smaller environmental footprint. A strategy needs to be developed for determining the types of products and companies that merit support, the nature of that support, and the economic and environmental benefits of those investments. Recommendation 4-5. Design an independent institutional arrangement for transportation technology R&D. Technology development is principally an industrial activity. However, transport technologies have large environmental externalities and major societal impacts, and many transport facilities and services are owned, managed, or regulated by government. The public sector plays an important role in encouraging the development of technologies that are more environmentally and societally beneficial. The R&D resources of industry, especially in the automotive, energy, and information technology sectors, dwarf those of government. The challenge is to devise a cohesive public-sector R&D strategy that can leverage and stimulate industrial investments in environmentally beneficial technologies, and provide a knowledge base for designing and implementing efficient and effective public policy regarding transportation technologies. A stable and independent institutional arrangement is needed to oversee public R&D investments associated with transport-related technologies and to ensure the continuity of the knowledge base. Example: R&D on vehicles and fuels. Considerable government funds are invested in cutting-edge research aimed at developing cleaner-burning and

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Surface Transportation Environmental Research: A Long-Term Strategy - Special Report 268 more efficient vehicles and fuels (as well as increasing the global competitiveness of domestic companies). In recent years in the United States, much of this R&D has been conducted under the rubric of PNGV. Substantial R&D funds are also spent in this area by the military and under various other programs. Historically, little of this research has been directed through the Department of Transportation (DOT), even though DOT administers fuel economy standards. Better R&D strategies and more effective R&D programs are needed in the area of vehicles and fuels. The question of what strategies and R&D activities would be most effective needs to be considered, as well as what relative priority should be given to safety, greenhouse gas emissions, particulate matter and other pollutants, acid precipitation, basic science research, and the role of Original Equipment Manufacturers (OEM). Example: Improving the effectiveness of public R&D and public–private R&D partnerships. Challenges and problems increasingly cut across many institutional jurisdictions, political and national borders, and disciplines. More and more transportation and energy companies are mounting joint R&D ventures, within and across industries. What is the most appropriate and effective role for public R&D? Public–private research partnerships for transport technologies launched in the 1990s include PNGV, the U.S. Advanced Battery Consortium, the Intelligent Vehicle Initiative, and the Future Truck Initiative. While PNGV is often cited as a model (Chapman 1998), and a series of National Research Council reports have evaluated its progress, no evaluation has been performed of the overall benefits of the program or of its effectiveness and efficiency in meeting the goal of developing affordable advanced technology (Sperling 2001; NRC 2001b). From the public-sector perspective, a better understanding is needed of the opportunities and challenges presented by partnerships between federal agencies, and even more so by those among federal agencies, universities, state and local governments, small companies, other countries, energy companies, and automaker OEMs. Intra- and interindustry partnerships (for instance, between automakers and major suppliers to develop new technologies, and between automakers and oil companies to develop new fuels), are becoming more common and also need to be understood. Such research should thus be aimed at evaluating the processes of partnership. It should shed light on the types of companies and partnerships that are most likely to bring environmentally beneficial products to market and help identify the best methods for leveraging public R&D funds.

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Surface Transportation Environmental Research: A Long-Term Strategy - Special Report 268 REFERENCES Abbreviations AAAS American Association for the Advancement of Science IPCC Intergovernmental Panel on Climate Change NRC National Research Council GAO General Accounting Office AAAS. 2000. AAAS Report XXV: Research and Development FY 2001. Washington, D.C. Chapman, R. 1998. The Machine That Could: PNGV, A Government-Industry Partnership. Rand, Santa Monica, Calif. DeCicco, J., and M. Delucchi (eds.). 1997. Transportation, Energy, and Environment: How Far Can Technology Take Us? American Council for an Energy-Efficient Economy, Washington, D.C. GAO. 2000. Results of the U.S. Industry Partnership to Develop a New Generation of Vehicles. GAO/RCED-00-81. Hawken, P., A. B. Lovins, and H. L. Lovins. 2000. Natural Capitalism: Creating the Next Industrial Revolution. Little Brown and Co., Boston, Mass. IPCC. 2001. Climate Change 2001: The Scientific Basis. Cambridge University Press, Cambridge, United Kingdom. McDonough, W., and M. Braungart. 1998. The Next Industrial Revolution. Atlantic Monthly, Oct. NRC. 2001a. Effectiveness and Impact of Corporate Average Fuel Economy (CAFE) Standards—Prepublication Copy. National Academy Press, Washington, D.C. NRC. 2001b. Review of the Research Program of the Partnership for a New Generation of Vehicles. National Academy Press, Washington, D.C. Oak Ridge National Laboratory. 2000. Transportation Energy Data Book, Edition 20. Oak Ridge, Tenn. Pickrell, D. 1999. Cars and Clean Air: A Reappraisal. Transportation Research A, Vol. 33, pp. 527–547. Plotkin, S. 2001. European and Japanese Initiatives to Boost Automotive Fuel Economy: What They Are, Their Prospects for Success, Their Usefulness as a Guide for U.S. Actions. Energy Policy, Vol. 29, No. 13, Nov., pp. 1,073–1,084. Sperling, D. 2001. Public-Private Technology R&D Partnerships: Lessons from U.S. Partnership for a New Generation of Vehicles. Transport Policy, Vol. 8, No. 4, pp. 247–256.