The Climate Bill is Essential, But Won't Break U.S. Oil Dependence

Rocky Mountain Institute

The Climate Bill is Essential, But Won't Break U.S. Oil Dependence

The primary purpose of the Waxman-Markey bill making its way through Congress is to create a framework for reducing U.S. carbon dioxide emissions. The cornerstone of the bill would be to put a cap and a price on emitting carbon. If passed, the bill would be a giant step toward low-carbon electric power, but it would not, as many of its proponents claim, solve the grave problem of U.S. oil dependence.

Like a doctor who must treat a patient for two distinct ailments, the U.S. government should address climate change and oil dependence with distinct policies.

Consider that the proposed price on carbon ($15 to $20 per ton) would only increase the price of gasoline by about 15 cents per gallon. American consumers, accustomed to wild price swings at the pump, would hardly notice this blip -- it is not enough to incentivize the type of innovation and market shifts necessary to break our dependence on oil.

So how should the U.S. go about breaking its nasty oil habit? The Oil Solutions Initiative (OSI), organized by Rocky Mountain Institute and the Brookings Institution, has brought together representatives from the oil, energy, security, environmental and business communities to answer this very question.

Members of OSI met in December to begin work on a consensus-driven framework to break U.S. oil dependence. Following the December summit, months of debate and collaboration resulted in a 16-page policy memo, which can be downloaded here.

The four objectives of the OSI framework, simply put, are:
1.    Reduce the number of vehicle-miles Americans must travel. This could be achieved through increased funding for public transit and incentivizing carpooling and telecommuting in the short term, and implementing zoning and code changes to encourage long-term transit-oriented development, thus minimizing the need to drive.

2.    Increase the fuel-efficiency of personal cars in the U.S. The increased CAFE standards passed earlier this year are a step in the right direction, but the light vehicle fleet takes about 20 years to turnover. A cash-for-clunkers or feebate program would help get old inefficient cars of the road faster, and increase demand for efficient vehicles.

3.    Increase the fuel-efficiency of moving freight and goods in the U.S. There are plenty of ways to make long-haul trucking more efficient, from improving truck aerodynamics to optimizing logistics to reduce the number of empty trailers on the road. Increasing the utilization of rail, and encouraging intermodal freight networks that include both rail and long-haul trucking could greatly improve the efficiency of moving freight in the long term.

4.    Encourage the development of alternative sources of energy for transportation. Currently, U.S. transportation is 97 percent dependent on oil. No matter how efficiently we use oil, our energy supply will still be insecure unless there are alternative sources of energy for transportation. OSI participants have come up with several policies that could help achieve the long-term objective of having no particular fuel account for more than 40 percent of transportation energy. This long-term vision would finally give Americans substitutes to gasoline and diesel to fuel their mobility.

This year's upcoming transportation bill is a great opportunity to implement some of these policies aimed specifically at breaking oil U.S. oil dependence in the transportation sector. Setting a ceiling and price on carbon may prove very successful at speeding our transition away from coal-fired electric power, but it will not break our dependence on oil.

RMI Special Fellow Bennett Cohen works with the Office of the Chief Scientist. Bennett is a former director of Environmental Markets for CPower, an energy management firm. At RMI, he works closely with Cofounder, Chairman and Chief Scientist Amory Lovins on research and writing. Bennett also is the project manager for the Oil Solutions Initiative.

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