Transportation Energy Market Transitions: an Environmental Perspective

1
Transportation Energy Market Transitionsan
Environmental Perspective

• John M. DeCiccoSenior Fellow ? Automotive
  StrategiesEnvironmental Defense Fund
• MIT / Ford / Shell Research Workshop Dearborn,
  Michigan ? June 9, 2009

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Clarity on Goals

• Distinguish MEANS from ENDS
• AFVs (non-fossil, non-carbon) are means to
• energy security
• climate protection
• economic benefits
• Is AFV transition really "vital" -- should it be
  the premise of analysis?

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Environmental Goals

• Climate protection is now top priority
• Work from global carbon budget to avoid high risk
  of disruptive global warming
• "Deep reductions" by mid-century (e.g., 80)
• Continue progress on established metrics
  (air/water quality, ecosystem protection)
• Carbon budget implies cap framework trading
  allows flexibility
• problem poor policy design match for
  transportation markets
• or, a need to develop new mechanisms

4
Fuel Price Volatility vs. Carbon Price
With carbon price of 22/ton CO2
Average price 1970-20082.03 0.51 (2007/gal)
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Energy Policy Lessons

• Based on balance of competing interests
• No well-defined objective function (how do you
  measure "security" or "independence"?)
• Has generally provided economic efficiency,
  "normally" low private costs, but
• RDD, incentives mandates policies for
  alternative transportation energy sources have
  not seen success to date (Brazil?)

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Trends in Design-Related Impacts of U.S.
Automobiles
Relative nationwide total (not per-mile) values
VMT
Oil CO2
Fatalities
Air Pollution
Source Derived from DOT, DOE, and EPA
statistics. Each index is based on national
totals, i.e., total tons of carbon or pollution
and total fatalities. The air pollution index
represents a health damage-weighted composite of
light duty vehicle criteria-related emissions.
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The "control system" matters
OPEN LOOP
INPUT
OUTPUT
PROCESS
INPUT
OUTPUT
CLOSED LOOP
PROCESS
FEEDBACK
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Control models for existing policies

• Road safety open loop performance goals are
  only weakly stated and not enforceable.
• Air quality closed loop Clean Air Act requires
  legally enforceable attainment of health-based
  standards.
• Energy open loop at best well-defined
  performance objectives are not specified in law.

Traditional energy policy approaches seem
unlikely to suffice for the goal of climate
protection, and it's fair to question just how
well they will ever work for energy security and
economic goals.
Here, enforceable pertains to the social goal,
not the technical regulations.
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Clarity on Framework

• Is the current framing of the problem, based on
  technical factors characterizing the system,
  adequate for generating the insights needed?
• "Alternative" (e.g., non-petroleum, or
  non-fossil, "carbon free" energy carrier, etc.)
  is example of "technological determinism"
• Means to end, but if pathways and scenarios are
  all defined in terms of "alternatives," are we
  missing opportunities?

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Traditional Factors for AnalyzingTransportation
GHG Emissions
GHG Emissions
Travel Activity
Fuel GHG Intensity
Vehicle Efficiency
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Shifting the Focus

• from Factors
• which no single actor can fully influence
• to Actors
• all of whom make decisions that influence GHG
  emissions in some way

Can we create "feedback loops" that guide all
actors according to well-defined metrics tied to
end goals (as opposed to trying to guide changes
in factors toward presumed means to the end)?
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Actors Who Influence Automotive GHG Emissions
Established Market Relationships
Fuel Suppliers
Automakers


Consumers

Land Use and Infrastructure Planners and Providers
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What are the future relationships that might
transform auto-related markets?
VEHICLE-FUEL SYSTEMS
Fuel Suppliers
Automakers


Consumers
ENERGIZED INFRASTRUCTURES
INTELLIGENT INFRASTRUCTURES

Land Use and Infrastructure Planners and Providers
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Toward "Synergy" Scenarios

• New markets will require new relationships that
  add value along multiple dimensions
• What carbon (GHG) metrics make sense, and can the
  carbon market be helpful?
• Energy security role for "50-250" strategies?
  (robust over 50250 per bbl price variation)
• Where will new bases for customer value be found
  (hint not likely in energy per se)
• Can the modeling explore these questions?