The report finds that the technologies required for the United States to achieve universal clean and affordable transportation are not just futuristic ideas – they are proven and available today. In order to significantly reduce oil consumption in the U.S., policymakers must work both to create a framework for the adoption of alternative fuel vehicles and to promote greater energy efficiency in existing vehicles.
A successful strategy for reducing U.S. oil dependence has three prongs. First, the U.S. must remove any and all market barriers preventing the widespread use of domestically-produced and /or alternative power sources, including biofuels, natural gas and electricity. Second, vehicles must widely adopt available and cost-effective efficiency opportunities. Finally, the nation must tap into its robust and advanced knowledge economy to promote the U.S.’s competitive advantage.”
But the path to achieving these three goals is not without its challenges. The adoption of these technologies is hindered by market barriers, including high barriers to entry and imperfect competition. The persistence of such barriers has led to under-investment in the low-carbon energy sector, in particular in the areas of engine efficiency and petroleum-alternatives. More specifically, the transportation market has not yet adequately priced many of the benefits of efficiency improvements and alternative fuels.
The Carbon War Room report recommends a variety of market-based policy tools that governments could use to lay the aforementioned framework for private sector growth in alternative fuels:
• Opening fuel standards in order to level the playing field for alternative fuels by requiring more vehicles to be capable of running on alternative fuels.
• Coordinating standards on the provision of public goods, namely infrastructure, in order to enable more alternative fuel vehicles to enter the market.
• Supporting the deployment of a nation-wide charging infrastructure for electric vehicles and/or a vehicle-level distribution infrastructure for natural gas and advanced biofuels.