# Presentation: 132563

## Incentivizing Diesel Emission ReductionsGetting the discussion going

- Incentivizing Diesel Emission Reductions*Getting the discussion going*

- Tim Johnson
- December 3, 2003

## Incentives need to be economic and tangible so valid accounting decisions can be made

- Green marketing only goes so far
- small percentage of early innovators
- others may follow
- followers’ decisions are based on accounting principles
- Incentives should reflect in some way the economic cost of emissions
- True environmental cost of pollution
- ought to be conservative so disagreements don’t hamper movement
- Emissions are more equitably reflected in cost of doing business
- If possible, a balance should be struck between the price difference of polluting and not, versus the costs of cleaning up
- ROI for investing in pollution control equipment and fairness

- If these principles are debated in a meaningful manner, the groundwork for economic incentives can be established

## Other countries and regions have been successful in establishing diesel retrofits using a variety of mechanisms

- _All are based on valid cost/benefit analyses_
- Mandates
- Switzerland, Tokyo, California, Hong Kong
- Access to economic zones
- Sweden
- Cost of doing business
- contractual requirement for public work
- NJ, MA, CA, NYC......

- One can not operate unless you clean up
- Sometimes the political environment is not conducive to these mechanisms

## Innovative, revenue-neutral (?) incentives are being implemented

- German road tax (circa 2002)
- 			Tax, Euro cents/km
- 			                <4 axles	4+ axles
- Euro 0 & 1		15		17
- Euro 2 & 3		13		15
- Euro 4 & 5		10		12
- Transponders monitor mileage; periodic billing to operators
- Large E4/5 truck driving 100K km/yr in Germany:  €3000/yr savings
- pays for emission control system in 1-2 yr.
- Moves in direction of environmental cost of doing business
- Other European states are considering similar measures
- Recent EU study puts commercial truck costs at €10/TEU-km
- (TEU = 20 foot equivalent freight unit length)

## Other potential revenue-neutral approaches

- Annual registration fees
- Tolls
- Fuel tax with rebates

## Other economic incentives might be less “intrusive” and more “incentive minded”

- Time is **Money**
- Access to HOV lanes
- Preferential treatment in queues
- harbors
- large loading/unloading facilities
- fueling depots
- Healthy/happy employees are **Money**
- Freeways are pollution corridors
- what is economic cost?
- Heavy equipment operator personal exposure/risk
- health benefits/costs
- productivity gains
- Educate unions, schools
- contract negotiations

## Maybe it’s time to look at cap and trade programs

- Issues
- Accountability - What are the real emissions reductions?  Are we getting a deal?
- Mobility - What happens if vehicle moves out of region?  What happens if it is sold?
- Environmental justice - Pollution is unfairly allocated.  It is not reduced where it is needed or desired.
- Technology is progressing
- Transponders
- Mobile analytical equipment

- Maybe it is time to ratchet up the _experiment_
- provide a market for innovators while minimizing risk
-  to start:  look at opportunities instead of problems

## Points of discussion

- Environmental cost/benefit analyses
- polluters pay true cost of doing business
- balancing costs with return on investment in upgrades
- Success of traditional measures
- access to economic zones
- access to government contracts
- regional mandates
- applicability to the US
- Tax initiatives - registration fees, tolls, fuel tax/rebates
- Time-based incentives
- queues, HOV lanes
- Healthier employees/students
- education and union contract negotiations
- Cap-and-trade programs

**Technology and knowledge is there or emerging.  **_**Now is the time to move forward.**_