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Friday September 13 General

Tackling the Decarbonization of Transportation

By Mark Mondik, VP, Carbon Markets, 3Degrees

By now, many of us have heard the statistics and news reports: organizations need to be moving at a much faster pace to address the global climate crisis and meet the 2015 Paris Agreement’s goal of limiting warming to no more than 1.5 degrees Celsius.

While this information might feel overwhelming, we don’t interpret it that way for two reasons. First, there has already been good progress made reducing Scope 2 emissions with increased investment in renewable energy. From utilities diversifying their energy mix with solar and wind power, to companies stepping up to invest in increasingly cost-competitive renewable electricity through initiatives such as RE100 by The Climate Group, emissions from electric power usage have been on the steady decline. Next, we know exactly where we need to turn our collective efforts to have the biggest impact on reducing GHG emissions: the transportation sector. Put simply, we have the map and know the road to take -- now it’s a matter of mobilizing and taking action.

THE ROAD TO REDUCING TRANSPORTATION EMISSIONS

In 2016, the transportation sector surpassed the power sector as the larger emitter of greenhouse gases (GHG) in the U.S. (responsible for 27% of emissions), driven by changes in both consumer and business market behavior. A confluence of activities is resulting in a larger transportation carbon footprint: the growth of e-commerce, including international shipping, increased business travel as a result of globalization, and more.

While solutions to transportation emissions are within sight, they come with challenges, including the need for financial investment, new infrastructure, and policy support, in order to become fully practical to implement on a large scale. The good news is that progress has already been made in a few notable areas, including fuel efficiency (vehicle manufacturers have made significant improvements in fuel economy) and advanced aerodynamics. However, the solution that will have the biggest impact on emissions is undoubtedly the transition to zero-emission electric vehicles.

INCENTIVES CAN ACCELERATE THE TRANSITION TO LOW AND ZERO-CARBON FLEETS

The business case for electric vehicles is increasingly compelling thanks to rapid cost reductions and minimal operational costs, but stronger policy support is needed to realize the full potential of EVs on the timescales required by the Paris Agreement. There are some levers available to help support the acceleration of this transition, such as incentive programs like California’s Low Carbon Fuel Standard (LCFS) and the federal Renewable Fuel Standard (RFS). Market-based incentive programs were designed with the goal of decarbonizing the transportation fuel mix and can actually help fund fleet decarbonization and infrastructure roll-out, assisting businesses on the road to being zero-carbon.

California, Oregon, and British Columbia have incentive programs for low-carbon transportation, and several other states and provinces are considering them. California’s program requires providers of petroleum-based fuels to reduce the carbon intensity of their fuel mix by 20% by 2030, as compared to a 2010 baseline. The LCFS incentivizes low-carbon fueling in California by allowing alternative fuels, such as electricity, to generate credits which can then be sold in the LCFS market. Organizations already engaged in low-carbon fueling may be eligible to register those activities under what is referred to as LCFS “pathways”. For organizations that have yet to transition to low-carbon fuels, the LCFS can act as a financing mechanism to help fund the transition costs.

THE ROLE OF CARBON OFFSETS

In addition to incentive programs, carbon offsets are another market mechanism that plays a role on the road towards decarbonizing transportation. While they are not the end goal, carbon offsets can provide an important funding mechanism for programs that support the rollout of electric vehicles (EVs).

We have a map of viable pathways for decarbonizing transportation. And there are many examples of organizations already taking action and mobilizing others to follow -- but we’re going to need many more to start down this road if we’re going to make a true impact on lowering our transportation emissions. We hope that the growing availability of market-based incentives mentioned above encourages your organization to step up and take the wheel.

We are excited to be working with The Climate Group’s Climate Week NYC for the second year in a row, helping the team and attendees offset their carbon emissions from the event to ensure the week is as low carbon as possible. We are also looking forward to meeting members of The Climate Group’s EV100 initiative at their ‘Inspiring EV Solutions’ event, which will share best practices from companies leading the way to zero-emission fleets.

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