Our transit agency passed a climate goal. Why is that trickier than it seems?

In an age of climate emergency, setting an emissions reduction goal for a transit agency should be straightforward. But for complex reasons that are far from the public eye, it’s harder than you’d think.

The Board of Directors of Lane Transit District, Oregon’s second-largest transit agency, unanimously passed ambitious and substantive greenhouse gas reduction goals on June 17, 2020. As a member of that board and a long-time community climate action advocate, I’m proud of our new policy. We have responded to our community’s calls for action and set a course for the agency.

Yet the task is more complex than initially meets the eye.

No, I’m not talking about the usual hurdles – educating people at the governance level, settling on concrete numbers, shepherding a goal through the appropriate bureaucratic process, assuaging the concerns of the staff who have to implement, and so on. Those issues, while real, are well understood and common to many settings in the public and private sectors. They can loom as barriers, but solving them comes down to a well-known recipe of elbow grease, shoe leather, and persistence.

Summary of Lane Transit District’s Climate Action Policy

Short run
Procure (i.e., have under contract) 25 electric buses within three years
Long run
75% GHG reduction by 2030, 100% GHG reduction by 2035
Collaboration
Work with partner jurisdictions to develop joint transportation / land use goals
Read LTD’s press release for more details on the climate policy goals.

Instead, I’m talking about the trickiness for transit in particular. Three aspects in particular are worth your time, if you’re interested in setting and achieving meaningful emissions reduction goals for a transit agency: the technology stage for battery electric buses (BEBs); the place of transit in the transportation system; and the peculiarities of transit vehicle funding at the federal level. I have a few solutions to offer, but there’s more work for all of us to do.

Tricky barrier #1: the confusing state of the tech

This barrier may not be so tricky if you’ve followed clean tech generally and transportation electrification specifically: new technologies, a lack of experience buying and operating new widgets, the absence of surrounding infrastructure – like the aforementioned ‘soft’ problems, these ‘hard’ problems are more general to climate action efforts.

Look again, though: first, the state of battery electric buses (BEBs), far and away the leading option for low-carbon buses. BEBs are at an inflection point. Already well established in China, BEB volumes outside of China are small but rising quickly; the prices of their components, especially the batteries, are falling quickly (see the figure below); and economies of scale now promise to push vehicles prices into lucrative unsubsidized competition with diesel incumbents.

Bloomberg New Energy Finance, 2019 Sustainable Energy in America Factbook

That said, being on the cusp is tricky because the technology still feels a bit risky. And objectively, it probably is – lots of agencies have been burned by trying something new ahead of its time.

Complicating the matter: other shiny options that, despite deep flaws, confuse the matter. Consider two, hydrogen and renewable natural gas. The idea of hydrogen fuel cell vehicles has been around so long that it’s easy to raise the possibility and get real attention. Upon closer examination, hydrogen is no competition for electricity: the vehicles cost dramatically more upfront than BEBs (whose first costs are a large step above conventional diesel), and the fuel is both expensive and hard to come by (comparing poorly with electricity’s ubiquity and falling costs). And still, people devote real media bandwidth to hydrogen – despite its irrelevance to the short and medium run.

Renewable natural gas (RNG) is another complicated distraction, more potent because the basic technology – compressed natural gas (CNG) buses – is standard fare in several markets, notably California. If you’re starting from diesel, natural gas delivers excellent improvements in air quality, but not much in the way of greenhouse gas emissions, hence the attraction of RNG that typically provides extremely low carbon intensity. Unfortunately, RNG is hard to find, and it’s often expensive, certainly compared to natural gas.

Ultimately, why does the technology confusion matter? Because it serves to distract and make goal-setting challenging. Ultimately, we got around this confusion at Lane Transit District with a few specific components:

  • A technology-agnostic GHG reduction goal. Our goals for out years do not prescribe the propulsion systems we’ll deploy in the long run – as we shouldn’t, given the rate of technological change we’re experiencing.
  • A short-term commitment for electric buses. BEBs are the best game in town right now, so this short-term procurement goal allows us to get moving. Furthermore, the risk of having a slice of the fleet that’s electric appears low, even if other technologies surge. Either way, we’ll have time to build on or pivot from our short-term procurement.

Truth be told, the technology piece was the easy one. Hold on to your seats for the next two.

Tricky barrier #2: the way agencies pay for buses

From afar, you might assume that transit agencies just…buy their buses, kind of the way most private and public entities make large purchases. Ah, the truth is far more arcane, and in ways that make long-term goal-setting tricky.

First, transit agencies don’t really buy their buses with their own money. The Federal Transit Administration (FTA) is responsible for a huge share of funding for buses, through moderately complicated “formula funds” disbursed on a semi-regular schedule. The details of this grant program, the Transit Award Management System (that’s a real thing), or the history of capital funding for transit (dating to the Johnson administration) are not important right now. Suffice it to say that agencies have come to rely on the federal government for crucial matching funds for vehicles, while regular local sources generally fund operations.

The predictable result is that agencies don’t do, or even have any incentive to perform, thorough cost-benefit analysis of their vehicles. Of course the agencies still worry about maintenance costs, and there’s always an incentive to replenish the fleet as aging vehicles require more upkeep. But in general, a given agency is not fully exposed to the life-cycle costs for its vehicles. Indeed, no one – neither the federal government nor an agency receiving federal funds – is on the hook for the full costs. Accordingly, no one optimizes with those costs in mind.

Combine this insight now with aforementioned Tricky barrier #1, and mix thoroughly: agencies do not (nor do they have any incentive to) analyze the full costs of their vehicles; and at the same time, we’re moving into a period of technological change. The extra twist is that the ratio of capital costs to operating costs is changing, too: it is the consensus in the automotive industry that electrification will means higher costs upfront and lower costs down the road, with the promise of considerable net savings. For the caricature of this shift, consider that Tesla’s online order form cheekily includes gasoline cost savings in the pricing by default (don’t be fooled – select Purchase Price).

You gotta spend more to save more. (Whoa, look out: the sticker price is actually $79,990.)

Furthermore, the FTA-driven schedule of procurement comes to define the rate of fleet renewal – and the per-bus match by the federal government therefore looms large. Combined with the absence of life-cycle costing and technology uncertainty, we have a perfect storm: electric buses seem “expensive” even when they aren’t, simply because the current system for capital expenditures has unduly focused our minds on first costs.

To FTA’s credit, the agency has created a Low or No Emissions grant program, with the catchy short-hand of “low-no” grants. Still, the program has fixed funding and is competitive, meaning simply that not all applicants get funded. The finer point here: There is no explicit effort to fund only those buses that are most economically advantageous. In short, even at FTA, cost-benefit analysis isn’t driving the decisions.

Tricky barrier #3: the place of transit in local transportation systems

The biggest challenge of climate goals for transit is the seeming contradiction: more transit is better, almost no matter what, because well-used transit is low-carbon transportation, almost no matter what the fuels and propulsion systems are for the buses or trains. Bluntly, we probably want more emissions from transit in order to decrease emissions for the transportation system as a whole.

In our goal-setting process, we didn’t chase our tails on this topic for too long, but only because we fairly quickly punted in the only meaningful way we could: we pledged to work with our local jurisdictions – primarily the cities of Eugene and Springfield, and also Lane County – to develop joint climate goals and other collaborative efforts. As the transit agency, we are stewards of the transit system. The broader transportation infrastructure consists overwhelmingly of right-of-way owned and maintained by municipal governments, and of privately owned vehicles that lower-carbon modes should, over time, usefully displace. Ultimately, practicalities aside, one would want transportation system-wide carbon reduction goals since a focus on any one organization’s bailiwick or any one set of assets could fail to capture the desired shift.

I have no regrets about this path. First, the City of Eugene already has ambitious policy that should make it a willing partner. Watch this space for future joint goals between Eugene and LTD, as it will require innovation – there is no template for such goals. And my experience has made it extremely clear that city staff everywhere are allergic to goals over which they do not have total control. In transportation, that understandable but counterproductive impulse leads toward extremely boring goals and away from the heart of the matter.

We have to confront that aversion (to scarily broad goal-setting) because it’s everywhere. Indeed, I once had an hour-long argument with a transportation planner about whether his city’s transportation goals should include modal split – the shares of trips by car, bus, bicycle, etc., respectively. He pointed out that the city can’t dictate to people how they may get around; I pointed out that the city’s infrastructure frames all transportation decisions, largely determining the efficiency, convenience, cost, and safety of those trips. Both observations are correct, but the correct goal for a community is one that captures collective ambitions. That means the whole transportation system, and that means metrics for a multi-modal landscape (among other things). Our emissions goals at LTD are not yet there.

Second, and subtly, we have to keep in mind that more generally, we don’t want to minimize the negative impacts of the transportation system if and when that just means minimizing transportation. My favorite bumper sticker that makes this point says, “Save the planet – kill yourself.” While it’s a potentially efficient emissions reduction strategy, I don’t think it’s effective, scalable, or desirable policy.

This should not be our greenhouse gas reduction strategy.

The joke is instructive: the essential insight (that simply scaling back our provision of wants and needs leads to decreased carbon emissions) forces us to articulate what we really want. I would argue that, in general, we want more transportation. Not more VMT, not more gasoline and diesel combusted, not more parking spaces – but more mobility, more trips, more people getting to what they want and need to do. We must doggedly seek ways to advance human wellbeing while achieving our climate goals – and for transit, that is doubly so, as our transit-dependent populations rely on us for meeting basic needs and for participating in our communities.

Next steps: to collaboration, and beyond

Clearly, we are excited, at LTD and in the broader Eugene-Springfield community, to have set ambitious climate targets for transit. I also believe that we have navigated many of the potential pitfalls of the process.

Of course, the rubber will truly meet the road when we can work with partners to create a multimodal, affordable, low-carbon transportation system. Only then will we realize our agency’s goals, which, at the end of the day, are about the community as a whole.

Joshua Skov is a longtime sustainable business consultant and faculty in the Center for Sustainable Business Practices at the University of Oregon. He was appointed to the Lane Transit District board of directors in 2018 by Oregon Governor Kate Brown.

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