Americans set all-time records for SUV and pick-up purchases last year, despite sharp economic downturns and historic travel drop-offs caused by pandemic lockdowns. https://usa.streetsblog.org/2020/11/10/as-biden-campaigned-on-green-cars-u-s-truck-sales-soared/
U.S. car buyers almost tied the all-time record for truck and SUV purchases just weeks before Americans elected a president who wants to get rid of gas-guzzlers by 2050.
According to data from the Federal Reserve, Americans bought a whopping 12.55 million vehicles in September classified as light trucks (which includes most sport utility vehicles, vans and crossovers), almost tying the all-time record of 12.59 million units sold in July 2005, in the heyday of the real estate bubble that would go on to burst, causing the 2009 economic crisis.
Smaller automobile sales, by contrast, are only barely beginning to climb out of their COVID-19 trough. Dealerships reported 3.74 million vehicles sold in September – a big jump from the historic low of 1.97 million sold in April, at the height of the COVID-19 lockdowns. But the September numbers are still 14 percent lower than the previous 45-year nadir, which came in the depths of the 2009 recession. (It probably doesn’t help that automakers are rapidly phasing out small cars.) Source: FRED
Put the two numbers together, and sales of cars and light trucks are actually up 5 percent above the same month in 2019, despite the fact that the country is suffering from steep unemployment and a global pandemic. The surge is almost exclusively being driven by people who are buying oversized vehicles.
America’s growing appetite for megacars may seem odd in the wake of the presidential election, in which a margin of roughly 5 million Americans elected a candidate who has pledged to invest in transit and electric vehicles.
But, of course, who shows up to the ballot box doesn’t always look like who shows up to the auto dealership.
The Federal Reserve does not collect monthly data on the political affiliation of car buyers, but some evidence suggests that GOP voters may simply be purchasing more vehicles right now than their Democratic counterparts. In a recent survey of 46,000 Americans, Republicans not only constituted the largest share of the car-buying market (33 percent) — groups with similar vehicle aesthetics and presidential voting habits, libertarians and conservatives, constituted another 11 percent — but they also made up 55 percent of the SUV market.
When it comes up to pick-up trucks, Republicans out-buy Democrats a staggering eight to one. Although the average car on U.S. roads is 12 years old, Republicans are more likely to own a vehicle for just three to six years before they upgrade.
The same study also found that voters who self-identify as Democrats, liberals or progressives are more likely to forgo private-car ownership, or at least own their cars for a little longer before they trade them in for new models. Pair that with the fact that blue states experienced the nation’s highest unemployment rates in September, and it’s likely that the car buyers flooding dealerships right now mostly lean to the right — and that climate-minded would-be Prius buyers are holding off until next year.
Of course, if we really want to end climate change and our roadway-death crisis, we don’t just have to lower the proportion of monster trucks on our neighborhood streets. We have to decrease the number of cars period, including the low- and non-emitting ones, while enacting strong vehicle-safety standards on every model — and giving every resident safe, convenient and affordable ways to get around without a private motor vehicle.
By Ania Nussbaum
Meanwhile, gas taxes failed to adequately fund the Highway Trust fund even in the 12 years prior to the pandemic, forcing Congress to borrow from general funds provided by all taxpayers to subsidize the maintenance of roads almost exclusively intended for drivers.
A VMT tax, by contrast, would finally flip the myth that motorists pay for the roads they use — at least if it’s deployed with care.
“In the long term, a mileage tax makes the most sense to fund infrastructure,” said Ethan Elkind, director of the climate program at UC Berkeley’s Center for Law, Energy & the Environment. “As we move toward more fuel efficient and electric vehicles, revenues from gas taxes won’t support basic maintenance. And there’s a fairness principle that people who drive more should pay for more of the road upkeep, although we have to be careful about equity impacts for rural residents who have to drive more, and possibly consider additional factors like vehicle weight, since heavy trucks cause most of the road damage.”
Of course, experts are divided on whether rural residents actually drive all that much more than their urban counterparts, as well as whether or not those travel patterns are changing. But equity for high-mileage drivers isn’t the only reason experts caution against treating the concept of a VMT tax as a silver bullet.
Some environmentalists have been wary of the funding mechanism because it could flatten incentives to buy fuel-efficient cars and give gas-guzzlers a kickback, unless the tax is tiered to charge the drivers of heavy, dirty cars a little more. In a survey conducted by the Mineta Transportation Institute last year, 49 percent of respondents said they’d support such a “Green VMT” system, compared to 45 percent who said they’d support a flat mileage fee on all vehicles regardless of fuel efficiency.
Others have questioned the potential costs of switching over to a per-mile charge. Because a VMT tax would require installing mileage counters, sourcing smart phone data, or otherwise tracking the distance travelled by every car in America, the Federal Highway Administration estimated that between 5 and 18 percent of revenues from a national pay-as-you-drive program would be spent on collection alone, compared to the relatively cheap overhead of taxing a handful of gasoline wholesalers. (One study even estimated that replacing the fuel tax “could result in collection costs of more than $20 billion annually – about 300 times higher than the federal fuel tax,” though it should be noted that the study was funded by a group heavily associated with the trucking industry.)
Taken together, some experts think these two challenges are more than enough to damn any national VMT program in the short run; instead, they recommend a combination of indexing the gas tax to inflation and total fuel consumption, as well as assessing annual fees based on the miles-per-gallon-equivalent rating for EVs.
But while experts like Elkind say that a mileage tax “may not quite be ready for prime time at the national stage,” states are already ironing out the kinks in smaller programs. Oregon, Utah and California have all embarked on pilot projects to study pay-as-you-drive taxes, and the next infrastructure bill could empower more communities to try out the innovative idea.
“I’d like to see any federal infrastructure bill leave the door open to a mileage tax, through funding for more state pilots,” Elkind added.
No matter how we collect our transportation taxes in America in the coming years, most sustainable transportation advocates will probably agree one thing: we definitely need to stop spending all that money on infrastructure that only benefits drivers.
“The current climate, equity, and aging infrastructure challenges are critical to the funding discussion of any transportation legislation,” said Deron Lovaas, senior policy advisor for the National Resources Defense Council. “Congress should invest in clean mobility choices including public transit, walking and biking and EV infrastructure, and consider fixing what’s actually broken with the federal gas tax.”
Three Reasons to Put the 1980s in the Past And #EndTheEightyTwentySplit
By Kea Wilson
Asingle, 38-year-old transportation law has locked America into a car-dominated status quo for far too long — and advocates believe the next Congress should finally fix the problem.
Transportation for America is mounting an effort to end the “80-20 split,” a Reagan-era policy that restricts the Department of Transportation from spending more than 20 percent of Highway Trust Fund revenues on transit projects. The little-known rule has long been decried by advocates as the single largest structural barrier to greening our transportation sector at large scale, and repealing it — as well as the policy that allows states to “flex” (read: steal) as much as $48 billion a year that are supposed to be dedicated to transit projects to cover shortfalls in highway revenues — would be a game-changer.
Striking down the 80-20 split, though, will require a little lawmaker education. When it was first written in 1982, the famous ratio was actually marketed to pro-transit congresspeople as a boon to their cause — because before it, public transportation got no money at all from the nation’s rock-bottom fuel taxes. U.S. Department of Transportation Secretary Drew Lewis initially proposed the ratio in order to convince big-city congresspeople to support increasing the gas tax in the middle of a recession, arguing that devoting 20 percent of a new five-cent increase to a new Mass Transit account within the Highway Trust Fund would give urban areas a bigger share of the new construction jobs the tax would produce.
But what was once an important step forward for sustainable travel soon transformed into a regressive trap. Rather than just the first effort on the path to more equitable transit funding, the 80-20 split soon became regarded as a foundational edict, essentially locking the Department of Transportation into an ironclad ratio that prioritized roads over trains tracks and highways over bus lanes. And it’s stayed that way for decades, even after the American public learned what global warming was in the late 1980s — a development that should have demanded that America start shifting its funding towards less polluting modes.
T4A thinks giving the federal government more flexibility on how they spend those gas taxes is essential to repairing the harm done by the Reagan-era policy — and they’re recommending that the next Congress devote at least 50 percent of funding to mass modes. But the group also questions whether, in the future, we could go even further.
“Why shouldn’t transit receive 80 percent or even 100 percent of transportation dollars?” wrote Emily Mangan on the organization’s blog. “We are not saying that other modes should not receive any money. The point is that all assumptions should be questioned and funding should go to projects that create jobs quickly in a stimulus bill and support today’s needs and goals, not those of 40 years ago.”
Here are three strong arguments in favor of letting federal dollars flex in transit’s favor (and a petition you can sign if you agree).
The Highway Trust Fund doesn’t pay for our highways anyway
The biggest political obstacle to giving transit a bigger piece of the gas tax pie has always been the perception that drivers pay their taxes at the pump with the expectation that their money will be spent on building and maintaining roads for drivers — and if the fund runs a surplus, well, that cash should just go towards building better roads, not subsidizing transit.
The trouble is, the Highway Trust Fund has never run a surplus — and all those gas taxes actually don’t cover the costs of our wildly expensive road network. The federal gas tax has not changed since 1993, even as we’ve built more and more highways across the nation: in 2016, for instance, the fund was authorized to pay out $43.1 billion in highway contracts over the course of the year, but actually raised just $36.2 billion at the pump. And those are just the most recent numbers available that quantify how drastically the gas tax under-performs; the Fund on the whole has been in debt since 2008, requiring the government to siphon about $144 billion from general funds in the years since — plus all those “flex” dollars stolen from transit agencies.
Maintaining the 80-20 split, advocates argue, is just a bandage over what we really need: a slate of new, adaptable road funding mechanisms that reflect the actual damage that drivers do to our roads, and can actually cover the needs of our highway system as they change over time. A combination of vehicle miles travelled taxes, variable congestion tolls, and emissions fees on larger vehicles could be a place to start — but we shouldn’t wait on finding that magic recipe to #EndTheEightyTwentySplit.
Funding transit could help end our highway maintenance backlog
Of course, the idea of pulling any funding for the highway system in the midst of a terrifying road maintenance crisis sounds a little irrational — at least at first. And some advocates argue that if we just ease up on “flexing” all those transit dollars away from public transportation, the 80-20 split could put a few more drivers on the bus, lessening the pressure on our roads just enough to give state DOTs the money and space they need to fix all those crumbling roads and bridges once and for all.
But most Americans don’t realize that many states spend their highway trust fund dollars on building more roads rather than maintaining the ones they have. Mississippi, for instance, spent a whopping 77 percent of its capital funding last year on roadway expansion, even though the percentage of its roads that were rated in “poor” or “dangerous” condition by engineering groups like the American Society of Civil Engineers actually increased over the same year. Ditto Arizona (52 percent), Nevada (54 percent), North Carolina (55 percent), and more — a phenomenon that’s predictable, considering how much our culture applauds politicians for christening new highway interchanges, and how relatively few plaudits they get for repairing potholes. (By comparison, Massachusetts spends just 4 percent of its capital dollars on new roads.)
Meanwhile, a Goldilocks approach to sustainable transportation funding won’t save the planet — and one penny of a five percent tax isn’t nearly enough to build the kind of strong transit network we’d need to make car-free commuting a viable option for American travelers, nevermind a truly attractive one. Paradoxically, giving highway agencies even less money — and diverting that cash to alternative modes now — could be the shot in the arm our construction-addicted states might need to finally buckle down and do relatively inexpensive maintenance projects, rather than continuing to justify expensive new road-builds that only grow the percentage of trips we collectively take by car.
We’ve already ended the 80-20 split — now we just need to make it permanent
Tradition is a pretty poor argument for maintaining bad policy. But when it comes to the 80-20 split, some norms have already begun to fall away on their own in the last few months alone — and now it’s just a matter of making the change permanent, rather than a pandemic-era fluke.
“Whether legislators realized it or not, the recently passed $2-trillion CARES Act has already disrupted the status quo to deal with immediate needs,” wrote Emily Mangan of Transportation for America. “The act includes $25 billion in direct, emergency assistance for transit at a time when revenue is plummeting. That’s more than double what the federal government usually spends on transit in a year.”
That $25 billion wasn’t enough to prevent agencies from cutting service and borrowing cash to stay afloat, but it was a seismic shift in what most Americans thought was possible – especially considering that highway agencies got virtually no relief, drivers didn’t exactly find themselves stranded.
Once the pandemic ends and revenues rise, Congress will have the option to do something truly radical: funding transit agencies adequately for the first time in U.S. history. A 50-50 split is a start — and in time, we can do even more.
The auto industry’s latest successes should serve as a sign that we are long overdue for a bold, new federal vision — and if nothing else, we should probably make it a little less attractive for Americans to constantly buy the biggest cars they can get.
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France to Impose $22,240 Pollution Tax on SUVs and Trucks
The measure comes on top of tough new European rules being phased in next year to lower car emissions. Bloomberg DEC 20, 2019
France is taking aim at SUVs by raising a tax on heavier and more polluting vehicles, a measure that comes on top of tough new European rules being phased in next year to lower car emissions.
Under a law adopted by parliament this week, cars emitting carbon dioxide above a certain threshold will be subject to a 20,000 euros (US$22,240) penalty in 2020, higher than the existing 12,500 euros. At the same time, the government is considering reducing cash incentives for the purchase of electric cars.
The measures show policy makers are still finding their way on how best to back a shift to cleaner cars. Sport utility vehicles are among the most polluting because they are heavier and less fuel efficient. Yet they made up 30% of sales in France in the first 11 months of the year, according to Paris-based consultancy Inovev. While electric-car sales are growing quickly, they still make up a tiny proportion of the overall market.
France’s SUV levy comes as the European car industry prepares for the phasing in next year of emissions rules that will see carmakers fined if their total annual vehicle sales exceed an average carbon limit.
The French finance ministry has estimated its SUV penalty could yield 50 million euros a year in revenue for the government, which will be used to help carmakers shift to cleaner cars. Finance Minister Bruno Le Maire has also criticized SUV advertisements, saying they should warn consumers of the detrimental effects of the cars on the environment.
At the same time, France is also seeking to reduce subsidies for electric and hydrogen cars in the years to come on the assumption that prices will drop. In 2020, the central government will give as much as 6,000 euros toward the purchase of an electric car costing less than 45,000 euros. The handout is set to drop in 2021 and 2022, the environment ministry has said.
The SUV and electric-car measures have come under fire from the French industry.
“It’s a double penalty for consumers,” Luc Chatel, head of French lobby group PFA said in a statement, which called the policy “incoherent.”
“The electric-car market won’t take off without strong purchasing incentives,” he said. “Everyone has something to loose: The industry, the environment and the purchasing power of the French.”
Subsidies to consumers toward buying electric vehicles can be costly. France’s bonuses reached 550 million euros last year, according to the French auditor. Germany has also put in place similar incentives, which BloombergNEF estimates could cost as much as 2.6 billion euros by 2025.