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Fall/Winter 2001 Vol. 1 No. 2



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In Depth


Protecting the Environment Through Government Intervention:
Pollution collage ©PhotoDisc How Well Does It Work?

Federal pollution-control programs have been controversial almost since their inception, with policy-makers questioning whether they really work and are worth the expense and effort. Several new Research Council reports examine some of the government's environmental programs in detail.


Retooling Federal Fuel Economy Standards

The need for improved fuel efficiency was obvious back in 1975. Memories of the energy crisis during the preceding two years were still vivid, and people were concerned that they might again have to wait in long lines to buy gasoline at inflated prices. That is when the federal program known as the Corporate Average Fuel Economy (CAFE) standards was established -- regulating the minimum gas mileage required for new cars and light-duty trucks sold in this country.

But much has changed since 1975. The long lines are gone, and in spite of fluctuating and sometimes rapid spikes in gasoline prices, consumers are buying larger vehicles -- especially sport utility vehicles, minivans, and pickup trucks -- that are held to less stringent standards for fuel economy and typically use more gas than passenger cars. Given this trend, it should come as no surprise that the nation's overall fuel economy has been slipping. And with this slippage, the worry over U.S. dependence on foreign oil, as well as concerns about the contribution of vehicle emissions to global warming, continues to mount.

Against this backdrop, Congress asked the National Research Council to study the effects of CAFE standards over the past 25 years, along with the effects that potential changes to the program might have. Here's what the study committee concluded: While the standards have helped reduce dependence on imported oil and lower emissions of greenhouse gases, changes to the CAFE program could achieve the same end more efficiently and more equitably -- and provide more flexibility to carmakers.

Pumping gas ©PhotoDisc "Technologies already exist today that could significantly reduce fuel consumption of new cars over the next 15 years," said Paul Portney, committee chair and president of Resources for the Future in Washington, D.C. These include engine advances that reduce internal losses of energy, more efficient powertrains such as five-speed automatic transmissions, and aerodynamically improved vehicle designs. While these upgrades would add to the purchase price of new vehicles, the committee identified combinations of technologies that would produce gasoline savings more than sufficient to offset the initial increase in cost. Even so, it could take decades before new, more fuel-efficient vehicles have replaced the 200 million cars currently on the road.

Better fuel economy also can be achieved by reducing a vehicle's size or weight, but one risk of downsizing is that smaller cars involved in crashes with larger vehicles tend to "lose." After examining analyses conducted by the National Highway Traffic Safety Administration (NHTSA), the committee estimated that the downsizing of vehicles -- whether spurred by the market or a result of CAFE standards -- has slowed the rate of decline in fatalities. However, this area is quite controversial among analysts and the committee called on NHTSA to conduct further research.

The report identifies a number of changes that could be made to improve the CAFE program. For example, the program's system of fuel economy credits should be expanded to give automakers financial incentives for improving fuel efficiency. Currently automakers can accumulate these credits if their fleets of cars or trucks exceed the standards, and use them to make up for deficiencies in their fleets another year. In an expanded scenario, those credits could be traded. Automakers could buy credits from other automakers if their fleets are below the standards, or they could buy credits from the government at a fixed price. Under this scheme, the ability for automakers to profit from each gain in fuel efficiency would motivate them to continue making improvements even if their fleet's average fuel economy exceeded federal targets.

In addition, Congress should consider switching the CAFE program to standards that are based partially on weight instead of setting fuel economy standards on the basis of whether a vehicle is a car or truck. A weight-based system that encourages car manufacturers to downsize their largest vehicles could ultimately reduce the enormous variance between large and small vehicles, which is an important safety risk.


Effectiveness and Impact of Corporate Average Fuel Economy (CAFE) Standards. Committee on Effectiveness and Impact of Corporate Average Fuel Economy Standards; Board on Energy and Environmental Systems, Division on Engineering and Physical Sciences; and the Transportation Research Board (2001, approx. 250 pp.; ISBN 0-309-07601-3; available from National Academy Press, tel. 1-800-624-6242; $40.00 plus $4.50 shipping for single copies).

The committee was chaired by Paul R. Portney, president, Resources for the Future, Washington, D.C. The study was funded by the U.S. Department of Transportation.


A Closer Look At Car Inspections

Reducing harmful emissions from vehicles is another challenge that policy-makers have been grappling with for years. In addition to contributing to a host of environmental ills, these pollutants have been linked to serious respiratory and other health ailments. Such woes spurred the government to institute vehicle inspection and maintenance programs in jurisdictions that violate federal clean air standards.

Although the programs vary from state to state, they typically involve regularly testing cars and trucks to measure emissions of carbon monoxide, hydrocarbons, and in some cases nitrogen oxides. Those cars that fail are required to have their pollution-control systems repaired. But independent and state-sponsored evaluations have shown that flawed computer models used by the Environmental Protection Agency and state agencies overestimate the reduction in vehicle emissions that is attributable to inspection and maintenance programs. In addition, many motorists view the programs as a nuisance and wonder whether they're necessary.

A new report by a Research Council committee examines the effectiveness of vehicle inspection programs and concludes that the programs are actually targeting the wrong cars. Most states are using too many resources on inspecting newer cars, which have the latest pollution-control technologies and are generally cleaner than older, faulty models, the report says. In contrast, these malfunctioning vehicles, which make up only about 10 percent of the nation's fleet, typically emit about 50 percent of the most harmful air pollutants produced by motor vehicles. These high-emitting vehicles should become the primary target of state emissions inspection and maintenance programs.

Traffic ©Digital Vision But focusing on these high emitters raises legitimate concerns about fairness, the report acknowledges. Malfunctioning vehicles are more likely to be owned by people with limited economic means. Since many of the owners of these cars may not be able to afford to fix them, policies should be promoted that provide financial relief or other incentives so owners will obtain long-lasting repairs or replace faulty vehicles. There also is growing evidence that less testing of vehicles with a low probability of failure -- including exemptions for testing recent-year models -- could be very cost-effective.

Part of the credibility problem for vehicle inspection programs lies in the methods used to predict emissions reductions. States are allowed to use overly optimistic assumptions in projection models, leaving them little incentive to verify whether the estimated emission reductions actually are occurring. Evaluation of the emissions benefits from inspection and maintenance programs should be based on information collected from vehicles as they are being driven. For example, remote-sensing devices could be used to estimate actual emissions from the on-road fleet, rather than relying on current technology that tests only those vehicles that participate in the inspection program.

EPA also grants emissions-reduction credits to states for inspection programs as part of the process for states to demonstrate compliance with air-quality standards. These credits should be closely tied to actual reductions that are based on observational and empirical data, not projections from models, the report says.

New technology may change how vehicle emissions tests are conducted in the future. For example, onboard diagnostic systems in cars built since 1996 illuminate a light on the dashboard to alert motorists to potential problems in both the exhaust and the emission-control components. But these systems do not actually measure emissions. EPA has issued a rule requiring states to use these systems for testing individual cars and trucks. An independent examination is needed to determine whether this technology will be effective as a testing device.

Evaluating Vehicle Emissions Inspection and Maintenance Programs. Committee on Vehicle Emission Inspection and Maintenance Programs; Board on Environmental Studies and Toxicology, Division on Earth and Life Studies; and the Transportation Research Board (2001, 260 pp.; ISBN 0-309-07446-0; available from National Academy Press, tel. 1-800-624-6242; $40.00 plus $4.50 shipping for single copies).

The committee was chaired by Ralph Cicerone, chancellor at the University of California at Irvine. The study was funded by the Environmental Protection Agency.


How Much Do We Really Benefit
From Energy R&D?

In the aftermath of the 1970s energy crisis, the U.S. Department of Energy was formed, in large part to conduct research on and create new energy-efficient technologies. Since then, the government has spent billions of dollars on energy research, mostly through DOE programs. Have these huge expenditures provided tangible returns?

A Research Council committee charged with answering the question found that these programs not only have benefited the economy, but also have been good for the environment and, to a lesser degree, national security as well. In fact, the funding provided by the government stimulated worthwhile research and development in areas where there was little incentive for the private sector to make improvements on its own.

Researchers with energy-saving light bulbs (U.S. Dept. of Energy photo) Of 39 programs in energy efficiency and fossil energy examined by the committee, the economic returns amounted to an estimated $40 billion from an investment of $13 billion. Nearly three-quarters of the benefit came from three energy-efficiency programs that cost only about $11 million, the report says. For example, significant advances were made in developing better compressors for refrigerators and freezers, energy-efficient fluorescent-lighting components, and heat-resistant window glass. Government standards and regulations encouraged adoption nationwide, dramatically multiplying their impact.

DOE research also has produced significant benefits that cannot easily be quantified in terms of dollars, the report says. For example, big environmental gains were made in fossil energy with two technologies -- a cleaner, more efficient method for burning coal called atmospheric fluidized bed combustion, and nitrogen-oxides control to reduce emissions. Both of these technologies decreased harmful nitrogen oxides in the atmosphere by more than 26 million tons and sulfur dioxide by 2 million tons. The committee estimated that the resulting savings could translate to more than $60 billion in avoided damage and mitigation costs.

However, not all of DOE's programs have lived up to their expectations. Research programs that attempted to introduce new technologies without the necessary incentives for the private sector to adopt them were most likely to falter. Market incentives, such as new standards and regulations, can be useful for increasing the chances that a technology will be adopted, the committee said. And DOE should continue cost-sharing efforts with industry, so that the most promising programs -- with the greatest potential for success in the marketplace -- are funded.


Energy Research at DOE: Was It Worth It? Energy Efficiency and Fossil Energy Research 1978 to 2000. Committee on Benefits of DOE R&D in Energy Efficiency and Fossil Energy, Board on Energy and Environmental Systems, Division on Engineering and Physical Sciences (2001, 240 pp.; ISBN 0-309-07448-7; available from National Academy Press, tel. 1-800-624-6242; $45.00 plus $4.50 shipping for single copies).

The committee was chaired by Robert Fri, senior fellow emeritus, Resources for the Future, and former director, National Museum for Natural History, Smithsonian Institution, Washington D.C. The study was funded by the U.S. Department of Energy.


A Clearer Process For Clean Water

Despite considerable success by the federal and state governments in controlling discharges from wastewater treatment plants and industry, pollution from other sources continues to jeopardize water quality. Nutrients, bacteria, sediment, pesticides, and chemicals from lawns and farms make their way into the nation's lakes and streams, resulting in declining fish and wildlife populations and waterways choked by "red tides" and algal blooms.

Clean-water testing ©Index Stock Imagery Now, as part of its comprehensive strategy to clean up these waters, the federal government is focusing anew on "nonpoint" sources of pollution in addition to its ongoing mission of targeting "point" sources, namely drain pipes or channels. Under the 1972 Clean Water Act, each state is required to identify polluted bodies of water, put them on a cleanup list, and establish what are known as Total Maximum Daily Loads (TMDLs), which determine the amount by which sources of pollution would need to be reduced to meet the state's standards. There are now about 21,000 bodies of water that have been identified for cleanup, from the Anacostia River in Washington, D.C., to the San Francisco Bay. In addition, regulations enacted in 1992 by EPA require states to meet a deadline of eight to 13 years for establishing TMDLs.

A new rule published last year by the agency to update the 1992 regulations has come under fire, however. Only six states have enough data to fully assess the condition of their waters, according to the General Accounting Office. What's more, the enormous time and resource constraints, coupled with legal pressures, caused many states to list bodies of water without adequate data, creating a large caseload requiring cleanup efforts. Given these concerns, Congress asked the National Research Council to step in and look at the scientific basis of the TMDL program.

The Research Council's report says that sufficient scientific information exists for the TMDL program to move forward, although technical and policy-related issues need addressing to improve the effort. For example, considerable uncertainties exist about whether some of the waters on state lists actually violate water-quality standards. Not only that, other bodies of water are impaired but have yet to be identified formally. To make sure precious resources are going to the most polluted waterways, EPA should implement a two-step process that first puts waters in question on a preliminary list before moving them to the final list of those that require cleanup, the report says. This would give states time to study those bodies of water for which scant data exist, while at the same time concentrating efforts on sites that are in the greatest need of cleanup. If no legal mechanisms exist for states to create these preliminary lists, Congress should create one.

These preliminary lists, however, should not be viewed as a way to delay cleanup efforts, the report says. No body of water should be permitted to remain on a preliminary list for more than a predetermined period that allows for problems to be identified and solutions to be developed. To make up for any lack of scientific information that might cause a delay, states should adopt an approach called adaptive implementation, whereby cleanup plans are periodically assessed and revised using new data and scientific tools. This would allow the TMDL program to move forward in the face of uncertainties about the effectiveness of cleanup efforts.

An important part of improving the TMDL program is developing more refined water-quality standards at the state level. Rather than focusing on broad criteria based on whether bodies of water are suitable for fishing or swimming, states should establish standards for more specific uses, such as supporting aquatic life or maintaining clean drinking water supplies -- a practice that is already in place in Ohio.

In response to the report's recommendations, EPA put the new rule on hold for 18 months, pending further review.


Assessing the TMDL Approach to Water Quality Management. Committee to Assess the Scientific Basis of the Total Maximum Daily Load Approach to Water Pollution Reduction, Water Science and Technology Board, Division on Earth and Life Studies (2001, 122 pp.; ISBN 0-309-07579-3; available from National Academy Press, tel. 1-800-624-6242; $28.25 plus $4.50 shipping for single copies).

The committee was chaired by Kenneth Reckhow, professor of water resources at Duke University, Durham, N.C. The study was funded by the U.S. Environmental Protection Agency.

  -- Molly Galvin, William Kearney, & Jennifer Wenger



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Copyright 2001 by the National Academy of Sciences