Closing the Transportation Climate Pollution Gap

We highlight innovative transportation actions states can take to ensure they meet or surpass their climate targets.

With an abundance of policies to choose from, the time has never been better to reduce the largest share of climate pollution in most US states: transportation-related emissions. New data in RMI’s state scorecards demonstrates how climate-leading states will make significant transportation decarbonization progress this decade, but gaps remain in many states.

Most leading states have adopted the Advanced Clean Cars II (ACC II) and Advanced Clean Trucks (ACT) regulations to require sales of zero emission vehicles (ZEVs) — two core policies that will accelerate adoption of new, clean vehicles and would be beneficial for all US states to adopt. However, even states that have adopted these policies are still left with a transportation pollution gap between where we expect their pollution levels will be in 2030 based on current policy, and their share of the 2030 nationally determined contribution (NDC), the country’s commitment to climate pollution reduction to keep global temperature rise below 1.5°C. Fortunately, there are many innovative transportation actions leading states can take to build upon and go beyond ACC II and ACT, to ensure that they meet or surpass the 2030 NDC target.

The Importance of ZEV Sales Targets

Due to advances in technology, federal funding and standards, and state policies, transportation pollution is set to decline over this decade — but not fast enough to meet the 2030 NDC target (Exhibit 1). Failure to meet the transportation sector’s portion of needed pollution reductions shifts pressure onto more difficult-to-abate sectors like industry, buildings, and agriculture.

Exhibit 1: US Transportation Sector Climate Pollution through 2050 (million tons CO₂/y)

RMI graphic. Data: Energy Policy Simulator

Several states have already adopted strong policies that will reduce transportation pollution. ACC II, developed by California and adopted by other climate-leading states, requires auto manufacturers to sell an increasing percentage of light-duty zero-emissions vehicles over time, stipulating a 35 percent ZEV sales requirement in 2026, ramping up to 100 percent in 2035. In a similar vein, California’s ACT rule requires truck manufacturers to sell an increasing percentage of medium- and heavy-duty zero-emissions trucks. The vehicle tax credits in the Inflation Reduction Act (IRA) and public investments in vehicle charging will make the ACC II and ACT sales targets easier to achieve. Adopting the two regulations leads to significant economic, health, and pollution reduction benefits and is essentially a prerequisite for a state to plausibly meet near-term and mid-century climate targets (Exhibit 2).

Exhibit 2: Progress Needed to Meet Transportation NDC Target in Select States

RMI graphic. Data: Energy Policy Simulator and 2023 State Scorecards.

For states that haven't already, adopting ACT and ACC II will go a long way toward reducing their transportation pollution by 2030. For example, if Illinois adopts ACC II and ACT, it would go from 4.7 million tons of carbon dioxide equivalent (MT CO₂e) above its 2030 NDC target to only 0.9 MT CO₂e above (Exhibit 3).

Exhibit 3: Illinois’ Transportation Sector Climate Pollution through 2050 (MT CO₂e/y)

RMI graphic. Data: Energy Policy Simulator.

ZEV Standards Only Go So Far

Transportation pollution is driven by several factors, including the polluting potential of each vehicle, the amount of mileage driven each year, and non-road sources of transportation pollution, such as aviation fuel.

Adopting ZEV sales targets like ACC II and ACT is a critical step in reducing transportation pollution, but even as electric vehicle sales are rising as a proportion of new vehicles sold, the stock of vehicles is slower to turn over than it has ever been. In 2018 the average age of a heavy-duty Class 8 semi-truck was 12.8 years, up from 11.2 years in 2008; and the average age of light-duty vehicles went from less than 10 years in 2002 to over 12 years in 2021 (see Exhibit 4). That means many of the vehicles on the road today — the vast majority of which are gasoline or diesel-fueled — will still be on the road in 2030. Additional policies will be necessary to reduce pollution from vehicles already on the road or to retire them sooner than their average lifespan.

Exhibit 4: Average Age of US Light-Duty Vehicles over Time.  

RMI graphic. Data: IHS Markit.

In addition, decades of car-dependent development have led to continued increases in the amount people drive. This increase in vehicle-miles traveled (VMT) has in turn driven an increase in associated transportation pollution. Although the COVID-19 pandemic led to a sharp drop in VMT, public transit ridership has failed to bounce back from the crisis and drivers appear to be returning to their personal cars with confidence. VMT levels have nearly returned to pre-pandemic levels, and once again show an upward trajectory (see Exhibit 5).

Exhibit 5: Annual Vehicle Miles Traveled in the United States

RMI graphic. Data from FHWA.

Aviation pollution has grown even faster than on-road vehicle pollution (Exhibit 6) over the past decade, and low-carbon solutions have been slower to develop. The most promising near-term solution is sustainable aviation fuel (SAF). SAF is jet fuel with much lower life-cycle greenhouse gas emissions compared with conventional, petroleum-based jet fuel, due to the feedstocks and processes used to produce the fuel. Although the need to replace petroleum jet fuel with a compatible lower pollution alternative has been recognized for years, there has historically been a lack of effective policy and the SAF industry has been slow to commercialize and scale up.

Exhibit 6: Change in US Transportation Pollution Levels by Fuel Type, 2009–2019

RMI graphic. Data: EIA.

Solutions to Close the Transportation Pollution Gap

Adopting a ZEV sales standard is a “must do” for states to reach their share of the NDC, but the NDC target is a minimum, and many states, like Washington, Colorado, California, New York, Massachusetts, and Maryland, have more ambitious state climate targets. In addition to reducing climate pollution faster, states’ pursuit of supplementary actions could also improve quality of life and strengthen communities, reduce local air pollution, increase local economic development, and leverage IRA incentives while they are still available. To address remaining transportation sector climate pollution and take stronger actions, states could:

• Strategically invest federal transportation dollars to reduce VMT and strengthen communities. The 2021 Infrastructure Investment and Jobs Act (also referred to as the Bipartisan Infrastructure Law) was the largest federal transportation bill in US history, and states have great leeway in how their portion of the funding is spent. Most of that funding could be spent on transit, walking, biking, and vitally needed repairs to existing surfaces. Yet, up until this year, most states have done the exact opposite, spending four dollars on highway expansion for every one dollar spent on public transit. RMI has documented the way in which highway expansion increases traffic and pollution by inducing vehicle miles traveled, pushing states further from climate alignment. This year, however, Colorado and Minnesota made huge strides toward upending this outdated approach. Both states passed sweeping transportation packages, requiring their Departments of Transportation and metropolitan planning organizations (MPOs) to quantify the greenhouse gas impacts of all new surface transportation projects, including those created through induced demand. If the state or MPO exceeds their allocated climate pollution levels for a project, they can offset that impact through mitigation measures that reduce VMT, such as building new bike and pedestrian infrastructure and expanding transit service. In Colorado alone, this policy is expected to reduce 5 million tons of carbon pollution by 2030.
• Implement statewide land use reform to reduce barriers to urban development. Reforming land use policies to allow for more housing choices and to encourage compact development that is near destinations and accessible by transit, biking, and walking will reduce emissions, while addressing the nation's housing shortage. Integrating land use and transportation policy can reverse the negative impacts of urban sprawl by shortening the distances between homes and daily needs allowing people to drive less. A previous RMI analysis found that reforming land use in the fast-growing metropolitan regions of Austin, TX; Charlotte, NC; and Denver, CO, could deliver residential vehicle miles traveled (VMT) savings of up to 13%, building energy savings of up to 16%, and GHG emissions savings of up to 14%. Momentum is building with an increasing number of cities and states passing legislation to legalize multifamily housing types and to increase density by making better use of underutilized commercial spaces.
• Accelerate the deployment of light-duty electric vehicles beyond the Advanced Clean Cars II rule. The ACC II rule proposes new EPA standards on vehicles, and IRA tax credits work in harmony to set a solid foundation for electric light-duty vehicles deployment. However, to achieve additional pollution reduction, state leaders will have to enact new policy to optimize uptake of EVs. Research from Coltura has found that 10 percent of drivers — through a combination of long commutes and inefficient vehicles — are responsible for 32 percent of pollution from gasoline consumption. Using carefully designed incentives to switch those drivers to EVs sooner than the rest of the driving population could make a big difference in 2030 climate pollution levels.Vermont is the first state to provide a greater EV purchase incentive for these gasoline “superusers,” and California’s draft AB 2816 directs the state to provide EV incentive amounts based on the applicant’s past gasoline usage (e.g., a certain dollar amount per average annual gallon of gasoline used) with a higher allocation per gallon for low-income individuals. States could also couple a superuser incentive with a scrap-and replace policy, similar to California’s Clean Cars 4 All, which would accelerate adoption of electric vehicles within low-to-moderate income households. In addition, a Clean Mile Standard on transportation network companies like Uber and Lyft would enforce GHG pollution reductions and empower the private sector to develop innovative solutions to reduce its pollution. Lastly, achieving the significant transportation pollution reduction benefits afforded by EVs will require an electric grid that can support them. State policymakers should begin or expand conversations with electric utilities, utility regulators, and other stakeholders to ensure planning for and implementation of electric grid upgrades can take place in advance of the mounting wave of electrified vehicles.
• Accelerate the deployment of medium- and heavy-duty vehicles beyond the Advanced Clean Trucks rule. Often characterized as “difficult to abate,” medium- and heavy-duty vehicles will be a critical decarbonization target for leading states looking to close their transportation pollution gap. Despite making up only 5 percent of vehicles on the road, they’re responsible for nearly 30 percent of transportation pollution. They also disproportionately pollute communities of color. To supplement ACT, states looking for rapid electrification will need to invest in strong subsidies that speed up stock turnover, like California’s Carl Moyer Program and Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project (HVIP). Pairing ACT with a procurement mandate on large fleet operators like the Advanced Clean Fleets rule could nearly double the deployment of medium- and heavy-duty vehicles compared with the ACT rule alone. Federal transportation funding could also be used to electrify municipal buses and school buses.
• Support commercialization and require deployment of sustainable aviation fuel. The historical lack of effective policy to support the commercialization of SAF has meant a relatively unabated rise in aviation pollution, but new incentives from the IRA coupled with state action can start to reduce aviation pollution. Because new IRA tax credits for SAF run out after 2027, it is incumbent on leading states to encourage near-term expansion of the SAF industry and to incentivize SAF production post-2027. In their most recent state legislative sessions, Washington, Colorado, and Illinois all instituted incentives for SAF production which will “stack” with IRA incentives. To ensure uptake of incentives, states could set a deployment target (e.g., 15 percent of jet fuel dispensed at in-state airports must be SAF by 2030).

Going the Last Mile

States that have an interest in reducing their transportation pollution should waste no time in adopting ACC II and ACT, especially because the incentives in the IRA will make the EV sales targets easier to achieve. States that want to go further in reducing transportation pollution have a range of options they can pursue, including strategic federal funding allocation and targeted incentives for light-, medium-, and heavy-duty vehicles. There’s no shortage of technology, funding, or ideas to reduce states’ transportation pollution, and policymakers have many models and examples to look to. States have a critical role to play in the energy transition and in the uptake of federal funding, and if they’re willing to embrace solutions, they can go the last mile on solving transportation pollution.