A recent study indicates that the U.S. government’s initiative to boost energy efficiency in heavy-duty trucks could shift more freight transportation from rail to truck, potentially undermining the efficacy of these policies by 20%.
The speed of deliveries in the U.S. is at an all-time high, but this rapid transit is hindering the nation’s climate efforts.
Published on July 18 in the journal Nature Energy, a study by researchers from CU Boulder and their collaborators reveals that federal rules designed to improve heavy-duty trucks’ energy efficiency might be 20% less effective than originally thought.
The reason behind this is that these regulations lower the cost of trucking. Consequently, more shippers may choose trucks, which are less energy-efficient, over the more energy-efficient rail options.
“We were surprised to discover how significantly shipping behavior influences our overall energy consumption,” noted Jonathan Hughes, the study’s lead author and a professor in CU Boulder’s Department of Economics. “Improving vehicle energy efficiency comes with high expenses for manufacturers, so determining the realistic benefits from these costly regulations is crucial.”
The rebound effect
In economic terms, the rebound effect refers to increased consumption resulting from enhancements in efficiency and declines in costs.
For instance, when air conditioning units are more expensive to run than fans, most people will prefer using fans. However, if air conditioners become more energy-efficient and cheaper to operate, more individuals may switch to using them, ultimately raising overall energy use.
Hughes and his team aimed to analyze how pronounced the rebound effect is within the freight industry.
“When we consider the challenges associated with energy consumption and climate change, freight transportation emerges as a critical sector that has not garnered adequate attention,” stated Hughes.
The freight sector, which encompasses the movement of goods by truck, rail, ship, and air, accounts for about 10% of the total energy used in the U.S. Additionally, freight transport is responsible for 27% of the country’s greenhouse gas (GHG) emissions, making transportation the largest contributor to U.S. emissions.
Trucking is responsible for the bulk of emissions in this sector, which has seen a 76% rise in GHG emissions since 1990.
To mitigate emissions and avert severe impacts from climate change, the U.S. Environmental Protection Agency (EPA) has initiated a series of regulations since 2011 aimed at enhancing energy efficiency in heavy-duty vehicles. These regulations enforce improvements in fuel economy for newly manufactured trucks, ensuring they consume less fuel and produce fewer GHG emissions.
In March, the EPA introduced the strictest fuel economy standards to date, with the goal of preventing 1 billion metric tons of GHG emissions by 2055.
While these regulations make trucking more fuel-efficient, they also diminish transportation costs, encouraging many shippers to favor trucks over rail. This switch occurs because trucks typically reach their destinations more swiftly, facilitating quicker sales. Notably, trucks consume considerably more fuel than rail for transporting equivalent amounts of goods over the same distance.
Unintended consequences
Hughes and his collaborator, James Bushnell from the University of California at Davis, utilized newly available data on goods movement from the U.S. Census Bureau to analyze the rebound effect in the freight sector. They conducted computer simulations to gauge the potential energy savings if the EPA regulations resulted in a 5% boost in new trucks’ fuel efficiency, which aligns with the current standards.
The findings indicated that these regulations could initially save 674 million gallons of gasoline annually. However, after incorporating the anticipated rise in truck shipments due to the rebound effect, the actual savings would decrease to 497 million gallons—still a significant quantity, yet 26% less than earlier forecasts.
Certain industries, such as chemicals, animal feed, alcohol, and petroleum, are particularly impacted by fuel cost reductions and would experience the most significant rebound effects, according to Hughes.
The analysis estimated that the overall rebound effect throughout all freight transport modes could diminish total fuel savings from federal regulations by 20%.
“Our findings suggest that enhancing transportation efficiency, whether through improved energy use or automation that cuts labor costs, might lead to greater energy consumption than projected,” Hughes explained.
Though the focus of the paper was on freight, Hughes indicated that a similar rebound effect could be present in the retail sector, which includes companies like Amazon.
“These cost-reducing regulations certainly benefit consumers by allowing for lower prices. However, our study indicates that these measures may paradoxically hinder progress toward our climate and energy objectives,” Hughes remarked.
Hughes believes that increasing fuel prices and making transportation more expensive through initiatives like carbon emission taxes would be a more impactful strategy for cutting energy use in transport. Nevertheless, such policies often struggle to gain political backing.
“This study emphasizes the necessity of comprehensively understanding the potential impacts of these regulations to prevent unintentional negative outcomes,” he concluded.
