This year, the federal government will release its zero-emissions vehicle strategy, one of the most anticipated and consequential proposals in the Pan-Canadian Framework on Clean Growth and Climate Change. The forthcoming strategy will guide governments over the next decade, but there is a risk that it may not adequately address two fundamental disruptions: the advent of autonomous vehicles and the rise of ride-sharing services.
Canada is facing a major transformation in transportation: electric vehicles are decreasing in price, companies are investing in self-driving cars and people are choosing to rent time in a vehicle rather than own one. Yet federal policy still lags far behind.
To bring the country up to speed, a group of Action Canada Fellows with the Public Policy Forum investigated policies to reduce greenhouse gas (GHG) emissions in a world of electric, autonomous and shared vehicles. Over the last year, our group travelled across the country to interview experts, host public engagement sessions and visit diverse communities impacted by the low-carbon energy transition. Through this process, we developed key recommendations for the government of Canada and its provincial and territorial counterparts.
The results of this study, outlined in our recent report, found that emissions from transportation could increase, even under a zero-emissions vehicle strategy. The reason: adoption of electric vehicles is just one part of reducing emissions. Government also needs to consider how human behaviour will shape Canada’s low-carbon future. After all, the only true zero-emissions vehicle is one that is not driving.
To that end, emissions from transportation can be reduced only if three variables are managed together: fuel choice, vehicle efficiency and user behaviour (see figure). For instance, electric vehicles use a lower-emitting fuel source, but owners of electric vehicles report an increase in the number of trips due to reduced operating costs, potentially resulting in an increase in overall emissions. This trend could increase dramatically in a future where autonomous vehicles (AVs) travel long distances for personal use without any passengers.
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Nothing should be off the table in devising a forward-thinking strategy for zero-emissions vehicles. Current reports suggest, however, that the federal government is mainly focused on incentives for electric vehicle adoption. While such policies are needed to increase supply, it will also be critical to shape consumer demand, especially in a world of self-driving cars. In fact, autonomous vehicles could be the driving force for the widespread adoption of electric vehicles because they are more cost-efficient and user-friendly if built on electric technology. Recently, the Senate issued a report with recommendations on how to prepare for this future, but it failed to highlight the potential environmental impacts.
To fill this gap, our research group examined policies to reduce emissions from autonomous vehicles. In our report, we outline significant risks in the deployment of self-driving cars that may jeopardize emissions reductions achieved by other government policies. Since autonomous vehicles are expected to operate at a significantly lower cost than today’s vehicles, it is likely that self-driving vehicles will spend a large portion of their time on the road without any passengers, contributing to greater emissions in the process. Evidence has shown that the convenience and affordability of ride-sharing platforms such as Uber are already increasing the number of trips by car, both by generating new trips and by causing people to switch from public transit. If you thought Uber took cities by surprise, just imagine the disruption of self-driving vehicles.
Canada cannot afford to wait. Consequently, we propose two policy options to proactively manage autonomous vehicle occupancy in a way that reduces emissions and maintains government revenue.
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Option 1: Clear operating standards for AVs
We recommend that all levels of government develop standards regulating autonomous vehicle use to mitigate the risk of increased travel and congestion. Depending on the local context, these standards could include:
- requirements to integrate routing with major public transit lines to support, rather than displace, transit use
- geographic restrictions on low-occupancy use in high-traffic areas
- time-of-use restrictions such as occupancy minimums at rush hour
In addition to locally implemented standards, the federal government should establish national standards for provincial highways to manage congestion and encourage efficient use of existing transportation infrastructure between cities.
Option 2: Encourage higher vehicle occupancy
We recommend a market-driven approach to specifically encourage higher vehicle occupancy in an automated-vehicle world. Using a mechanism similar to a carbon tax, governments could apply an additional distance-based levy to vehicles travelling with zero or few occupants for more than a set portion of their trip. This additional cost would provide a direct incentive for people to share rides and for ride-sharing platforms (such as Uber Pool) to design and price their services attractively for higher occupancy. This policy option could be an appropriate mechanism for targeting individual autonomous vehicle owners or a vehicle fleet. Revenues from this tax could then be applied directly to services designed to reduce congestion and emissions, such as public transit or cycling infrastructure.
Either of these policy options would significantly increase autonomous vehicle carpooling and deter low-occupancy rides. Rather than simply restricting undesired behaviour, we suggest, providing financial incentives for improved performance is also necessary.
Ultimately, any zero-emissions vehicle strategy that aims to incentivize electric vehicles needs to account for the rise of self-driving vehicles. With a comprehensive strategy for electric, autonomous and shared vehicles, Canada may be able to achieve many important outcomes: attainment of our Paris Agreement targets, improved personal mobility and productivity, better transportation safety and healthier lives. This possible future is within Canada’s reach.
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