Today, Transportation Secretary Ray LaHood announced a big move toward putting transit on a more level playing field in federal transportation funding decisions, while encouraging communities to work to maximize the "livability" benefits of transit investments. This would be a significant change in federal transit policy, helping many communities around the U.S. to initiate new transit projects, while improving the way that these projects are planned, designed, and built, with an eye toward environmental benefits.

For years, sustainable transportation advocates have highlighted how public transit is put at a distinct disadvantage in federal transportation funding decisions.  Public transit projects receive only 50 cents on the dollar in federal matching funds, compared to 80 cents of federal money for highway projects.  

Adding insult to injury, proposals for public transportation projects must also clear a series of high bureaucratic hurdles.  Among the most vexing is a "cost-effectiveness" thresh hold that is used as the primary consideration in making project funding decisions.  No similar standards - or many standards at all, beyond safety, really - exists for road and highway proposals.

Cost-effectiveness basically works like this. The reduction time savings for transit users that would result from the proposed project are divided into  its cost.  Only those projects that show significant time savings move forward. While such time savings and congestion relief are certainly important considerations in transit decisions, they are only a small piece of the puzzle.

The many other benefits transit investments bring to local communities are all but ignored. I helped to write a report on these "co-benefits" with the Center for Clean Air Policy last year.  The case studies presented very clearly illustrate the real benefits that accrue to communities that choose to invest in public transit.

Sec. LaHood's announcement formally begins the process of figuring out how to count these benefits in a fair way, and incorporating them into funding decisions.  This means that transit proposals will no longer seek to arbitrarily reduce travel times (often by limiting intermediate stations or choosing less-than-ideal routes that limit other benefits) or cut costs (by eliminating important design features that can better integrate a project into that community or make it more accessible and convenient for passengers) just to improve its chances of receiving federal support. 

Rather, communities can design projects to maximize environmental benefits, convenience to riders, and local economic development potential to increase the chances of federal support.  The ultimate outcome will be better transit projects that serve communities and riders more effectively while enhancing the local economic, social, and environmental co-benefits.

Congress seems just as eager to do its part to move toward better times, as it ramps up to kick off the new decade with a big jobs initiative . Building on one of the successful pieces of the Recovery Act, the initiative will likely invest significantly in transportation projects.

Transportation for America co-founder Smart Growth America has done great work showing the benefits of clean transportation to a robust American economy. They have taken a deep dive on the multipiers, co-benefits, and positive externalities that we can expect from federal investment in modern, efficient transportation, as well as a superb report on how the money is really being spent.

But charts and graphs only take us so far.  Nothing beats real world experience, in my book, and just such a story is taking place in California's Central Valley.

"SACRAMENTO, Calif., Dec 23 (Reuters) - The U.S.-based transport arm of Siemens AG has ramped up production to feed growing demand for urban light-rail systems and also has its eyes on a nascent U.S. push for high-speed rail...  [The Siemens] plant just outside Sacramento, California, which produced about 25 light-rail cars annually five years ago, made 58 this year and is set to build about 200 more over the next three years -- with capacity for more."

The demand for clean transportation projects is out there, and it's growing.  However, a smarter transportation policy - one that can improve mobility, make transportation more affordable, cut pollution, and reduce traffic - can't be cobbled together through jobs legislation and stimulus packages.

The article goes on to say:

"A major obstacle to light-rail growth, however, was a lack of coordination between municipal and state authorities when tackling transport problems..."

Major businesses are looking to invest in U.S. infrastructure.  This will create jobs here at home, improve our communities, and help us cut dependence on oil. But we need Congress to move our outdated transportation system into the 21st Century. If we do, we can fill those factories in Modesto, and more around the country, with workers building the wheels of the clean energy economy.

As much as we must pass transportation legislation that focuses on energy and climate change, we must also pass climate and energy legislation that focuses on transportation. And the Kerry-Boxer Clean Energy Jobs bill does just that.

The transportation sector represents nearly two-thirds of US oil consumption, and a third of US carbon emissions, and the Clean Energy Jobs bill zeros in on this growing source of emissions.

The legislation begins by having EPA and DOT set national targets for reducing GHG emissions from the transportation sector. It then sets up a framework under which states and large metropolitan regions would begin to plan for transportation emissions reductions, and monitor their progress over time. Setting targets and developing strategies to reach these targets will allow states and regions to integrate climate and energy concerns into their transportation plans in a way that is both flexible and prioritizes the most effective projects.

The bill would also assist states and regions by offering them a new set of tools, including state-of-the-art transportation and emissions models, standard methods for assessing transportation carbon, and improved and expanded data.

Perhaps more importantly, the bill would give states and regions access to new federal grants - totaling up to $1.5 billion each year - to assist them in developing and implementing low-carbon transportation plans. These grants represent direct investment in our communities that will create jobs, stimulate local economic development, and improve local transportation options, all while cutting emissions.

Along with other provisions that invest in more efficient clean cars and new sustainable transportation fuels, the Kerry-Boxer bill takes a big step forward on transportation.  While the next big step must be taken in the federal transportation bill, Kerry-Boxer's passage will jumpstart a more efficient and affordable transportation network that will become the wheels of America's Clean Energy Economy.

Yesterday, the New York Times' Tom Friedman proposed a gas tax hike as well, to help reduce oil consumption. As an outspoken opponent of action on climate change, the Chamber and Friedman might seem like strange bedfellows.  But each only get half of the transportation policy equation right.

On one hand, ATM's call for greater investment in the transportation system should be heeded. Compared to other wealthy nations, the U.S. invests relatively little in transportation, as a percentage of GDP. On the other hand, America can't afford to ignore Friedman's call to arms on energy and climate security. 

Fortunately, we can accomplish both, if we take the chorus of calls to reform our transportation policy seriously. A federal commission, the state departments of transportation, and several respected transportation policy groups, including the Bipartisan Policy Center, and Transportation for America, have each noted that our transportation policy must be fundamentally reformed. If we fail to see such reform, any increased investment in our broken transportation program would be throwing good money after bad.

The connection between energy, climate, and transportation is obvious. Of the 20 million barrels of oil America consumes each day, more than two-thirds of is used to fuel our cars and trucks. As Friedman has argued for years, meeting this demand for oil leaves America dependent on other nations, making us less secure. Meanwhile, our oil-fueled transportation system accounts for nearly a third of our total global warming pollution.

To get to both halves of the transportation policy equation, we need to increase investment in transportation in a way that also promotes our energy and climate security. A comprehensive new study sponsored by NRDC, Moving Cooler, shows exactly how we can cut oil use and greenhouse gases from while investing in transportation to benefit our communities, enhance efficient mobility and increase convenience. (See our Moving Cooler factsheet)

The report finds that we could cut transportation emissions up to 24 percent by 2050 and reduce oil use by 1.81 million barrels a day by 2050-more than we now import from Saudi Arabia each day. What's more, as a result of the policies studies in Moving Cooler, consumers would save an average of $72 billion annually--nearly twice what the federal government spends on transportation each year.

Meanwhile, we'd be investing billions more in clean transportation: public transit and livable communities to make travel more convenient; freight rail and intermodal facilities to move goods more efficiently; intelligent transportation systems and other road improvements to provide congestion relief.

Less congestion, more convenience. Less pollution, more performance.

Until we have a smarter transportation program that delivers for our communities, our economy, and our energy and climate security, maybe Friedman's proposal for investing gas tax revenue - deficit reduction, health care, and tax credits - isn't such a bad idea.  At least we might be getting our money's worth...

Coincidently, yesterday, Friedman played golf with Obama and Transportation Secretary Ray LaHood yesterday. (I wonder what they talked about...)

Friedman makes some good points about the need to have a clear price on carbon in the transportation sector. As analysis in our recently-released report Moving Cooler shows, a price signal can be one of the most effective ways to reduce emissions in the transportation sector, especially when paired with investments in clean transportation alternatives, congestion reduction, and other measures. 

We don't even need to go to $1 per gallon. A price signal of as little as $0.82 per gallon - equal to a 3 cent per mile increase - could cut transportation emissions by 3.3 billion metric tons by 2050 - equivalent to 7.7 billion barrels of oil.

However, Friedman's recommendations for how to spend the revenue from such a price signal miss the mark:

...a $1 tax on gasoline and diesel fuel would raise about $140 billion a year. If I had that money, I'd devote 45 cents of each dollar to pay down the deficit and satisfy the debt hawks, 45 cents to pay for new health care and 10 cents to cushion the burden of such a tax on the poor and on those who need to drive long distances.

The uses Friedman identifies are certainly important, but is it really wise to divert this money out of the transportation sector?

Consider:

• Our transportation system desperately needs investment: The American Society of Civil Engineers has calculated that our dirty, aging transportation system needs more than 1.2 trillion dollars in new investment over the next 5 years.
• Our transportation system is getting dirtier: Between 1990 and 2006, growth in U.S. transportation greenhouse gas (GHG) emissions represented almost one-half (47 percent) of the increase in total U.S. GHGs, according to EPA.
• Clean transportation creates green jobs: A study from the University of Massachusetts, Amherst found that climate-friendly transportation investments such as public transportation projects or repair and maintenance of existing roadways created more jobs per dollar of investment than new highway building, which can increase transportation emissions.
• Clean transportation boosts local economies: Leading local economic indicators - income levels, private investment, local GDP and tax revenue, commercial vacancy rates, etc. - often significantly improve after efforts to increase livability, including development of clean transportation facilities, according to 8 community case studies from around the country.
• Clean transportation boosts housing prices: Homes in livable communities, especially those nearby to transit, have held their value as the housing market has plummeted. One study found that homes in walkable neighborhoods commanded a $700-$3,000 price premium, controlling for proximity to city center, housing size, and income level.

Friedman's investment scenario neglects to consider that these items are a critical use of transportation fuel taxes, which have not been increased since 1994. 

Moreover, as Moving Cooler makes clear, substantial GHG emissions reductions are available in the transportation sector.  While most of the emissions reduction strategies studied in Moving Cooler would yield substantial consumer savings - $671.7 billion per year in the scenario above - they all require up front investment.

I can think of no better way to invest the revenue from Friedman's gas tax than clean transportation projects that will boost our nation's mobility, make our transportation system cleaner, create millions of green jobs, boost local economies, and stabilize housing prices.  That's truly a win, win, win, win, win.