OpenMarket: Automobiles and Roads

Evidence is mounting that mass transit played a major role in spreading COVID-19. According to analytics firm TrendMacro, the only factor “that seems to make a demonstrable difference [in the severity of outbreaks] is the intensity of mass-transit use.” This makes intuitive sense. Mass transit places people in close proximity in confined spaces, often for long-ish periods of time.

Last Friday, President Trump nationalized General Motors, ordering the company to produce as many ventilators as HHS Secretary Alex Azar says is necessary to address the coronavirus crisis. Bluster from the White House doesn’t magically retool factories and retrain workers. Worse, meddling from administration bureaucrats far outside their depth may depress and delay production.

As we enter a new era of slapdash bailouts driven by a dangerous mix of panic, ignorance, and opportunism, we face a growing list of bad policy ideas. One particularly bad idea is attempting to address immediate cash flow and near-term solvency issues through costly and slow transportation infrastructure spending.

Eleven Northeast states plus the District of Columbia on December 17th released a draft memorandum of understanding this week on how to implement their Transportation and Climate Initiative (or TCI). The draft memo lays out a framework for creating a “cap-and-invest” system to cut greenhouse gas emissions from the transportation sector.

In what amounts to the tax component of the Green New Deal, the House Ways and Means Committee released a draft of its “Growing Renewable Energy and Efficiency Now (GREEN) Act” (summary available here). This draft contains tax credits for a long list of alternative energy-related technologies unable to compete otherwise.  

On November 10th, longtime CEI friend Shirley Ybarra passed away. Shirley was an accomplished transportation economist and a leading thinker on innovative transportation infrastructure finance and operations. But even more importantly, she put these ideas into practice during her long career in public service.

It is not unusual for Congress to keep extending a supposedly temporary federal program, and that includes the tax credits for electric vehicles and wind and solar electric generation. For this reason, the Competitive Enterprise Institute opposed the 2015 tax extenders legislation despite several members’ insistence that it would be the last such extension, and that these provisions would sunset after a few more years.

Will the Trump administration’s auto rule harm public health? That’s what all five majority witnesses and several Democratic members of the House Oversight Environment Subcommittee claimed at a recent hearing on the administration’s Safer Affordable Fuel-Efficient (SAFE) Vehicles rule.  

It’s the ultimate dealmaker versus the ultimate dealmaking challenge. President Trump has again sought changes to the Renewable Fuel Standard (RFS) that he hopes both supporters and critics of this program can live with. The previous reform effort granted ethanol producers and corn growers their request to raise the amount of ethanol allowed year-round in gasoline from 10 to 15 percent (E-15), while, on the other hand, giving the refining sector more exemptions for small facilities which serves to lower the overall RFS targets.   

The Federal Highway Administration announced it will rescind its World War I-era regulation governing the use of patented and proprietary materials in federal-aid highway projects. We are glad FHWA agreed with us and other commenters urging for a clean rescission of this obsolete regulation. Going forward, we expect state departments of transportation to be better positioned in modernizing their highways for a 21st century of self-driving cars and other novel beneficial road transportation technologies currently under development.