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Technology Vs. Land Use: Alternative Strategies To Reduce Auto-related Air Pollution

by Chang-Hee Christine Bae
Department of Urban Design and Planning, College of Architecture and Urban Planning
University of Washington
Seattle WA, 98195


This paper evaluates the relative importance of land use changes versus technological solutions to reducing transport-related air pollution. It suggests that land use approaches have very little prospects of reducing emissions compared to technology. The ZEV (zero emissions vehicle) mandate was the wrong route to take, primarily because of the failure to solve the battery (hence the range) problem. However, it may have stimulated the automobile companies to focus their R & D more on alternative fuel vehicles. As a result, there are two hybrid (gasoline-electric) vehicles on the U.S. market in the year 2000, the Honda Insight and the Toyota Prius, with more to follow. In addition, SULEVS, such as the special versions of the Honda Accord and the Nissan Sentra-CA, are equally promising. These vehicles solve the range problem, and the power problem is getting close to solution. A key argument is that it may be easier to change vehicle preferences than residential location and dwelling type preferences, but incentives (e.g. emission fees on the popular SUVs) and other policy interventions may be needed.



    I. Introduction

    II. Auto-Related Pollution

    III. Promoting Transit Use

    IV. Land Use And Travel Behavior

    V. Ridesharing

    VI. Raising Fuel Taxes

    VII. Trucks And Diesel

    VIII. Emissions Technology

    IX. Alternative Fuel Vehicles

    X. Changing Tastes And Preferences

    XI. Conclusions



I. Introduction

Planners have a natural tendency to believe that they can alleviate a wide range of economic and social problems via planning interventions, especially by land use policies. This belief is what attracted most of them into the planning field in the first place. A good example is the current debate about "smart growth," promoted as a means of simultaneously addressing the problems of the inner cities, spatial injustice and the evils of suburban sprawl. In this paper, I focus on a much narrower, if not totally unrelated problem: the potential for changes in land use (and associated changes in travel behavior) to reduce automobile-related air pollution. I compare this policy with alternative approaches, such as improvements in emissions technology and the development of alternative fuel vehicles. It is tempting in such an analysis to adopt a balanced, safe position: we need all the strategies available. I wish to argue that for this particular problem, this is not the case. On the one hand, land use options will not work: the settlement pattern can only be changed at the margin; in any event, land use changes take a very long time to implement; and, even if implemented, they would have negligible effects on vehicle miles traveled (VMT). On the other hand, we do not have to be confirmed "technological optimists" to believe that we are on the verge of major technological advances, now completely predictable, that will dramatically reduce automobile-related emissions. Because the land use prescriptions (especially in view of the vast but still growing literature on sprawl) are very familiar even to laypersons, I will give more attention to the technological issues (but from the perspective of a transportation/environmental planner rather than that of an automotive technology engineer).

II. Auto-Related Pollution

The air pollution problem in many U.S. metropolitan areas is quite serious. An increasing number of them are out of compliance with the Federal clean air standards mandated under the Clean Air Acts of 1970, 1977 and 1990. A significant proportion of air pollution (averaging close to 60 percent, and as high as 88 percent for carbon monoxides) is accounted for by automobile emissions (and the indirect repercussions of automobile use such as PM10 [particulate matter of less than 10 micrometers in diameter emissions associated with highway construction, paved road dust, tire friction, etc.]).1 Yet in Los Angeles, the long-term national leader in air pollution especially with respect to ozone2, there have been major declines in automobile emissions since the mid-1970s when California's emission control mandates first began. In some other metropolitan areas, air quality has deteriorated because the effects of rapid population and employment growth and soaring VMT have not been dampened by California-level emission controls.

III. Promoting Transit Use

Policymakers persist in attempts to promote transit as a means of reducing automobile use and its attendant problems, including air pollution. In general, such attempts have been unproductive (Pickrell, 1992; Kain, 1991; Gomez-Ibanez, 1985; Richmond, 1998). The long-term trend in transit ridership has been flat and has declined significantly since 1990, despite decades of huge Federal and State subsidies. Arguments that eliminating subsidies to automobiles would change the modal split more in favor of transit are unconvincing because the price elasticity of demand for auto use remains low (Ingram and Liu, 1999), even in the long run. Where transit ridership has remained relatively stable, the explanation has been a demand from people without cars (e.g. working immigrant women in one-car households) rather than trip diversion from automobiles. Paradoxically, transit ridership has dropped even in the new rail cities; the reason is that the huge costs of building and expanding rail lines have cannibalized the bus system so that the modest expansion in rail ridership has been swamped by a more dramatic decline in bus ridership as services are cut. The costs of rail systems (capital costs often several times initial projections and high operating and maintenance costs) are difficult to justify: "Oft-quoted gross ridership figures for light rail may seem impressive. Total systems perspectives are however needed to make us realize that the total impact on public transit ridership is not only slight but that equal or better results can be obtained from relatively minor adjustments of fare levels and low cost improvements to existing bus services" (Richmond, 1998, p. 95).

IV. Land Use And Travel Behavior

Given these facts, and reflecting the long-established interdependence between transportation and land use, some transportation planners have argued that the most effective way to stimulate transit is to reorganize land uses, moving them towards higher densities. Densification in itself does not reduce air pollution (in fact, the opposite; O'Toole, 1999) unless it changes modal choice and/or travel behavior. Downs (1992, p. 84) refers to a simulation where a tripling of suburban/exurban densities was required to reduce suburban/exurban commuting distances by 5 percent. The reason is that current settlement patterns, i.e. the dispersion of both workplaces and residences, allow for a high degree of accessibility even in low-density environments because of the wide choice of locations offered to both firms and households. Newman and Kenworthy (1989, 1990) were the pioneers of the "increasing density will reduce automobile use" (and hence air pollution) argument. Leaving aside their spurious statistical relationship between density (population per acre) and gasoline use per capita,3 even if there is a relationship between density and a non-per-capita variable (e.g. percentage of trips by automobiles), there is a difference between long-established high-density urban settlement patterns and incremental adjustments to an already decentralized low-density environment.4 First, America cannot become Europe. Most of the urban capital stock is in place and is so durable that changes are not easily made, except at the margin (especially the spatial margin). Second, even European countries are complaining about automobile dependence, and transit use has declined in the majority of European cities (OECD, 1995). Even if higher densities can be created at the local level (e.g. via building New Urbanist settlements), Crane (1996) has demonstrated that the results in terms of the impact on automobile travel are indeterminate, perhaps resulting in more, if shorter, trips. Automobile travel is more likely to increase the more elastic is the price-elasticity of trip demand, the stronger is the income elasticity of demand for auto travel, and the more positive the cross-price-elasticity of demand for car trips. The hoped for outcomes of the new land-use-design protagonists require more compact land uses to result in both a modal shift from cars to other modes (e.g. walking) and a reduction in new car trips (zero or low own-price elasticity). Even in the cases where total automobile travel is reduced because any increase in trip frequency is more than offset by shorter trips, air pollution may nevertheless increase because more cold starts and hot soaks outweigh less trip-length-related emissions (Guensler and Sperling, 1993).

The other, more ambitious idea is to integrate both land use changes and transit investments in the same project, via the promotion of Transit-Oriented Developments (TODs). There are very few successful examples of this approach in the United States. TODs take a long time to implement, perhaps 15 years or more (Boarnet and Compin, 1999). As a generalization, they are much more likely to be effective on new greenfield station sites (e.g. the Pleasant Hill BART station in California; Bernick and Cervero, 1997) than at close-in, already developed locations where land assembly is difficult, redevelopment costs may be prohibitive and community opposition is both vocal and obstructionist (Deakin and Chang, 1992). The dilemma is that these problems are more likely to occur along high-density growth corridors where the prospects for attracting riders are highest. Even so, the residential developments around transit stations tend to attract existing transit users rather than former commuter drivers.

A more modest expression of the same idea is to simultaneously promote higher densities and improved "connectivity," presumably encouraging more non-auto trips. Microstudies have suggested that this strategy might reduce VMT, but there is no evidence that it cuts down on the number of automobile trips. Unless this happens, the impact on air quality will be negligible.

V. Ridesharing

At one time, there was a high degree of confidence that ridesharing measures would make a noticeable difference to the number of vehicles on the road and total VMT. This confidence has largely dissipated. Carpooling has declined nationally (according to both major sources, 1980 and 1990 Census data and 1983 through 1995 Nationwide Personal Transportation Study data). Many States have focused on building HOV (high occupancy vehicle) lanes as a major component of their highway construction projects. Yet because of underutilization, New Jersey has converted some HOV lanes back to solo driver use, and other jurisdictions are considering similar steps.

A major debate is whether ridesharing can be boosted via mandates. The pioneering move in this direction was the South Coast Air Quality Management District's (AQMD) Regulation XV in metropolitan Los Angeles, introduced in 1988, which became the model for the ETRPs (Employee Trip Reduction Programs) adopted in the wake of the Intermodal Surface and Transportation Efficiency Act (ISTEA) of 1991. The key idea of Regulation XV was to require firms with more than 100 employees to implement ridesharing programs that would raise employee-vehicle ratios to 1.5 from their initial 1988 level of 1.15. The program must be deemed a failure. In the first year of operation, the average employee-vehicle ratio increased by only 2.7 percent (Giuliano, Hwang and Wachs, 1992), not very much given that those with favorable workplace and residence locations and times are likely to join first; ridesharing programs experience a diminishing marginal response, and not surprisingly any subsequent gains were minimal. In addition, dropout rates from carppoling programs are consistently very high. The Regulation XV program was very expensive, about $3,000 for each vehicle eliminated (Lane, 1993), three times as high as clunker retirement programs (typically, retiring a clunker will eliminate ten times as much pollution as getting a newer vehicle off the road). In view of the unpopularity of the program, its high costs, and shift in the AQMD policies to a more business-friendly stance, the regulation was put on hold in 1994 and has since been abandoned, although Regulation XV did trigger the introduction of ETRPs elsewhere in the US, primarily as part of the implementaion of ISTEA (the Intermodal Surface transportation and Efficiency Act of 1991).

VI. Raising Fuel Taxes

This is a strategy that has been relatively effective in some European countries (e.g. Italy), resulting in lower annual VMT per vehicle and a shift towards more fuel-efficient vehicles (OECD, 1995). There is considerable scope for similar action in the United States, especially in view of the shift in recent years towards high-powered vehicles such as SUVs and trucks. However, this scope is more theoretical than practical. Even if the long-run price elasticity of demand is higher than the evidence suggests, the prospects for a significant increase in the Federal fuel tax are very bleak in a political environment of opposition to higher taxes. Voting for an increase in the fuel tax sufficient to have a major dampening effect on VMT growth and/or fuel consumption would probably be an act of political suicide, even if the revenues were protected for transportation projects. Whether recent market-driven price increases will affect travel behavior remains to be seen.

VII. Trucks And Diesel

The role of diesel in clean air policy is complex. A significant proportion of transportation-related pollution is the result of diesel-powered trucks (in California trucks account for 54 percent of diesel exhaust, followed by 19 percent for construction equipment, 10 percent for ships and boats, and 7 percent for farm equipment). On the other hand, diesel is more energy efficient than gasoline, primarily because of direct combustion via pressure; hence, a 20-30 percent higher fuel economy more than compensates for a 5-10 percent higher carbon content. As a result, total CO2 emissions would be lower with the equivalent diesel fleet. The downside is higher NOx and PM emissions, especially accentuated by diesel vehicles in high-density cities with narrower streets (creating health-damaging "chimney effects"). Nevertheless, diesel cars are making substantial progress in Europe because of their better fuel efficiency, lower fuel taxes on diesel than gasoline, and a greater concern with CO2 than with air pollutants. Also, there has been much less research on cleaning up diesel engines (because of their much smaller market share, at least of passenger cars), but there are significant possibilities. These include cleaner diesel fuel,5 particulate filters, lean-burn catalytic converters that work with diesels, and improved fuel-injection systems (UN IPCC, 1996).

There is an alternative that pollutes half as much, natural gas. A few businesses such as Ace Hardware and United Parcel Services use natural gas vehicles extensively. But they are more appropriate for local deliveries that involve a small enough daily VMT that the vehicles can be refueled at the home base overnight, given the sparse coverage of natural gas refueling stations. Their market penetration remains very modest; the Cummings Engine Co. stopped production of its liquefied natural gas truck engine in Spring 1999, after a short-term experiment of less than three years that resulted in a total of 4,000 sales compared with its 300,000 annual diesel sales (Cone, 1999a). About one-quarter of the trucking fleet makes local hauls, and could theoretically switch to natural gas, but the cost is prohibitive (about $30,000 more per vehicle; the differential with buses is even wider6). The natural gas engines are much more expensive and could increase trucking costs by up to 16 percent (if all the truck fleet were to be converted, it would amount to an annual cost of $2 billion). Fuel-cell heavy-duty commercial vehicles are in their embryonic stage; the few experimental vehicles in place (e.g. three buses in Chicago) cost 5-6 times as much as conventional vehicles. Another possibility is a new fuel (named Fischer-Tropsch), a sulfur-free liquid made from natural gas that can be burned in standard diesel engines (it compares with natural gas engines, approximately 50 percent of diesel emissions), but it costs about one-quarter more than diesel.

The problem with diesel engines is not only that they emit more NOx than gasoline or other fuels (thereby contributing to more smog in areas such as Los Angeles) but also, and more important, emit significant amount of soot particles (a truck emits the PM equivalent of 150 cars).7 It is generally recognized that PM is the most dangerous type of air pollutant from the key perspective of human health. A State of California panel estimated that 14,000 of California's population could die from the effects of diesel exhaust (although the link between exposure to diesel exhaust fumes and cancer risk remains somewhat controversial), not to mention lesser effects on asthma, hay fever and other allergy victims (Cone, 1999b). About 71 percent of the cancer risk from air pollution are because of diesel emissions. The risks vary by location, being much higher (by a factor of two) close to freeways.

The diesel risks explain why the Southern California AQMD (Air Quality Management District) is implementing a new rule to compel public fleets to abandon diesel by imposing emissions standards equivalent to methanol emissions, and has recently advanced the compliance date by two years. In October 2000, AQMD passed a regulatory measure that would require 60 government agencies operating 6,900 heavy-duty trucks in the district to begin purchasing cleaner fuel vehicles in July 2002, a replacement program expected to be stretched out over 4-10 years. The compliance costs are estimated to cost up to $150 million over a 13-year period. However, this will hardly make a dent in the diesel problem, because the public truck fleets are only a tiny fraction of the region's 57,000 trucks based in the region, not to mention the one million or more interstate trucks that pass in and out of Southern California. In April 2001 AQMD also passed a measure mandating the purchase of natural gas rather than diesel school buses, and promised to try to find funding to help school districts. Without funds, soot traps will be required, capturing 85 percent of the emissions. This is the first program of its kind in the country. There are about 8,800 school buses in the region (2,600 in the Los Angeles United School District), and it is expected that 3,360 could be replaced by 2007. This year AQMD has allocated $27 million for new buses and $14 million for natural gas refueling stations. Natural gas buses are more costly. Full implementation would result in eliminating 96 tons of NOx and soot annually. 70 percent of California's school buses are diesel, many of them without pollution controls. Children on school buses consume 4 times more diesel fumes than car drivers or pedestrians and 9 times more than the typical resident. Improved diesel engines produce 25 percent less NOx and much less soot than the standard engine; natural gas engines are even better (with two-thirds of the NOx emissions of the improved diesel engines).

In spite of these problems, sophisticated electronics have made more recent diesel trucks much cleaner. Unfortunately, their impact is very slow to take effect because of the slow replacement of the diesel truck fleet (the typical truck is on the road for at least 20 years). Nevertheless, particulate emissions from diesels are anticipated to decline by 29 percent in California between 1995 and 2005 and NOx emissions by 15 percent (California Air Resources Board data) as the newer vehicles are cycled in (both diesel PM and NOx emissions peaked in 1990 at 48 and 13 percent higher than at the 1995 level). The 2002 standards for trucks and buses (e.g. approximately a halving of the NOx emissions) and the 2008 standards for tractors and construction equipment will accelerate the trend.

On Dec 21, 2000, the Federal government approved regulations to cut diesel fumes from trucks and buses by 95 percent. These vehicles are a main source of ozone and PM-10. The rules have to be introduced by 2006, eliminating 3 million tons of emissions (equivalent to getting 13 million trucks off the road). Added cost estimates range from 4 cents (EPA) to 15 cents (industry) per gallon. Surprisingly, the regulations are supported by the California Trucking Association because it levels the playing field between California and the rest of the U.S. Addressing the diesel problem has lagged, although it has picked up with the increasing realization of its dangers; it escaped for 25 or more years. As suggested above, the long life of diesel engines makes the transition difficult (the full effect may take 30 years). By June 2006, refiners must produce diesel fuel with no more than 15 parts of sulfur per million, a 97 percent reduction. Sulfur (although an air pollutant) is more of a threat to emission devices such particle traps and catalysts for diesel engines. As much as one-fifth of fuel can be high-sulfur until December 2009. New engine specifications require a 90 percent reduction in soot emissions and a 95 percent cut in NOx. 50 percent of engines must meet these standards in 2007, and the rest by 2010. The Chicago-based International Truck and Engine Co. already makes a "green diesel" engine that meets these standards. Estimated costs of the rules are $4.3 billion by 2030, and a cost per truck of$1,900; however, these costs are expected to be swamped by health benefits.

Recognizing the dangers of PM particles in diesel fuel, 14 States (including California) collaborated in November 2000 to introduce new rules in advance of EPA mandates. The proposals would slash emissions in California and New York alone by 27 tons a day. The incentive to act was stimulated by a loophole in the 1998 agreement between the EPA and the diesel motor producers allowing them to stop testing engines on-road in 2004 until new Federal rules kicked in by 2007. The action is symbolic, representing one of the first times that States have moved ahead of the Federal government. CARB predicted a cost increase of $700-800 on trucks costing between $52,000 and $108,000.

VIII. Emissions Technology

The most effective approach to reducing automobile-related pollution hitherto has been the imposition of emission controls and the associated advances in emissions technology. This explains why today's new vehicles emit only about four percent of the volume of pollutants emitted by cars before emission control mandates8 were introduced. It also provides the primary reason why air quality has improved dramatically in Los Angeles and some other California cities since the mid-1970s (in spite of a massive VMT increase). The recurrent tightening of emission controls has created a "moving target" that has stimulated improvements in engine design and emissions equipment.9 There is also much more that can be done in this area: continuing the strategy of ever tightening controls, especially to vehicles other than standard cars, e.g. trucks, pickups and SUVs; diffusion of California emission standards nationwide; and, above all, the commercialization of technologies that address the critical "cold start/hot soak" problem. Yet there is widespread agreement that these approaches are not a panacea.10 The continued increase in VMT implies that a more radical approach is needed, at least in the longer term. I believe that further technical development of gasoline/diesel-electric hybrid vehicles and SULEVs and their significant market penetration offers the best prospects that should bear fruit within the next decade.

IX. Alternative Fuel Vehicles

Whereas emissions-technology approaches focus on reducing tailpipe emissions from conventional ICE (internal combustion engine) vehicles (via improved emissions equipment, reformulated gasoline, prewarmed catalytic converters, etc.), the alternative fuel vehicles strategy emphasizes a more radical step, the replacement of gasoline by other fuels. Major options discussed in the literature include ethanol, methanol, compressed natural gas, hydrogen fuel cells, electricity, and gasoline (or diesel)-electricity hybrids. In this paper, I concentrate on the last two of these options. Ethanol, methanol and compressed natural gas reduce some types of automobile emissions but increase others, so they do not offer an acceptable solution to the air quality problem. Vehicles using these fuels do have some potential role, e.g. delivery fleets using compressed natural gas, but a modest one. The hydrogen fuel cell solution is a very long-term approach; there are difficult technical problems, especially with regard to safety, and there are no plans for an infastructure supply network. It is probably not a feasible choice for meeting near-term ZEV mandates, although Daimler-Chrysler have announced plans to have a full fuel cell Necar-4 vehicle in limited production by 2004 (ISATA Magazine, June 1999). However, although the concept car runs on liquid hydrogen, the production vehicle will probably be powered by methanol. Nevertheless, given the tendency for technological and cost containment timetables to slip, we are safer with limiting the discussion to the EV (electric vehicle) and hybrid options.

Alternative fuel vehicles stand or fall from a marketing perspective on four legs: power, range, price and convenience (especially trunk and passenger room). Progress in electric vehicles has stalled because of all four problems: too little power, very limited range, too expensive, and insufficient space. The hybrids offer better prospects. The two hybrids that reached the U.S. market in the year 2000, the Toyota Prius and the Honda Insight, have both solved the range problem, with a range far greater than the typical ICE vehicle. The power (especially the torque) of both the Prius and the Insight is less than inspiring, although the Insight gets to 60 mph at a respectable 10.6 seconds on a full charge. R & D specialists are working hard on the power problem via more efficient SPUs (Surge Power Units), aerodynamic improvements, and weight reduction via lightweight materials, etc. A small SPU instead of a battery stack can help to cope with the space problem. The hope is that the economies of scale of mass production could dramatically bring down the price.11 These prospects led the Wall Street Journal to predict the death of the ICE within 20-30 years.

It became clear that slow progress with battery technology development would undermine the market penetration of EVs when the California Air Resources Board (CARB) abandoned its 1998 ZEV mandate (a 2 percent share of total automobile sales in California from the leading seven automobile manufacturers) in 1996, although the more ambitious 2003 mandate (a 10 percent share) required 54,000 ZEVs to be sold (4 percent of the Big Seven's sales, after allowing for 6 percent SULEVs [super-ultra-low-emission] vehicles to be substituted for ZEVs). Achieving this goal would be highly problematic, and this might explain the 22,000 annual 2003 ZEV requirement voted on by CARB in September 2000. Even this is very ambitious, given that the number of electric cars on the road in California is not much more than 10 percent of the new 2003 target, and that the current world production of the Honda Insight (a car that does not even qualify for the ZEV mandate) is only 8,000 (one-half destined for the U.S.). However, other offsets are still being discussed so the 2003 mandate may be achievable via a variety of contributions.

Tests on four prototype electric vehicles (a Chevrolet S-10, a Ford Ranger, GM's EV1 and a Toyota RAV4) suggested poor acceleration (except for the EV1), very limited range (39-89 miles), modest maximum speeds (69-80 mph), and poor reliability (multiple battery failures; Francfort and O'Hara, 1999). The problem was aggravated by Honda's decision in April 1999 to stop production of its EV Plus electric car, and to switch its R & D focus to fuel cell technologies that provide on-board electric power.12 In more than three years, only about 300 EV Pluses had been leased (at a lease rate of about $450 a month), most of them to businesses or government agencies mandated to use low-emission vehicles. However, Toyota plans to continue with its RAV4 electric version; it has leased about 500 so far, with plans for another 1,000 in the next few years. General Motors was planning a Phase II version of its EV1 car, a vehicle notable for its acceleration characteristics (0-60 mph in 8 seconds) and its record low drag coefficient of 0.19 Cd (because of fewer cooling orifices and a smooth underside13); yet leases have averaged only about one per day, and in January 2000, after spending $350 million, GM cancelled production, at least temporarily. In total, less than 3,000 battery electric cars and trucks have been sold or leased since 1996, most of them in California. The prospects are even bleaker with the announcement (in April 1999) by Edison International to close its Edison EV subsidiary that had installed 250 charging stations in California and Arizona.

In any event, EVs have several major defects. First, at the national level, they are pollution-shifting (i.e. to power stations) rather than pollution reducing. Second, the pollution that is generated comes from the more dangerous pollutants, particulate matter (PM), sulfur oxides and CO2 (not covered by the Clean Air Acts). Electric hybrids offer the best chance of achieving the CO2 reductions promised at the Kyoto Agreement, although 25-30 percent of cars sold would have to be of this type, and probably many of them with diesel-turbo rather than gasoline engines. Third, EVs create new environmental problems, a serious battery disposal problem and the potential for more pollution from existing gas-powered vehicles, driven under more congested conditions because of the stimulus of lower EV operating costs to higher VMT. Fourth, there are safety problems related to accidents involving lead-acid battery stacks (whether safer batteries will eventually be available remains an open question. Fifth, the cost barrier (ranging from $5,000 to $21,000 a vehicle) is difficult to overcome, even if narrowed by learning curve effects and subsidies (e.g. cheap recharging units, off-peak electricity rates, leasing as a mechanism for reducing consumer resale risk, free maintenance, extended warranties, and free rental cars for weekend trips).

From all these facts, it appears as if the technology-forcing 1998 ZEV mandate pointed R & D in the wrong direction.14 Although the ZEV mandate was a performance standard (zero emissions), it was a de facto technological standard because only electric vehicle technology could achieve zero emissions. Obviously, a technological standard is much more restrictive than a performance standard because it limits R & D options. When the technology has not been developed, its costs are uncertain and its limitations are unknown. The rationale for technology-forcing standards in favor of a new, unknown technology is that i. however costly they turn out to be, these costs will eventually fall to acceptable levels; and ii. they resort to "stretch goals" to motivate and to stimulate creativity (Leone, 1999). Of course, stretch goals do not always work, e.g. ubiquitous nuclear power, cost-effective supersonic aircraft, and now perhaps all-electric vehicles. Perhaps it is possible to make the indirect argument that the ZEV mandate got the automobile manufacturers' attention, and that the EV failures (or, at best, mixed success) further pushed them towards the hybrid route, but Leone raises the key question: "Would tailpipe emissions fees have done the job better and faster?" (Leone, 1999, p. 293). Also, the timing does not support this interpretation. Automobile manufacturers are very secretive, and we may never know, but superficially the evidence suggests that hybrid vehicle research was underway before the original ZEV mandate was adopted.

A relevant issue is the role of the Partnership for a New Generation of Vehicles (PNGV) that was launched as a public-private partnership in 1993 between the U.S. Government and the Big Three automakers. Its results have been mixed. By choosing diesel-electric hybrids (to be introduced in 2004), the partnership did not result in the adoption of best-practice technology (primarily because diesel fuel is so dangerous to health, and partly because this approach will be insufficient to achieve the 80 mpg fuel economy target). The funds available were too small relative to the Big Three R & D budgets to have much of an impact. Perhaps it would have been better to use the available funds to stimulate innovation by small firms. Probably, the best result from the initiative was to stimulate research by the Japanese and the Europeans into hybrid vehicle and fuel cell technology, and this in turn induced the U.S. manufacturers to pursue these initiatives more aggressively, via a "boomerang effect" (Sperling, 2001).

Recently, CARB has reconfirmed the ZEV 2003 mandate. The details have still not been finalized, but it looks as if automakers selling more than 35,000 cars per annum in California will have to make two percent of 2003 production as fully ZEV vehicles after receiving credits for early compliance and producing enough SULEV vehicles (such as the special versions of the Sentra CA and the Honda Accord) to meet the 10 percent of qualifying vehicles requirement. The proposal includes other highlights. For example, a potential subsidy of up to $3,000 per year for three years may be available from the State, but would be limited by a $18 million cap on the progran that would mean subsidizing only 2,000 vehicles. Even the ZEV vehicles that have been produced, such as the General Motors EV1 (the production of which is currently suspended) and the electric version of the Toytota RAV4 will not meet 2003 Federal safety standards, and would need redesigning to minimize the critical trade-off between performance and weight. The automakers are complaining yet again that this technology-forcing mandate will not work. It looks as if they have an out. Toyota makes the unbelievable claim that the net cost of an electric RAV4 is $180,000 (primarily because the engine and undercarriage modifications are, in effect, hand-built); if this were even a close approximation, they could save substantial money by paying the proposed $5,000 penalty for each mandated ZEV vehicle not produced. If the company receives the maximum partial ZEV credits, and meets one-half the ZEV targets, it would save $70 million in the first year.

If the 2003 ZEV mandate is unachievable because of both technological infeasibilty and evasion, a strong argument could be made for a more cost-effective strategy to improving air quality, opening up a wider array of vehicles (including hybrids) to partial ZEV credit. The case is reinforced by the fact that electric vehicles are far from non-polluting when measured in product life-cycle term. Another problem, hopefully being remedied, is that CARB has been too conservative in allowing low-emission vehicle offsets to the ZEV mandate (although special versions of the Nissan Sentra and the Honda Accord have been certified as SULEVs and qualify for partial ZEV credit). However, a major step forward is CARB's agreement to allow SULEVs and hybrids to count towards its mandates. The ZEV mandates are still under review, but it looks as if battery EVs will only need to account for two percent of the vehicles, and this could include neighborhood EVs and other credits. There are three types of "pure" electric vehicles: neighborhood vehicles, not much more than glorified golf carts with low speeds and a short range; city vehicles (such as Ford's small Think City car due out in 2002) that could be driven at freeway speeds, but have a short range and are intended for commuting and short trips; and the regular electric cars (such as the EV1 and the RAV4).

Conservatism and face-saving has diverted attention from the big picture, a dramatic reduction in overall automobile emissions if significant market penetration by gasoline-electric hybrids and SULEVs (even ULEVs) could be achieved (in part, market penetration is a function of costs, and persisting with a strong preference for an all-electric range drives up costs).

The Toyota Prius and its competitor, the Honda Insight, are technological marvels; they are less likely to be marketing marvels15 (their impressive fuel economy may not compensate for inadequate power and higher price16). The Prius is a very imperfect solution because its SPU is a standard battery; this "is likely to prove the Achilles heel of the Prius in terms of performance, reliability and the cost of frequent replacement" (Ellis, 1999, p. 25). To illustrate this, consider the results of a test drive by Autoweek magazine: to commemorate the centennial of the first car to climb Mount Washington in New Hampshire, they attempted the 7.6 mile climb with a Toyota Prius; two miles up the mountain, the battery failed (Katz and Payne, 2000).17 Also, a recent driving test of the Prius found on-road fuel economy much worse than advertised. In addition, under adverse driving conditions (winter in the Northeast) the Prius switched jerkily between the gasoline engine and the electric motor, compared with a much more seamless performance by the Honda Insight. Obviously, technological advances remain a work in progress.

To explain the advantages and limitations of the Prius (and the Honda Insight), a brief digression into the automotive technology of hybrids is needed. There are two main technological options: a "parallel" hybrid and a "series" hybrid. A parallel hybrid combines a conventional engine/mechanical gearbox and a battery-driven electric motor that operate independently. A series hybrid uses only electric traction, but power is generated by a fuel (either gasoline or diesel) and a SPU; the SPU provides most of the hybrid's improved efficiency (some of it coming from "regenerative braking" when the vehicle is slowed down by the electric motor acting as a generator) and recharging takes place on-board. There is no need for external recharging, either overnight in the garage or at recharging stations. Because of its battery constraint, the Prius has to use the gasoline engine to accelerate faster than 7 mph, so it is not a true series hybrid that would be a ZEV when the engine is off. Nevertheless, it has double the economy of its nearest conventional competitor, with equivalent benefits in terms of reduced emissions, including CO2 emissions (Burke and Miller, 1997).

Despite their limitations, the Toyota Prius and the Honda Insight move the assessment of hybrids as a major automotive force from the questionable to the highly probable. The Insight beat Toyota to the punch being introduced in January 2000 while the Prius's debut was delayed until July. It is classified as a ULEV (ultra-low-emissions vehicle), with a highway fuel economy of 70 mpg and a range of up to 740 miles (in terms of market penetration, its current drawbacks are its two seats -customers who need five seats would have to opt for the slower Prius -- and its 5-speed manual transmission, a temporary problem because an automatic version is marketed in Japan and should reach the U.S. this year). Ford and Daimler-Chrysler are promising to mass-produce fuel-cell vehicles by 2004, not quite soon enough for the ZEV target year of 2003. Ford's current prototype, the P2000, is a stretched Contour achieving 100 hp with an acceleration of 0-60 mph in 12 seconds, and has a fuel economy of 63 mpg; on the downside, it runs on compressed hydrogen that uses up all its trunk space, its fuel system accounts for one-third of its weight, and its range is limited to 100 miles. Daimler-Chrysler's Necar-4, based on the Mercedes A-class is a four-passenger vehicle of 75 hp, has a top speed of 90 mph, a range of 280 miles, and reaches 35 mph in 6.5 seconds; more notably, its fuel cell occupies a 6-inch space under the car floor. However, it weighs 3,800 lbs.18 and uses liquid hydrogen stored in the trunk space (an unresolved safety problem). General Motors is developing an aluminum-intensive, 90 hp diesel-electric hybrid with a fuel economy >80 mpg and double the range of the original EV1. General Motors also has plans to develop a full-size truck hybrid (probably a version of the Suburban), a concept that might have considerable market appeal, given current consumer tastes and the recent spike in gasoline prices.

Further technological advances are still needed to make hybrids fully competitive. Attempting to meet SPU needs with chemical batteries is the obvious weak link (weight, power, reliability, service life, efficiency, battery disposal, etc.). Technological progress in gas turbines and fuel cells are likely to make series hybrids superior to parallel hybrids. Two promising SPU technologies are ultra-capacitators (actually an old technology, currently with inadequate power except for small vehicles) and kinetic energy storage systems (KESS). The current best bet is the Powerbeam KESS (a powerful 120 kW SPU) which is expensive but could last the life of the vehicle. It could result in a "hybrid-hybrid" which works as a series hybrid in the city and as a parallel hybrid on the highway (on average, about 60 percent of VMT would be fueled electrically). It avoids the cold-start problem because the engine does not have to be fired up to start the car, but only later when the catalytic converter will have been heated electrically. Despite the environmental benefits of using compressed hydrogen as a fuel (one-third of the CO2 emissions of ICE vehicles), because of the lack of hydrogen infrastructure and storage and safety issues, the first commercially applicable fuel-cell vehicles are likely to use methanol to process the hydrogen indirectly19. Nevertheless, "(g)iven that fuel-cell systems now cost 10 times more than traditional engines, that no fuel infrastructure exists for hydrogen and methanol and that the systems are still too big and heavy, they are by no means assured of public acceptance" (Nauss, 1999, p. W6). Fuel cells are most likely to function as long-range batteries rather than as alternatives to engines. Although technological problems remain, they are not overwhelming enough to slow down these developments, provided that legislative insistence on a minimum battery-own range ("a blind alley", according to Mark Bursa, Editor of ISATA Magazine) can be overcome. The "end game" powertrain is likely to be an electrically recharged fuel cell of 40kW with a range in excess of 300 miles, complemented by a SPU of 100 kW and 1-2kWh of usable capacity, driving a traction motor/generator of around 100kW.

Pending these technological solutions, the major issue is: What could, and should, be done to expand the market for hybrids? Much depends on the automobile manufacturers, not only in terms of their technological progress to relieve the limited power problem but also in their ability to address the pricing issue, if necessary by aggressive cross-subsidization of vehicles. From the perspective of government action, there are three lines of attack. The first is tighter emission standards. This is unlikely to work as a hybrid promoter, because ultra-clean (although not ZEV) standards can be met by with technical improvements and catalytic converter treatment in conventional ICEs. Second, higher gasoline prices via increased taxation is a potential instrument. In the United Kingdom case, Evans (1998) argued that the government was pursuing a policy of instrumental redundancy by using land use controls in addition to higher gasoline taxes to address the automobile pollution issue. However, there are major difficulties with this approach: i. political acceptability; ii. the adverse repercussions of higher gasoline costs not only on consumers but on the economy as a whole; and iii. questions about the long-run price elasticity of demand for gasoline (obviously higher than the short-run elasticity, perhaps high enough to quench the thirst for SUVs and trucks, but may be too low to shift tastes in favor of hybrids). Third, the same arguments apply to a carbon tax, although this would have the wider goal of reducing CO2 emissions. The fourth policy instrument is tougher CAFE standards, but applied to all vehicles including SUVs and trucks. Again, there is a political acceptability issue, but it could do the trick. If tough enough, higher standards could make a wide introduction of hybrids the only means of achieving the targets.20 This could accelerate the rate of R & D and encourage the automobile manufacturers to implement aggressive pricing strategies to market the hybrids.

X. Changing Tastes And Preferences

Both the technological and the land use approaches to improving air quality share one very important thing in common: they require significant changes in the habits and preferences of Americans; either what we drive or how we live (in terms of internal and external space). Although what we drive has been moving in the "wrong" direction in recent years (given the passion for SUVs, trucks and minivans), that could easily be turned around with a sharp enough spike in gas prices. Of course, whether an increase in gasoline taxes large enough to change automobile and driving preferences would be politically palatable is another question (as pointed out above, and especially since the protests throughout Europe on this very issue in September 2000). But certainly changing driving habits on a nationwide scale is much easier and more feasible than increasing densities. Even if more Americans were willing to put up with higher-density living, it could only affect the increment to the housing stock. In other words, the vehicle fleet turns over much faster than the housing stock.21

Furthermore, we know that changes in driving will, especially if buttressed by higher driving costs and other incentives22/disincentives, reduce air pollution by significant amounts, whereas it remains unclear whether densification would (bearing in mind that pollution damage consists primarily of human health impacts, and higher densities mean more people exposed for a given level of pollutants).23

Another important point is that the technological solutions are now (after early technology-forcing mandates) being driven by market competition whereas the land use approaches would require continuous and more invasive government intervention at all levels of government. Inducing people to drive differently via a combination of attractive products and policy incentives (e.g. emission fees on SUVs and trucks, tax credits for buying/leasing hybrids), while not easy, has much more prospects for success than forcing them to live differently via planning regulations. As an example, a new law in California (AB 71) that took effect on July 1, 2000, allows solo drivers of EVs, SULEVs and ULEVS to use the carpool lanes; this could be a powerful incentive on some routes, reducing trip times in half. Similarly, in April 2000, the City of Los Angeles adopted an ordinance allowing electric vehicles (and some natural gas vehicles) to park free at parking meters. Like the carpool lane exemption, measures of this kind are an incentive to new car buyers/lessees to shift preferences. The Bush Administration's energy plan includes $4 billion of research for hybrid vehicles, and offers the prospect of a $4,000 subsidy towards the purchase of hybrid vehicles. The combination of a tax credit, gasoline savings, and access to carpool lanes might easily tip the balance for many against the SUV/truck and in favor of the hybrids. Another option, currently being explored by several major auto manufacturers, is to develop hybrid SUVs (e.g. a proposed Dodge Durango, a Ford Explorer, and a protype GM Suburban), thereby achieving a balance between fuel economy (and emissions) and existing consumer preferences for the larger, more spacious vehicles. One reason among many for doubt about the land use approaches is that unless we are willing to adopt a national system of uniform land use controls, the "exit" option (i.e. moving to a less regulated jurisdiction) will still be there and may become increasingly attractive.

XI. Conclusions

Focusing on California, Leone (1999, pp. 304-5) comes close to the argument in this paper: "Many options for addressing California's remaining air pollution problems are politically unpalatable or extremely expensive: these include unpopular restrictions on driving; costly public transit investments that are disruptive and require long lead times; and fundamental changes in land use that require even longer lead times. EVs, in contrast, emit no emissions at the point of use and, therefore, do not require driving restrictions. Although the electricity to power them does generate pollution at the power plant, these discharges typically occur away from urban areas (at least in California) and need not exacerbate the air pollution problems in an urban air basin. The highway infrastructure already exists to accommodate EVs, and no pervasive changes in land use are necessary." I have elaborated the reasons why the land use and travel behavior solutions will not work. In addition, I have substituted the hybrids for EVs as the most effective mid-term solution to the urban air pollution problem.24 The cost is minimal emissions rather than zero emissions25, but this would be offset by a drop in power plant emissions. Also, in the near term, there is progress to be made in emissions technology (e.g. reformulated gasoline [probably with ethanol additives substituted for the potentially dangerous MTBE], pre-warmed catalytic converters, the new SULEV Nissan Sentra and Honda Accord) and in the extension of emissions rules to trucks, pickups and SUVs (to be introduced by 2007, and already being voluntarily complied with by the Ford Motor Co.). The bottom line is the need for more modesty on the part of planners. They should not expect that they can solve all economic, social or environmental problems by changes in land use and/or by influencing individual behavior.


  1. However, in terms of cost-effectiveness (measured in terms of $ per ton of pollutant removed) it is much cheaper to attack stationary rather than mobile sources. In Southern California, for example, it is 2.4 times more expensive ($3,503 relative to $1,477 per ton per day) to reduce pollution by mobile-source rather than stationary-source measures (Lee, 2000).

  2. In 1999 and 2000 Houston overtook Los Angeles, although two years do not establish a firm trend. Nevertheless, for the first time since records were taken, there was no first-stage smog alert in 1999 in Los Angeles (there had been 120 in 1979).

  3. The basic point is that the plot of x/a against a/x will be a rectangular hyperbola, and that a plot of y/a against a/x will tend towards a rectangular hyperbola (Brindle, 1994).

  4. In California, settlement is becoming more compact with population growth running ahead of land absorption in most counties, but this is largely the result of high land prices (Landis, 1999). Market forces achieve what planners find difficult.

  5. In Southern California, ARCO, now bought out by BP, (which supplies about 20 percent of California's diesel fuel) is already planning to sell a much cleaner low-sulfur diesel fuel (the sulfur content has been reduced by 87.5 percent), especially for municipal fleet vehicles. The cost will probably be another 5 cents per gallon, and a new catalytic converter is required, but this is a much cheaper solution than buying the more expensive alternative fuel vehicles.

  6. For example, it is estimated that it would cost $1 billion to convert California's 17,000 diesel school bus fleet to natural gas (only 3 percent of school buses run on natural gas, compared with 20 percent of urban transit buses). Although buses account for only 1 percent of total direct diesel emissions, schoolchildren are considered to be especially vulnerable, although no precise measurements exist for their level of exposure. An obvious priority is to retire the 1,000 or so pre-1977 buses that are especially high-polluting.

  7. Hong Kong is the sixth in the world in PM pollution, a reflection of the 30 percent diesel share in the vehicle fleet (including trucks, buses, minibuses and taxis).

  8. In this paper, I do not join in the controversy whether or not automobile emissions fees would have been more cost-effective than the emission control mandates. The mandates approach was certainly more politically acceptable and involved lower transaction costs.

  9. The Nissan Motor Co. has introduced in the year 2000 a SULEV (Super Ultra-Low Emission Vehicle) Sentra that reduces HCs by 75 percent and NOx by 90 percent compared with today's cleanest vehicles. It was first introduced in California, and is also the first car to be certified by CARB as eligible to receive credits to meet the 2003 10 percent ZEV goal. Interestingly, the Nissan Motor Co. believes that their technology is so clean that they can bypass the hybrids altogether and move on to fuel cell technology. Honda is also introducing a SULEV Accord EX, again only in California.

  10. Also, it would be wrong to assert that technological solutions are always a complete success. An example is the methanol-based gasoline additive, MTBE. Effective in reducing emissions, it was discovered that it had leaked into groundwater supplies, raising the possibility of cancer risks. Accordingly, California is phasing out its use, followed by the EPA with a nationwide ban. Fortunately, there are substitutes (e.g. ethanol-based additives) that are almost as effective, although their unintended consequences (and probably higher costs) also need to be examined.

  11. As opposed to the astronomic prices of the early EVs, the Honda Insight with air-conditioning has a MSRP of $20,080 ( the price of the Toyota Prius is similar). This is still high compared with equivalent traditional ICE vehicles, but the margin is narrowing.

  12. Honda joined other companies and the California Air Resources Board to form the California Fuel Cell Partnership, also in April 1999. The company is currently developing both hydrogen-fueled and methanol-fueled prototypes with a target date of 2003 for a production model.

  13. The gains from further improvements in aerodynamic efficiency should not be underrated. Achieving the "ultra-sleek" is probably much less expensive than achieving the "ultra-light."

  14. For an early argument on these lines, prior to the recent developments in hybrid technology, see Gordon and Richardson (1995).

  15. However, the Honda Insight is the first commercial product to receive an award from the Sierra Club.

  16. The Prius may sell better in Europe where high gasoline prices would result in dramatic savings in operating costs. In more general terms, analysts have estimated that the shift from ICE vehicles to hybrids could halve the EU's 2010 urban fuel consumption forecast and reduce the non-urban forecast by 30 percent (Ellis, 1999, p. 23).

  17. The United States Advanced Battery Consortium (USABC) has spent $294 million on battery development since 1991. Progress on the Ni-MH (nickel-metal hydride) battery has stalled, and future efforts are being devoted to lithium batteries.

  18. In contrast, the aluminum Honda Insight weighs 2089 lb. (with air-conditioning), despite a heavy battery stack.

  19. However, only BMW has a demonstration vehicle currently available (unlike the other automobile companies BMW is pursuing a liquid hydrogen technology). None of the other companies expect to have a demonstration vehicle before 2004 or 2005, and noone plans retail sales before 2010 at the earliest.

  20. Nivola (1999) argues that higher fuel taxes are a much better approach than tougher CAFE standards (for example, more fuel-efficient vehicles induce people to drive more), but Republicans in Congress may object somewhat less to tighter CAFE standards than to higher taxes.

  21. Housing mobility is quite fast (households change homes every five to seven years). However, this will only have an impact on densities if mobile households choose more compactness. In fact, many homeowners trade up to larger houses and larger lots, while renters changing tenure to homeowners almost always move to a lower density.

  22. As an example of an extreme incentive, Arizona allowed you to claim 50 percent of the EV price or $10,000 (whichever is the larger) and carry the tax credit forward five years (then add on the Federal tax credit of 10 percent of the purchase price). For instance, Arizona would have paid you more than $2000 to purchase a GEM E825 (not much more than a cute, glorified golf cart) for free. Extend this level of subsidies to hybrids, and Toyota and Honda would not be able to produce them fast enough! However, budgetary considerations have forced arizona to cut back on its largesse.

  23. A downside, of course, is that the cheaper operating costs of the hybrid might encourage more VMT with increasing congestion if hybrid penetration of the market is significant. However, this paper focuses on the single goal of reducing air pollution.

  24. A well-known auto industry analyst, Dean Bedford, has argued that we must "get away from the extension cord and the electric vehicle" (cited in the Los Angeles Times, April 29, 1999).

  25. However, hybrids with an all-electric range of 50 miles and 10,000 annual VMT have total emissions close to a true EV (Burke and Miller, 1997).


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