III. ISTEA: THE FRAMEWORK FOR LOCAL INNOVATION IN TRANSPORTATION EFFICIENCY

Congress recognized the importance of energy-efficient solutions when it wrote the "E" for "efficiency" into ISTEA. This was more than a symbolic gesture, as our nation's transportation law now contains a number of policy, planning, and program features that support conserving strategies. Local and state jurisdictions are now in the process of putting these strategies to work. Although ISTEA's nonregulatory features constitute only a component of an overall national energy strategy, not a panacea, it is critical that they be retained and strengthened in the statute's reauthorization.

A. ISTEA's emphasis on efficiency

The first sentence of the Intermodal Surface Transportation Efficiency Act (ISTEA) declares that it is the policy of the U.S. government to develop a transportation system to "move individuals and property in an energy efficient way." The law's declaration of policy is expanded in the nine subsections that follow, establishing the required characteristics of our country's transportation system. These provisions include three additional references to energy-related concerns:

• the components of the system must be "unified" and "interconnected" in order "to reduce energy consumption" and air pollution;
  
  
• significant improvements to the system must be made "to achieve national goals for improved...energy conservation," among others; and
  
  
• the system is to be operated and maintained "with insistent attention" to energy efficiency as well as to innovation, competition, productivity, growth, and accountability.^[71]

The energy efficiency goals of ISTEA are fully compatible with those of a number of other federal laws, including the Energy Policy Act.^[72]

The statute gives expression to these objectives in a number of programmatic features. In general, ISTEA eschews substantive regulatory requirements in favor of procedural ones that assure the consideration of nationally important goals, along with appropriate funding mechanisms to enable regions and states to put efficiency strategies into effect.

The cornerstone of this approach is the planning process established by ISTEA for metropolitan areas and states, which reiterates that it is in the national interest to promote planning that will "minimize transportation-related fuel consumption."^[73] The statute goes on to require metropolitan planning organizations (MPOs) to develop long-range transportation plans and near-term transportation improvement programs in accordance with a number of criteria, including consistency with applicable federal, state and local energy conservation programs and objectives and attention to "the overall social, economic, energy, and environmental effects" of transportation decisions.^[74] These explicit energy criteria are supported by others among the so-called "fifteen factors" of MPO planning, including requirements to give priority to using existing transportation systems more efficiently, to consider the impacts of transportation planning on land use, to plan for the efficient movement of freight, and to consider methods to expand, enhance, and increase the use of transit services.^[75] The requirements for statewide transportation planning, which takes precedence outside of metropolitan areas, generally duplicate the energy-efficiency factors specified for MPOs.^[76]

Two additional requirements are particularly important to planning for local and state transportation systems that conserve energy. First, ISTEA specifies that projects may be included in plans only if full funding can reasonably be anticipated for them; this encourages officials to strive for system efficiency by making the most of available budget resources.^[77] Second, the Department of Transportation has clarified that, where the need for a "major metropolitan transportation investment" is identified, studies must be undertaken to evaluate the cost-effectiveness of alternative strategies in meeting local, state and national objectives.^[78]

Even the best plans, of course, are seldom self-executing. It is the federal funding mechanisms of ISTEA that complement the planning features and further enable and encourage regions and states to implement energy-saving transportation strategies.

Foremost among these are the law's flexible funding procedures, which allow transportation managers to utilize funds that under previous statutory schemes were available only for highway construction and maintenance and, pursuant to local discretion, apply them to energy-saving investments. ISTEA's innovative Surface Transportation Program (STP), in particular, may be used to fund not only highway projects but also transit capital assistance, carpooling initiatives, bicycle and pedestrian facilities, transportation control measures, and other projects.^[79] The inherent flexibility of STP is enhanced by additional statutory authority allowing regional and state authorities to transfer funds not needed in other accounts to this program. Accounts that are eligible for transfer include those for the National Highway System, Interstate highway maintenance, and highway and bridge replacement and rehabilitation.^[80]

In addition, ISTEA helps assure that at least some investments are made consistent with energy and environmental objectives by setting aside modest portions of overall federal transportation assistance for these purposes. In particular, ten percent of a state's STP apportionment must be available for so-called transportation "enhancement" activities such as pedestrian and bicycle facilities, scenic and historic conservation, and mitigation of water pollution due to highway runoff.^[81] And ISTEA's Congestion Mitigation and Air Quality (CMAQ) Improvement Program funds transportation control measures and other projects necessary to help localities attain compliance with national air quality standards; such measures often help save energy as well as reduce pollution.^[82]

Although ISTEA is much more than an environmental or energy policy statute, these efficiency-promoting features are at its core.^[83] They entered ISTEA with strong bipartisan support, and President George Bush signed the law without reservation on December 18, 1991. Shortly after the statute's enactment, the Bush administration's transportation leadership lauded its environmental features.^[84]

ISTEA's package of energy goals, safeguards and incentives hardly constitutes heavy-handed, command-and-control regulation. The law is, instead, a framework for partnership government, with standards, goals and procedures set at the federal level but choices about how to meet nationally important objectives made at the local and state levels.

B. Strategies that work

The partnership is beginning to work. In the Albany, New York metropolitan region, for example, planners are in the midst of a comprehensive consensus-building process pursuant to ISTEA to choose a multi-modal transportation scheme for the region's future. The process is being assisted by a number of system performance indicators, including a measure of the gallons of fuel per day that are likely to be consumed in providing, maintaining and using various alternative visions for the region. The options being evaluated include highway expansion and light rail transit in the congested Northway corridor, strengthening regional capacity to provide stronger links between transportation and land use, and including pedestrian, bicycle and access improvements routinely when major reconstruction is undertaken on priority roads. Although the planning process is incomplete, there are signs that many of the energy-conserving strategies under consideration are supported by the public.^[85]

Conservation-oriented planning strategies have been identified also in metropolitan Chicago, where the Northeastern Illinois Planning Commission has measured the impacts of a range of demonstration projects for reducing automobile dependence and improving air quality. NIPC found, for example, that relocating a business in central Chicago and locating large, multifamily residential buildings convenient to transit and other facilities each saved hundreds of thousands of vehicle miles traveled per year. Substantial vehicle use savings were found also for other types of projects that are eligible for ISTEA assistance, including bicycle facilities, sidewalks and telecommuting. Although NIPC did not measure energy savings directly, it found significant reductions in hydrocarbon and nitrogen oxide emissions as a result of the savings in vehicle use.^[86]

ISTEA has done more than invigorate planning. The STP program, for example, is funding an access roadway that will enable more efficient intermodal freight transfers at the port of Seattle. The law's Enhancements program is helping Natchez, Mississippi establish an intermodal transportation center that will enable that town's many visitors to leave their cars behind and visit sites on trolleys or buses. And the CMAQ program has led to traffic signal improvements in Denver that have reduced travel times by 15 to 20 percent, saved nearly 1,800 gallons of fuel per day, and cut carbon monoxide pollutants by more than two tons per day. CMAQ funds are being used also to help establish passenger rail service on an existing freight line serving metropolitan Chicago and to build a new intermodal freight transfer facility in Auburn, Maine.^[87]

Collectively, strategies like these make a difference. The so-called "Car Talk" advisory committee on reducing greenhouse gas emissions determined that a combination of ISTEA-related transit, bicycle and pedestrian access policies could produce a savings of some 22 million metric tons (MMT) of greenhouse gas emissions per year by 2025. This calculation, which is based only on measures directed at influencing personal travel, does not reflect the substantial additional savings available from improved efficiency in the freight sector. Moreover, the addition of complementary strategies regarding road and parking pricing, according to the committee majority, would increase by 51 MMT per year the savings available from personal travel efficiency.^[88]

C. Ringing endorsements

The principles underlying ISTEA's partnership framework have been strongly endorsed by the President's Council on Sustainable Development (PCSD), which brought together top executives from corporations and environmental groups along with government leaders in an intensive, three-year cooperative effort to chart solutions for the nation's environmental future. Citing ISTEA as a model approach to integrating economic, environmental and equity concerns, the PCSD straightforwardly urged that its basic principles be reaffirmed in the reauthorization. The Council also more generally endorsed approaches to other environmental problems with ISTEA-like applications that tie local discretion to accountability and performance and that are based on community-driven strategic planning and collaborative regional planning. The PCSD was co-chaired by David Buzzelli of The Dow Chemical Company and Jonathan Lash of the World Resources Institute; its members included an impressive array of business and organizational leaders, including executives from Ciba-Geigy, Georgia Pacific, Chevron, the AFL-CIO, General Motors, the Natural Resources Defense Council, and the Environmental Defense Fund, among others.^[89]

Similar conclusions were reached by the "Car Talk" committee. Car Talk, like the PCSD, included representatives from a broad range of interests, including the large U.S. automobile manufacturers, several large energy companies, and a number of additional government, business and environmental interests. Car Talk was generally less successful than the PCSD, in that it failed to reach consensus on certain key points, notably increased gasoline taxes and vehicle fuel economy standards. Nevertheless, the committee was strong in its endorsement of ISTEA's framework for efficiency:

ISTEA's regional structure should be maintained and the Administration needs to support the flexibility, planning, public involvement and program emphases of ISTEA and extend them to other government programs.

The committee also endorsed "the development of a bicycle and pedestrian infrastructure in communities throughout America through continuation of ISTEA funding programs."^[90]

D. Strengthening the framework

ISTEA is working, as communities are beginning to use its features to support energy-saving transportation modes and strategies. Nonetheless, there is a great deal left to accomplish. Many available funds have been employed for energy-inefficient projects that were already in the pipeline before the new procedures and options of the 1991 statute took effect. Many communities and states are still building the on-the-ground political consensus necessary to implement new strategies. There are inconsistencies in the degree to which planning authorities have applied relevant criteria.

Although the law's efficiency features are still being implemented and have not yet realized their full potential, it is critical that they not be abandoned. Rather, the need is to achieve greater success through better monitoring, direction and incentives at the federal level, better implementation of ISTEA's features by MPOs and state governments, and better advocacy by citizens and environmental organizations to promote efficient planning and investment strategies.

As a first step, the ISTEA reauthorization should do its part by creating stronger incentives for efficiency strategies that work. In particular, Congress should seize the recommendation of the PCSD to use "verifiable and enforceable performance-based standards" to stimulate innovative regional and state efficiency strategies.^[91]

The details can be worked out in the reauthorization process. One promising approach might be to reserve a small but significant amount of federal transportation funds as a bonus pool to be distributed periodically to reward those states and regions that demonstrate the most improvement in rates of motor vehicle fuel consumption per capita. Since data on gasoline and diesel fuel purchases and population are already available, tabulation could be relatively straightforward. Since bonuses would be awarded for improvement rather than absolute performance, all states and regions would have an opportunity and incentive to compete. Strategies for performance could vary according to normal regional and state decision-making processes: one region, for example, might emphasize technology-assisted van shuttles and carpooling; another might emphasize efficient land-use planning.

As an alternative or complement to a bonus pool, those jurisdictions showing the best performance in meeting national efficiency goals could be given additional flexibility in allocating federal funds.^[92] While the concepts need to be refined, the key would be to stress performance rather than process and to use incentives rather than only regulation to achieve national efficiency needs. Such measures would build appropriately on the popular, partnership foundation charted by ISTEA's original framers in 1991.^[93]

The reauthorization also should consider additional aspects, beyond creating incentives for performance, to strengthen ISTEA's efficiency-enhancing features. A full discussion of such measures is beyond the scope of this paper, but several are worth brief mention. Amtrak projects, for example, should be made eligible to receive funding from the federal transportation trust funds. The list of CMAQ-eligible projects should be clarified explicitly to include purchases of energy-saving electric cars and other alternative-fueled vehicles that can reduce the fossil fuel intensity of public fleets. And, to assist communities interested in implementing growth management strategies, Congress should direct the Department of Transportation to study and report on those policies and land use design concepts that are most effective in promoting transportation efficiency.^[94]

Notes

71. 49 U.S.C. § 5501 (a) and (b) (1), (3), (6).

72. Energy Policy Act of 1992, 42 U.S.C. §§ 13201-13556 (Supp. V 1993).

73. 23 U.S.C. § 134 (a).

74. Id. at § 134 (f) (2), (13).

75. Id. at § 134 (f) (1), (4), (11), (14).

76. See 23 U.S.C. § 135 (c).

77. Id. at §§ 134 (h) (5) and 135 (f) (2).

78. 23 C.F. R. § 450.318. While some have challenged DOT's authority under ISTEA to require major investment studies, they are in fact supported by the statutory efficiency goals and criteria discussed above. The concept also is referenced in the Federal Transit Act and in subsection (h)(4) of the MPO planning requirements, 23 U.S.C. § 134 (h)(4). See DOT, Statewide Planning; Metropolitan Planning, 58 Fed. Reg. 58040, at 58056 (October 28, 1993).

79. 23 U.S.C. § 133.

80. Id. at §§ 103, 104 (c), 119 (f), 144 (g).

81. Id. § 133.

82. Id. § 149.

83. Many of the same provisions that encourage energy efficiency in transportation also work to support other goals, including economic efficiency and competitiveness, improved air quality, mobility for disadvantaged populations, provision of community services, congestion relief, and utilization of technology. See 49 U.S.C. § 5501 (b). It is precisely the diverse mix of community and national interests that ISTEA serves that has made the statute so popular with the public.

84. See, e.g., Federal Highway Administration, Pub. No. FHWA-PD-92-012, Environmental Programs and Provisions (1992); U.S. DOT, Pub., No. FHWA-PL-92-008, ISTEA of 1991 (1992).

85. See Capital District Transportation Committee, New Visions for Capital District Transportation: Workbook (December 1995).

86. Northeastern Illinois Planning Commission, Local Non-Auto Techniques to Promote Clean Air (June 1994).

87. Metropolitan Transportation Commission (Oakland, California), The Next ISTEA: Weaker or Stronger Brew? (February 1996).

88. The "Car Talk" majority found that a combination of policies supporting vehicle fuel economy, use of alternative fuels, and reduced automobile dependence could save a total of some 387 MMT of greenhouse gases per year from personal travel by 2025. See Majority Report to the President, supra, at 14. Similarly, a consortium of public interest organizations found in 1991, prior to the passage of ISTEA, that a combination of vehicle technology improvement and vehicle use reduction strategies could reduce transportation energy use some 23-57%, depending on the policies employed. Alliance to Save Energy, American Council for an Energy-Efficient Economy, Natural Resources Defense Council and Union of Concerned Scientists, America's Energy Choices: Investing In a Strong Economy and a Clean Environment, 17 (1991). See also part IV of this paper.

89. PCSD, Sustainable America: A New Consensus, Chapters 2 and 4 and pp. 54 and 97 (U.S. Government Printing Office, February 1996).

90. Majority Report to the President, supra, 54.

91. PCSD, supra, at 34.

92. While some incentives should be established to reward performance improvement -- so that jurisdictions in effect compete against their own records -- others should be reserved for absolute achievement. It makes particular sense for additional flexiblity in spending federal funds to be reserved to these jurisdictions whose attainment of performance goals indicates reduced need for targeted funding to achieve efficiency. Conversely, jurisdictions whose performance is particularly deficient when measured against important conservation goals might be required to allocate additional portions of their federal funding to conservation strategies.

93. DOT is already developing a set of measures for various aspects of transportation performance and efficiency, pursuant to its National Transportation System initiative. See DOT, National Transportation System Initiative: Refinements to the Development Process, 60 Fed. Reg. 31,180 (June 13, 1995). The importance of performance indicators to sound transportation management generally is discussed eloquently in Hank Dittmar, Surface Transportation Policy Project, Developing the National Transportation System: A Concept Paper (1994); see also F. Kaid Benfield, "Running on Empty: The Case for a Sustainable National Transportation System," 25 Environmental Law 651 (1995).

94. Other improvements that should be considered to encourage energy-efficient transportation include requiring that bicycles and pedestrians be accommodated when roadways are constructed or re-engineered and requiring states and regions to adopt and improve upon the excellent model established by the Albany MPO and engage in performance-oriented planning.