Climate bill a hidden transportation tax, ATA says

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The American Trucking Associations announced Wednesday, May 12, that it cannot support the American Power Act, the climate change bill introduced by U.S. Sens. John Kerry and Joe Lieberman. Bill Graves, ATA president and chief executive officer, says the bill will raise the cost of gasoline and diesel fuel without significantly reducing the output of carbon dioxide by the trucking industry, which is a nondiscretionary user of diesel fuel.

The Senate bill would require refiners to purchase billions of dollars worth of carbon allowances that correspond to the carbon footprint of the fuels they sell. ATA believes the refiners then will pass this cost on to consumers in the form of higher fuel prices.

“While others might object to our characterization, the climate bill clearly imposes a tax on transportation fuels and reallocates revenue from that tax for nontransportation purposes,” Graves says. Only a small portion of the tax would go to the Highway Trust Fund for improvements and repairs to the nation’s highway infrastructure, he says.

“The bill will markedly increase the cost of fuel, but the trucking industry is not a discretionary user of fuel,” Graves says. “While the trucking industry has reduced its fuel consumption and carbon output through the EPA SmartWay Transport Partnership Program and other efforts, the bulk of trucking companies’ fuel use is for their economically vital role of distributing freight whenever and wherever manufacturers, wholesalers, retailers and consumers demand.”

In addition, forthcoming federal regulations required under existing law will mandate vehicle modifications that, while increasing the cost of trucks, will improve fuel efficiency and further reduce carbon emissions, Graves says. “The economically essential nature of trucking means that unless you shrink the economy and reduce the amount of freight transported, which would have disastrous results, you are not going to curb carbon output by trucking under this bill,” Graves says.

In 2008, ATA proposed ways to reduce carbon emissions, including reducing speed limits, governing truck speeds, reducing idling, increasing fuel efficiency, reducing highway congestion, allowing more productive truck combinations and creating national fuel economy standards for trucks. ATA says it supports dedicating transportation tax revenue to the Highway Trust Fund in order to repair bridges and highways and eliminate congestion points, which would further reduce fuel consumption and carbon emissions.

“Part of our concern is that with this cap-and-tax bill, trucking companies are being asked to pay for the reduction of carbon output three times over,” Graves says. “The first payment will take the form of equipment cost increases for large truck fuel-efficiency regulations. The second will be an increase in excise fees we pay into the Highway Trust Fund as the cost of trucks and tires rise under this legislation. And the third will be the enormous hidden fuel taxes that result from the Kerry-Lieberman bill.”

The bill offers incentives to trucking companies for converting from diesel trucks to natural gas trucks. ATA, which supports development of natural gas and other alternative fuels, says these incentives will be attractive to only a small number of companies with dedicated short-distance operations. ATA also believes these incentives are insufficient to ensure the buildout of a competitive natural gas refueling infrastructure.