Policy Goal: Technology Transformation

Transportation policies can also help to advance technological development and transformation that will be necessary for building a modern, clean, and efficient transportation sector. Already, the market for new transportation technologies is growing, as evidenced by the significant advancements in efficient new buses, EVs, and many other technologies explored in the case studies below. Policies can support this transformation through financial incentives that make new technologies more cost-effective or appealing to customers and producers, regulatory requirements for certain technologies, standards that require improved technological performance, and many other mechanisms.

This technological transformation can underlie economic development and transformation as well. A study of the U.S. Department of Energy Advanced Technology Vehicle Manufacturing program, which encourages manufacturers to build or retool factories in the United States to build fuel-efficient vehicles or components, noted that the program has created 38,000 jobs at 17 facilities across eight states. This has in turn supported more than 200,000 additional jobs in the local economy of these facilities, located across the country in states such as Ohio and Indiana.

Finally, these policies can also help create a stable market that encourages increased research and development and provides the regulatory certainty for companies to invest in clean technologies with confidence. Research has shown that such policies that help to “push” technological change can lower the overall cost of GHG reductions, especially when designed to create a long-term policy signal. In many ways, the effect of policy and induced technological change has already been seen in the clean transportation market. For example, in its most recent review of its Advanced Clean Cars program, California noted that EV technology is advancing faster than was anticipated just five years ago, leading to policy achievements ahead of schedule and improved environmental performance of the transportation sector across the state.