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Like his predecessors, the nation’s 44th president has an ambitious agenda. Near the top of Barack Obama’s to-do list are transportation infrastructure and reducing emissions.
Repairing or replacing highways, bridges, roads, ports, and air and train systems is critical to reinforcing safety and sustaining the United States’ long-term competitiveness, according to Obama, who maintains that such projects will “create up to 2 million new direct and indirect jobs and stimulate approximately $35 billion per year in new economic activity.”1
To fund the projects, Obama proposes two sources: the United States Highway Trust Fund and a yet-to-be-created National Infrastructure Reinvestment Bank. Established by the 1956 Highway Revenue Act to finance the repairs and expansion of the interstate highway system, the Highway Trust Fund consists of three separate funds: the Highway Fund, Mass Transit Account, and the Leaking Underground Storage Tank Trust Fund. Monies for the Highway Trust Fund are raised indirectly from federal fuel taxes; in 2006 these taxes yielded $28.2 billion.2
The National Infrastructure Reinvestment Bank is designed to expand and enhance, not supplant, existing federal transportation investments. This independent entity will be directed to invest in the nation’s most challenging transportation infrastructure needs. The Bank will receive an infusion of federal money—$60 billion over 10 years—to provide financing to transportation infrastructure projects across the nation, according to Obama’s Web site.
Reducing carbon emissions isn’t a new idea. In 1992 the United States and 153 other nations joined an international treaty, the United Nations Framework Convention on Climate Change (UNFCCC), to begin to consider how to reduce greenhouse gas emissions.
As originally framed, the treaty set no mandatory limits on emissions for individual nations and contained no enforcement provisions; it is, therefore, considered legally nonbinding.
The UNFCCC divides nations into three categories, based on level of commitment:
As an industrialized country, the United States is also required to be an Annex II country. Annex II countries, which have to provide financial resources for the developing countries, are a sub-group of the Annex I countries.
p>Developing countries, which can volunteer to become Annex I countries when they are sufficiently developed, have no immediate restrictions under the UNFCCC. This serves three purposes:
The UNFCCC included provisions for updates (called “protocols”) that set mandatory emission limits. The Kyoto Protocol, adopted in 1997 in Kyoto, Japan, established legally binding targets for 37 industrialized countries and the European community for reducing greenhouse gas emissions. These reductions amount to an average of 5 percent below 1990 levels between 2008 and 2012.
The United States was required to reduce its total emissions an average of 7 percent below 1990 levels; however, the United States, although a signatory to the Kyoto Protocol, has never ratified the Protocol for a variety of reasons, including its lack of binding targets and timetables, and the potential economic strain it might put on the country.
The United States remains committed to a leadership role on the issue of climate change and aims to take an approach that is consistent with the long-term goal of stabilizing greenhouse gases.
Obama’s goal is to reduce emissions to 1990 levels by 2020 in a cost-effective manner. To achieve this, he wants to implement a market-based cap-and-trade system and a put a national cap on carbon emissions. The emissions would be divided into individual allowances that will have financial value. Companies would be free to buy and sell these allowances. In theory, the allowances will reduce each year, resulting in 1990-level emissions by the target date. All allowances would be auctioned off initially, ensuring that all companies pay for emissions they release. Some of the money generated from the auctions will be used for the development of new clean energy sources and improvements.
The move to rebuild the nation’s infrastructure and reduce greenhouse emissions has obvious implications for the transportation industry. As the transition of power takes place in Washington, one thing remains certain: Companies want and like to save money, and transportation is one area in which savings can be realized immediately.
GENCO Transportation Logistics can leverage its transportation solutions to help customers drive down costs. On average, customers that use GENCO’s transportation management solutions save 6 percent to 14 percent off their transportation budget.
For information on GENCO Transportation Logistics, call (800) 378-9671 or email solution@genco.com.
For additional details on Obama’s plans regarding infrastructure, the economy, and emissions reduction, go to http://www.barackobama.com/index.php.
1 “Barack Obama And Joe Biden: Strengthening Aamerica’s Transportation Infrastructure.” barackobama.com. 5 November, 2008. http://www.barackobama.com/pdf/issues/FactSheetTransportation.pdf
2 Broder, John M. “Democrats Divided Over Gas Tax Break”, 29 April, 2008. The New York Times. 05 November, 2008. http://www.nytimes.com/2008/04/29/us/politics/29campaign.html?partner=rssuserland&emc=rss&pagewanted=all.
