salient because trucking moves more than two-thirds of the value of all domestic freight and almost half of ton miles.²² The financial deregulation of intercity trucking and freight rail that began in 1980 boosted productivity, but at a high cost to workers, particularly drivers in the truckload sector (movement of commodities directly from origin to destination)²³ as described in the Workforce section of this publication. At some point in the future, autonomous trucks and other vehicles may enhance the efficiency and productivity of trucking and other freight modes as well as road transportation generally,²⁴ but research, experimentation, and policy analysis will be required to inform policy makers about mitigating negative effects, such as reduced employment in freight modes.

Regarding personal travel, aviation TFP growth has significantly outpaced all other modes since 1987, and more than doubled before the onset of COVID-19 in 2020. At the other extreme, TFP for transit, taxis, and limousines has been almost unchanged since 1990.²⁵ (Measures of TFP for travel by personal vehicle would be inconsistent with the definitions of productivity measures cited above.)

It is unclear how the United States could most effectively enhance the productivity and efficiency of transportation in response to declining freight TFP. The improvement might occur through infrastructure investment and pricing to improve traffic flow, revised regulation of carriers, enhanced innovation, or some combination of all of these. Whatever the means, research informing socially optimal choices is critical for future economic prosperity as well as for understanding the trade-offs involved in achieving it.

Within the United States, transportation accounts for the largest share (29 percent in 2019) of total GHGs emitted from all sectors (see Figure 8), and as such, transportation will have a prominent role in the U.S. commitment to meet the goals of the Paris Agreement.²⁸

Within transportation’s share of GHG emissions, on-road vehicles are the dominant emitters (82 percent), and that share is composed of LDVs (58 percent) and medium- and heavy-duty trucks (24 percent) (see Figure 9).²⁹ Aviation is the third largest contributor at 10 percent, but official estimates of aviation’s GHG emissions may understate its role as an adverse driver of climate change due to the complex atmospheric effects of its non-carbon emissions.³⁰

Through recent legislation, including the 2021 Infrastructure Investment and Jobs Act (IIJA)³¹ and the 2022 Inflation Reduction Act (IRA),³² the United States has taken historic steps to reduce GHG emissions across all major sectors. For transportation specifically, these steps include financial incentives for vehicle and battery manufacturing, consumer tax credits for the purchase of electric vehicles (EVs), substantial tax credits for production of low-carbon fuels, and funding for the installation of vehicle charging infrastructure. The legislation also provides incentives for clean power generation to charge EV batteries. Results across a variety of modeled scenarios suggest that the funds provided through the IRA could reduce 2035 U.S. GHG emissions 43 to 48 percent below 2005 levels.³³ Importantly, these projections do not include the consequences of the U.S.

Environmental Protection Agency’s (EPA’s) 2023 proposed multi-pollutant emissions standards that would begin in model year 2027, which would significantly reduce allowable GHG emissions compared with the existing standard.³⁴ Combining IIJA and IRA investments in collaboration with those of EPA, states, local governments, and the private sector would accelerate achievement of climate goals. The federal government’s January 2023 report titled The U.S. National Blueprint for Transportation Decarbonization provides a roadmap of actions and implementation strategies through 2050.³⁵

In addition to federal action, some states have acted on their own and some in concert with one another to further promote uptake of EVs. Notably, in August 2022, California established its Advanced Clean Car II rule that banned the sale of new gasoline-powered LDVs by 2035.³⁶ Up to 17 states tend to follow California’s lead on automobile emissions standards,³⁷ and thus this rule may affect about 40 percent of the total U.S. market for new automobiles. In April 2023, California also announced requirements to end internal combustion engine truck sales by 2036 and phase out their use entirely by 2042.³⁸ The combination of federal incentives in the IIJA and IRA and the states’ support of California’s Advanced Clean Car II and truck EV sales goals could shift consumer vehicle preferences in ways that meet or exceed the federal LDV EV 50 percent new sales share goal by 2030 and achieve roughly 50 percent electric truck sales by 2035.³⁹ However, achieving the intended carbon reductions from EVs will require very substantial increases in electricity generation from renewables, and possibly nuclear power, as well as major upgrades to the electric power grid and gaining permits for, and installing, many new transmission lines.⁴⁰

As impressive as these shifts to EVs would be, they would not offset enough GHG emissions from transportation to enable the United States to meet its Paris Agreement commitments.⁴¹ For example, even if EVs represent 50 percent of new LDV sales by 2030, 88 percent of the nation’s 260 million LDVs would still be powered by fossil fuels. Decarbonizing most other vehicles by 2050 depends on continued innovation and public policy as well as addressing the worldwide shortage in critical minerals needed for EVs following the recent surge in demand for EVs in China, Europe, and the United States.

Aside from LDVs and medium-duty commercial trucks, transportation is a challenging sector to decarbonize. Power demand and limited onboard fuel storage for aircraft, large marine vessels, locomotives, and long-distance heavy trucks require high-energy-density fuels as well as distribution pipelines and storage facilities. Large volumes of net-zero liquid fuels would be needed to decarbonize these vehicles to avoid expanding biofuels to such an extent that their production threatens food production and existing natural carbon sinks in the United States.⁴² Net-zero carbon liquid fuels are technically feasible but do not yet exist at commercial

scale.⁴³ Achievement of decarbonization goals for transportation will require additional R&D to continue to improve battery design to reduce reliance on critical minerals such as lithium and cobalt, accelerate battery recycling, and advance low-carbon and net-zero carbon fuels. Although the IRA provides substantial subsidies for production of low-carbon fuels such as biofuels, synthetic fuels, and hydrogen, including possible use of carbon capture and storage to create net-zero fuels, it remains unclear which alternative fuels and technologies can meet market requirements at lowest cost and reach net-zero carbon emissions on a full life-cycle basis.⁴⁴

Without a carbon tax or much steeper fuel taxes, prospects of substantially shifting modal preferences in the near term appear limited. Research into longer-term trends in mode choice and vehicle emissions is needed to address ongoing debates about their potential magnitude, costs, and benefits. Efforts of cities and states to reduce single-family zoning restrictions and parking requirements, as discussed in the Land Use section of this publication, may help to reduce automobile demand, although it may take decades for this shift to happen outside of a few transit-rich and relatively dense urban areas.^45,46 Moreover, land use plans and policies are rarely well coordinated with transportation policies and decision making.⁴⁷ The growth in videoconferencing during the COVID-19 pandemic could also reduce future passenger travel for education, medical visits, and meetings.⁴⁸ Regarding freight, shifting some demand from truck to rail and water transportation would require reversing the steady loss of mode share to trucking in recent decades (see Figure 3).

Climate change will continue to impact the globe for many years even with urgent and active mitigation. Therefore, the United States and the rest of the world must adapt to changes that have already occurred and cannot be undone. Investing in resilience will require innovations in transportation planning, design, construction, maintenance, finance, and policy making.⁴⁹ Further analysis of the parts of the transportation system that are most vulnerable to disruptive events can help incorporate risk-based resilience management into transportation planning and decision making. The transportation sector also needs probabilistic infrastructure design standards to account for climate model uncertainty at the local scale, including weather events such as wildfires, wind, and floods that are sudden and severe, and for gradual climate effects such as sea level rise.

Although technological innovations, regulations, and incentives in recent legislation offer promising opportunities to greatly reduce the transportation sector’s reliance on fossil fuels, a massive effort will be necessary to decarbonize hundreds of millions of vehicles, build out charging infrastructure, and provide clean electricity by 2050.⁵⁰ Electrification of transportation vehicles is necessary, but will not be sufficient to address transportation’s share of the climate crisis