With the declining purchasing power of the gas tax the U.S. Federal Highway Trust Fund hasexperienced shortfalls in revenue despite increasing transportation infrastructure maintenanceand investment needs.(1) This paper develops three green transportation financing polices basedon the fixed vehicle mileage traveled (VMT) fee concept (2), and analyzes their impact onrevenue generation, congestion management, energy/environmental sustainability, and equity atthe national and state levels in the U.S. One policy is a green VMT fee that is linked to vehiclefuel economy, the second a mileage-based emissions tax correlated with vehicle greenhouse gas(GHG) and pollution emission ratings, and the third a variable VMT fee based on regionalcongestion levels. A demand model with vehicle miles traveled as the dependent variable isdeveloped for the analysis. The green transportation financing options are compared against abase-case policy defined as a 10-cent/gallon increase in the Federal gas tax. To gauge policyeffectiveness, we measure changes in total Federal and State revenue, VMT, fuel consumption,pollution emissions, and welfare by various demographic groups., Under all policy scenarios,total vehicle miles traveled and consumer surplus decrease with lowest-income (<$25,000/year)households showing the largest percent reduction if no compensatory schemes are employed.The distributional impact of the proposed green transportation financing policies is similar to thatof the existing gas tax, with green VMT fees and emissions taxes being relatively moreregressive, and nation-wide congestion pricing being relatively more progressive.
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