Driving Out of the Red with Greener Cars

Income inequality in California is already high, and it continues to increase. This income inequality is exacerbated by unequal access to jobs, credit, and efficient vehicles. Wages in California's Central Valley are lower than in the rest of the state, and workers there must commute long distances, with little access to alternative transportation, in older, inefficient cars. As a result, some working families in the Central Valley spend as much as a third to half of their income on fueling and maintaining their vehicle. Some lower-income neighborhoods also suffer from very high levels of tailpipe exhaust from cars that have become unregistered. This new white paper contains on-the-ground reporting, a new survey of farmworkers, and empirical analysis of the burden of transportation costs on Valley families. Amidst the bad news, the report also discovered that the Central Valley is a hotspot for transit innovation: Valley workers have used their social networks to carpool and vanpool at a higher rate than the rest of the state.

This white paper builds a case for "double green" vehicle policies that work to reduce smog and carbon emissions while saving households money. The passage of Senate Bill 459 started a statewide conversation about how to use millions in state vehicle scrap-and-replace funds to better reach middle and lower income households. Building on that premise, the second half of this report looks at policy options that would reduce families' costs, reduce pollution and greenhouse gas emissions, and give workers more choices. A range of national and state programs have successfully made auto loans to lower income households, and this report suggest how the state of California might leverage state tools such as loan loss replacement funds, state low-cost insurance, and scrap and replacement funds to create a sustainable auto loan program. Done well, such a loan program could be expanded to middle class households and advanced vehicles in the future. In addition, the state should work to maintain and expand the use of carpools and van pools in the Valley so that rural families have convenient low-cost and low carbon transportation choices.

Making policies more equitable is key to making them more effective. In California, as elsewhere, policies have awarded rebates and tax breaks to early adopters of hybrid and electric vehicles, even though they tend to have incomes well above $100,000 a year. Another sector of policies raises prices to change behavior. Lower income families, who cannot access credit on fair terms, are left paying higher costs without being able to get electric vehicles or rebates. Yet, they are already changing their behavior--many save on education, medicine, and food to afford their commute. Not only are these policies unfair, they also undercut the effectiveness of millions the state is spending on rebates for electric vehicles. A single 1984 vehicle emits more than 70 times as much tailpipe pollution as a 2012 conventional vehicle, effectively negating rebates for that number of electric cars. To reach its high environmental goals, the state must find ways to partner with working families to reduce their costs while making California greener.

Click here to read the full paper.