Inflation -- an insidious tax especially on working Americans and retirees -- is showing signs of cooling and providing some relief to consumers, but that isn’t stopping some policymakers from stepping in to jumpstart price increases all on their own.
One big example is in California, where policymakers are enacting unreasonable environmental mandates in an unreasonable period of time, with help from the Biden administration. The mandate in question forces trucking and freight railroad companies to phase out fuel-powered trucks and locomotives in a little more than a decade. The problem, however, is that the technology doesn’t exist to do so – particularly at the ambitious timeline regulators decree – and even if it did, there is insufficient energy capacity in the nation’s grid to power these machines.
In the case of both trucks and trains, the California Air Resources Board (CARB) is trying to zero out diesel by disallowing new equipment from entering the market after 2035 that is not “zero emissions.” Putting aside the fact that a truck or a train locomotive would undoubtedly pull energy from energy sources that create emissions, the case for such rail operations is especially fantastical.
“Wabtec Corp. recently unveiled the world’s first battery-powered, heavy-haul locomotive for mainline service, which would operate like a hybrid car,” says the Wall Street Journal editorial board. “It would recharge its battery through regenerative braking and could also tap diesel engines for fuel. But a freight train entirely powered by batteries is still a dream.”
Using batteries to move 5,000-foot trains is a monumental task. Locomotives operate in train yards, “switching” freight from one train to another, but that is a much different task than carrying many tons of cargo long distances. Real-world testing continues at a fast pace, but “even if the technology for zero-emission locomotives eventually arrives, railroads will have to test them over many years to guarantee their safety,” the Journal adds.
The net effect of the mandate will be less competitive transportation options that lead to inflated consumer costs as rail companies exit the sector. “As small-business rail lines risk going bankrupt and prices rise for consumers, what is likely to happen is a shift to more trucks to meet shipping needs,” says Chris Barnard of the American Conservation Coalition.
The rule is in no way limited to California. Many states tend to follow the lead of the Golden State, particularly on these types of issues. And, in the case of railroads, because they operate across state lines, regulatory action in California has an inherent regional and even national effect.
“America’s railroad system is nationally integrated, meaning locomotives constantly cross state borders,” Barnard adds. “As a result, even CARB has acknowledged that its rule will force many companies operating in the state to change their entire fleet nationwide, with enormous price tags attached. The costs of bad policy in California will be passed on to consumers nationwide.”
The Biden administration is effectively coordinating with California to try and skirt established precedent of interstate commerce laws. While not an outright approval of the California scheme, Biden’s EPA is greasing the skids by revising its Clean Air Act guidelines to limit the extent to which federal preemption affects state initiatives aimed at regulating locomotive emissions.
California’s rule on rail emissions is more misguided given that freight rail already is perhaps the most environmentally beneficial mode of freight transportation. According to EPA data, freight railroads account for 0.5% of total U.S. greenhouse gas emissions and just 1.7% of transportation-related greenhouse gas emissions.
If the California rule stands, ordinary Americans and consumers will ultimately lose.
