UCLA Institute of Transportation Studies

Transportation financing has historically relied on revenue from the gas tax. In recent years, however, the gas tax has faltered in its ability to support transportation projects. Policymakers and planners are currently searching for options to either supplement or replace the gas tax, one of them being a road user charge (RUC). With RUC being a reasonable solution to the funding crisis, many states, including California, have implemented pilot programs to explore its feasibility. While pilot programs and research often mention electric vehicles (EVs) and plug-in hybrid electric vehicles in their scope, most do not acknowledge how carbon emissions may change when adding a price to driving, since EVs do not currently pay for their road use. In order to address this gap, this project relies on a carbon model with three financing scenarios. Results indicate that the optimal funding solution to address funding and climate goals is a dual funding scheme (Scenario 2), which yields the least amount of carbon emissions in both the short and long run. Surprisingly, a universal RUC system (Scenario 3) produces the most carbon emissions, because an outright removal of the gas tax will incentivize consumers to buy less fuel efficient vehicles. Results also imply that there are environmental benefits to pricing EV drivers for their road use, since their carbon footprint declines when paying a RUC. These results inspire four recommendations, which are as follows: 1. Establish federal guidance with a dual funding scheme as the suggested solution to address the transportation funding crisis and to support national climate goals. 2. Replicate the model in other states. 3. Adopt a dual funding model in California. 4. Develop supportive policy for EVs and PHEVs in California.