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Can Railroads Win At The Green New Deal Game?

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Can Railroads Win At The Green New Deal Game?

Its highly aspirational goals – which some contend are impractical and overly expensive – include moving the country toward "net-zero emissions" within a decade by electrifying the transportation sector.

Despite the skepticism, the plan is generating a lot of discussion among policymakers, and freight haulers have started to weigh in, including the railroads.

"If it ends up offering incentives or tax breaks to customers that choose a more efficient mode of transportation, we would be very competitive in that, because we're more fuel efficient than say, a truck," Adrian Arnakis, vice president of government affairs for the Association of American Railroads (AAR), told FreightWaves.

Arnakis, who laid out the association's policy agenda for reporters at AAR headquarters in Washington, D.C. on February 8, said that moving toward electrification of diesel locomotives in 10 years, however, would be impossible.

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"A locomotive is a 50- to 80-year asset. It's the same issue that the industry is having with tank cars right now" in meeting federal guidelines to more safely move hazardous materials by replacing or retrofitting them, she said.

The Green New Deal calls for "ensuring that any infrastructure bill considered by Congress addresses climate change," but as Congress begins debating a reauthorization of the FAST Act – the infrastructure bill that's set to expire in 2020, a major priority for the AAR this year will be keeping the Highway Trust Fund solvent.

"We really want to be competitive against our true competitors, the trucks," Arnakis said. "We would like it to be a user pay system" where distance and weight are considered, she said.

"We spend $25 billion per year to completely fund our infrastructure, and would like our trucking friends to also pay theirs, which they currently do not. We do not want general fund transfers anymore."

Because the Highway Trust Fund has had to resort to such transfers to keep it solvent, railroads contend, the trucking industry has been given an unfair cost advantage in competing for freight. The trucking industry has rejected the notion that railroads are unfairly subsidizing them, arguing that freight transportation as a whole benefits from a solvent Highway Trust Fund. In addition, railroads receive federal subsidies of their own through infrastructure project funding.

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"In the short run, we're supportive of a gas tax, and in the long run a more fair solution," Arnakis said, such as a vehicle-mileage tax. That's also the thinking of the Peter DeFazio (D-OR), Chairman of the House Transportation & Infrastructure Committee. Republicans, however, so far remain generally opposed to raising the gas tax.

Arnakis pointed out that attempting to make sweeping changes to infrastructure policy – such as what is being proposed by the Green New Deal – could end up backfiring.

"When you talk about infrastructure more broadly that begins to involve housing policy and green energy; I think that's where things start to get really complicated," she said. "Are folks going to take a bite that's possible, or are they going to shoot for the moon? The bigger the bite of the apple you take, the harder it is to get things done."

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