Colorado’s Greenhouse Gas Emissions Rule for Surface Transportation Offers a Model for Other States and the Nation

Transportation is the largest source of greenhouse gas (GHG) emissions in the nation, as well as in individual states such as Colorado.¹ Light-duty vehicles, which include everything from small sedans to the largest sport utility vehicles, account for 60 percent of Colorado’s emissions total from transportation.² Colorado’s heavy investments in highways and reliance on driving—often alone—to meet daily mobility needs, including trips to work, health care, education, and other essential services, is why transportation is such a large source of planet-warming emissions in the state.

To address the high levels of climate emissions, Colorado has enacted legislation that sets statewide GHG reduction targets. Additionally, the state has adopted a new regulation that requires the Colorado Department of Transportation (CDOT) and the five metropolitan planning organizations (MPOs) to quantify the total GHG emissions expected from future transportation projects and to reduce emissions by set amounts over time.³ As part of the next surface transportation authorization bill, the federal government should require every state to calculate and reduce surface transportation GHG emissions to net zero by 2050. In the meantime, other states should follow Colorado’s lead and require their state DOTs and MPOs to estimate and reduce GHG emissions.

In 2019, the Colorado General Assembly passed an aggressive greenhouse gas reduction bill: H.B. 19-1261.⁴ The legislation set a goal to reduce statewide greenhouse gas emissions from all sources by 26 percent by 2025, 50 percent by 2030, and 90 percent by 2050, compared to a 2005 baseline.⁵ The legislation makes it clear that dramatically reducing GHGs is required to keep global average temperatures from rising by more than 1.5 degrees Celsius above pre-industrial levels, “which scientists agree would provide a more stable and hospitable climate for current and future generations and mitigate the risk of catastrophic climate impacts in Colorado.”⁶

Although a net-zero goal for 2050 would more adequately address this risk, achieving these aggressive targets will require Colorado to rapidly decarbonize transportation through a mixture of innovative policies and strategic infrastructure investments. Gov. Jared Polis (D) released an implementation plan in January 2021, the “Colorado Greenhouse Gas Pollution Reduction Roadmap,”⁷ that offers numerous excellent policy ideas for reducing harmful climate emissions across sectors, including transportation.

In December 2021, the Transportation Commission of Colorado, which sets policy and promulgates rules that govern CDOT as well as the MPOs, adopted a new and innovative planning regulation to reduce emissions. Importantly, the new planning regulation makes climate, which states have historically either ignored or siloed within a few small climate-specific programs, a central element of the planning process. As a result, CDOT and the five MPOs are required to estimate and reduce GHG emissions.

The Colorado Greenhouse Gas Pollution Reduction Roadmap includes numerous strategies for reducing emissions that contribute to global climate change.⁸ The section on transportation starts with a call for vehicle electrification. Vehicle electrification is essential: Without it, no state or country can hope to meet its climate goals.

The roadmap states, “Pursuing the near-complete electrification of [light duty vehicles] by 2050, with an interim target of nearly 1 million light-duty EVs in service by 2030, will significantly reduce the state’s overall GHG emissions while reducing harmful pollutants.”⁹ The recently enacted federal Infrastructure Investment and Jobs Act (IIJA) allocates billions of dollars to states to expand electric vehicle (EV) charging and makes charging infrastructure an eligible project category within multiple federal-aid highway programs, including both the National Highway Performance Program and the Surface Transportation Block Grant Program, among others.¹⁰

However, electrification alone is not enough. Colorado also needs to reduce vehicle miles traveled (VMT). When moving more and more cars sits at the top of the planning hierarchy, everything about the transportation system and local land use ends up serving the needs of vehicles. This leads to increased climate emissions in three ways. First, driving vehicles with internal combustion engines produces climate emissions. Second, the construction of highways involves enormous amounts of materials, including concrete, asphalt, and steel, which are produced through energy-intensive processes that emit significant amounts of greenhouse gases. And third, low-density sprawl development built around driving cannibalizes greenfield lands that provide invaluable environmental services, including carbon sequestration.

Denver Metropolitan Area Developed Land, 2001–2019. Result based on authors’ calculations of Multi-Resolution Land Characteristics (MRLC) Consortium, “Home,” available at https://www.mrlc.gov/ (last accessed February 2022)

The loss of greenfield land to development in Colorado is not a theoretical concern. The Denver metro area serves as a powerful case study. According to federal government data on land use, from 2001 to 2019, the total developed area of the Denver region increased by 22 percent, an average annual growth rate of 1.2 percent.¹¹ If this rate of growth were to continue, developed land within the Denver area would increase by an additional 41 percent from 2022 to 2050.¹² In short, planning for ever increasing VMT that underpins greenfield land consumption is planning for climate failure.

Fortunately, Colorado’s roadmap states unambiguously that reducing the growth in vehicle miles traveled is essential to achieving statewide GHG targets: “In addition to transitioning the fleet toward zero emissions vehicles, reducing the growth in vehicle miles traveled is a critical element of reducing pollution from the transportation sector.”¹³ It is worth acknowledging the significance of VMT’s inclusion in the roadmap. Historically, state and local planners have operated under the assumption that VMT will—and should— increase forever. In many respects, planners and elected officials have treated VMT as a proxy for economic vitality; and no elected official wants to be seen as opposing growth. But for the majority of Americans, driving is incidental to economic production and consumption; biking, walking, or taking transit would result in the same levels of productivity and consumer expenditure.

Figure 1

As shown in Figure 1, the decoupling of economic production from driving long predates the conversation around remote work spurred by the COVID-19 pandemic. According to data from the U.S. Department of Transportation and the Bureau of Economic Analysis, national economic production began to diverge from overall driving in the mid-1990s.¹⁴

Colorado’s GHG roadmap assumes that growth of VMT will be 10 percent lower compared to a 2030 no-action baseline or business-as-usual scenario.¹⁵ This means that the state assumes VMT will rise along with population growth but will be 10 percent lower than would have been the case without changes to transportation investments and land use. In other words, the state is not assuming that VMT will be reduced in absolute terms but that the growth curve will be lower when compared to the 2019 baseline. The state arrived at the 10 percent target based on the drop in VMT that occurred in 2020 in response to public health measures instituted to combat the early phase of the pandemic: “VMT reductions hovered close to 10% during the summer of 2020 and were maintained for an additional period of months even though there was an uptick in economic activity during that time period.”¹⁶

There are two reasons why Colorado should seek to reduce the VMT growth rate beyond 10 percent.

First, the initial 10 percent reduction was the result of stringent public health controls. But as residents in Colorado emerged from the initial COVID-19 restrictions, they were confronted with the same largely auto-centric transportation system as before. Nothing about the built environment had changed. Yet the roadmap makes it clear that the state intends to make transportation infrastructure investments that will reduce VMT through a combination of better land use and the provision of safe, efficient, and affordable mobility options other than driving: “State agencies must work with local governments and metropolitan planning organizations to develop strategies to promote more sustainable land use planning.”¹⁷ The roadmap also states, “Designing and building communities that allow for and encourage the use of biking, walking, transit, and other low-carbon modes of transportation will decrease emissions.”¹⁸ In short, the state is envisioning a very different built environment in the coming years.

Second, the pandemic accelerated the adoption of telework and flexible attendance policies for many—though certainly not all—industries. Since gross domestic product (GDP) and VMT began to diverge in the 1990s, the quality and ubiquity of high-speed internet and other advanced telecommunications technologies such as smartphones has made telework even easier, if not a standard practice. The pandemic served as an immense shock to the economy that fundamentally altered the workplace production function, ushering in a new era of telework. Each firm will need to settle on an appropriate combination of in-person and telework. From a transportation perspective, the exact mix is less important than the cultural shift in attitudes and expectations about work going forward. Stated differently, early-phase telework was an on-the-fly enforced necessity, and future telework policies will reflect worker demand. For these reasons, the pandemic-induced VMT drop should not be interpreted as the maximum possible reduction in driving that is obtainable over time.

None of this is to suggest that bending the VMT curve down will be easy. The roadmap notes the long-standing cycle in transportation whereby local jurisdictions adopt land use regulations that mandate low-density single-family housing be separated from other commercial uses—often referred to as “exclusionary zoning”—which in turn puts pressure on the state to build more highways to accommodate the increased driving demand. According to the roadmap, “Local governments often make decisions that have the effect of separating housing at long distances from employment … In many cases, limited state transportation funds are then used to try to address the high levels of traffic that come from these land use decisions.”¹⁹ Dislodging the standard model of metropolitan growth will take sustained effort.

Yet successfully reducing VMT through a mixture of land use reforms and targeted transportation investments will also deliver real equity benefits. Local exclusionary zoning ordinances made possible by endless highway expansion often impose a disparate time and cost burden on disadvantaged communities and communities of color. The roadmap notes that auto-dependent transportation and land use policies lead “to racial and social inequities as lower-income workers are forced into very long commutes [that] worsen GHG and other air pollution.”²⁰

The transportation system and associated land use exert a powerful force on people’s travel choices and overall levels of driving and emissions.²¹ Colorado deserves credit for embracing the idea of reducing VMT as part of its overall GHG roadmap. However, the state should seek to reduce VMT even more aggressively given the powerful ability of sustainable land use reforms and smart transportation investments to allow people to reduce their dependence on automobiles.

The new planning rule implemented by the Transportation Commission of Colorado translates the topline goals of H.B. 1621 and the governor’s roadmap into specific requirements that are binding on the Colorado Department of Transportation and the five regional metropolitan planning organizations. The rule, entitled “Rules Governing Statewide Transportation Planning Process and Transportation Planning Regions,” includes five key provisions that will result in a more balanced and sustainable, and less auto-dependent, transportation system over time.²²

First, the rule requires that future transportation infrastructure investments yield significant reductions in greenhouse gas emissions over and above the reductions that will come from vehicle electrification. The responsibility for these reductions is distributed in a roughly proportional manner among CDOT and the MPOs. For instance, in the year 2030, the state projects that the newly adopted transportation rule will result in a reduction of 1.5 million metric tons of GHGs, compared with the baseline scenario, after accounting for electrification. According to the state, this is equivalent to “burning 169 million fewer gallons of gasoline or taking approximately 300,000 cars off the road for a year.”²³ Importantly, these reductions will be the result of changes to the transportation system that collectively reduce driving and increase transit, biking, and walking. Another way to think about these reductions is that they will come from changes in residential travel behavior stemming from changes to the built environment, rather than the purchase of electric vehicles. (see Table 1)

Table 1

Second, to determine compliance, the rule requires CDOT and the five regional MPOs to estimate the amount of mobile GHG emissions that would result from the construction of proposed “regionally significant” transportation projects. What is particularly impressive about this travel modeling requirement is that CDOT and the MPOs must account for induced demand, which is the additional driving that results from increased highway capacity that would not have occurred in the absence of the expansion. CDOT and the MPOs must publish a report that explains their travel model, including how their models “account for induced travel demand associated with changes to the transportation system.”²⁴

The regulation defines a “regionally significant” project as including the expansion or new construction of “all principal arterial highways and all fixed guideway transit facilities.”²⁵ For instance, widening a highway, including on the interstate system, or adding a new interchange would constitute a regionally significant project since it would fundamentally alter the transportation system in support of additional driving. Construction of a new rapid bus line with its own dedicated travel lane or a new light rail line would also count as a regionally significant project since it would alter the system, but with the effect of reducing vehicle trips. By comparison, a project to repair or reconstruct an existing highway or transit facility would not require modeling since it would not alter the overall system or change the travel behavior of residents. CDOT and the MPOs must produce emissions estimates when they adopt or amend their long-range transportation plans.

Third, if CDOT or one of the MPOs adopts a plan that exceeds its GHG allocation, the agency in question may include one or several “mitigation measures” in the plan “to assist in meeting the Regional GHG Planning Reduction Level.”²⁶ To date, CDOT has published a draft document that details available mitigation measures. Importantly, these measures are non-regionally significant projects and strategies that are nonetheless expected to reduce GHG emissions. Examples include adding pedestrian or bicycle infrastructure such as protected lanes or new sidewalks, increasing transit service frequency, employing traffic management strategies such as changing light cycles to prioritize bus service, and incentivizing better land use, including mixed-use density around transit stops.²⁷ The state includes these and other projects and policies as mitigation measures because they have a clear connection to reducing driving and GHG emissions but are too small to model effectively.

Fourth, the new rule empowers Colorado’s Transportation Commission to hold MPOs and CDOT accountable if they fail to develop plans that will achieve their assigned GHG reduction targets. Specifically, a plan that does not meet necessary reduction levels “may be deemed in compliance” in the event that the agency puts “certain funds” toward mitigation measures.²⁸ The rule does not take any money away from the metro regions or the state but does restrict how certain dollars may be expended to bring plans into compliance. The restrictions apply to what Colorado terms “10-Year Plan” funds.²⁹ For CDOT, these 10-year funds are a mix of federal and state dollars; for MPOs, they are limited to federal dollars that are suballocated to local regions, including both Congestion Mitigation and Air Quality Improvement and Surface Transportation Block Grant dollars.³⁰

The rule allows a metro region that is facing a funding restriction for failure to meet its GHG targets to petition the commission for a waiver for one or multiple regionally significant projects. The commission may grant a waiver if the region can demonstrate that its plan reflects a “significant effort and priority placed, in total, on projects and GHG Mitigation Measures that reduce GHG emissions.”³¹ This exemption language effectively allows a pass for a region that has made a good faith effort to comply with the rule. The rule does, however, contemplate how such a waiver process could create a loophole that undermines its overall intent: “In no case shall a waiver be granted if such waiver results in a substantial increase in GHG emissions when compared to the required GHG Reduction Levels in this Rule.”³²

Fifth, the rule includes a requirement that CDOT evaluate its transportation plans to determine their effect on “disproportionately impacted communities.” The rule notes that the benefits and burdens from Colorado’s transportation infrastructure investments have not been shared equally: “Negative impacts — both to air quality by virtue of proximity to highways as well as limited non-driving options in neighborhoods proximate to highways — have often concentrated in Disproportionately Impacted Communities, often minority neighborhoods in urban and industrial areas.”³³ In response, CDOT must conduct an impact analysis on how future investments would affect these communities as well as “exchange information with, increase involvement in, and consider the transportation needs of these communities in the transportation planning process.”³⁴

Taken together, these five elements make for a strong rule that will begin the long process of shifting Colorado’s surface transportation system from one largely dominated by auto mobility to one that is more balanced, equitable, and sustainable. According to CDOT, the rule should result in a shift of $6.7 billion away from highways and towards projects that reduce driving over the next thirty years compared to the baseline investment mix.³⁸

Colorado’s statewide GHG reduction targets and transportation planning rule are impressive environmental accomplishments. Part of the power of the transportation rule is that it effectively applies to the entire capital construction program. Rather than label a particular bucket of money as money for climate-related projects—which is the approach of the recently adopted IIJA legislation—the Colorado rule requires state and local agencies to model how planned investments will affect climate emissions regardless of the source of the funding that would support construction. This is a promising approach since the effect of atmospheric carbon is the same no matter what funds are used.

Yet there are several additional reforms that the state should consider adopting.

First, as stated previously, CDOT should push to reduce VMT more aggressively, including by setting a formal target of reducing both per capita and absolute driving, not just slowing the rate of growth.

Second, the state should consider asserting greater control over local land use. The best place to start would be parcels within a half-mile of high-capacity transit corridors—both rail and bus rapid lines. Major transit projects usually rely on a mixture of federal, state, and local funding support. The state has a compelling interest in sustainable and efficient land use, and providing capital funding for a transit build-out should trigger state oversight of parcels within the walkshed of a new facility.

Third, Colorado should amend the planning rule to require CDOT to prioritize asset maintenance and repair. This is often referred to as a “fix it first” approach to transportation planning. Major capital projects not only produce emissions for decades to come; they also produce a long-term financial obligation. Transportation infrastructure requires near-constant maintenance and, eventually, reconstruction. Without a mandate to account for the full lifecycle cost of new assets, state and regional governments often will build facilities they cannot afford to maintain. A fix-it-first policy serves as a constraint on new construction by forcing planners to account for the true asset cost. Again, this is analogous to accounting for the cost of emissions with the added benefit that it forces transportation agencies to make more disciplined investments that further reduce the likelihood of highway expansions in support of low-density land use.

Fourth, Colorado should encourage its metro regions to adopt a formal urban growth boundary. Each metropolitan region should have the opportunity to form a boundary and in return have access to additional state funding for transportation and economic development as a reward. An urban growth boundary would provide planners with another lever to ensure that land use is both efficient and sustainable. Given the ample geographic coverage of the state’s metro regions currently, there is enough space to support robust infill development for decades to come.

Colorado has adopted both legislation and implementing rules that set the state on a path toward sustainable economic production. The transportation planning rule represents a model that other states can follow as they look to achieve net-zero GHG emissions from the surface transportation sector by 2050. There is no reason why states should wait for the federal government to act when they have the power to adopt climate goals and rules similar to those adopted in Colorado. The bipartisan infrastructure bill provides every state with robust funding. States should use these funds to implement projects that will aggressively reduce climate emissions while also opening up equitable pathways to economic opportunity.