California’s Legislature is considering modifying the cap and trade program in order to charge drivers a direct carbon tax at the pump. Sacramento should be applauded for realizing that the state’s cap and trade program needs revision, but legislators should put the program out of its misery and kill it. Instead, the body and other Legislatures across the country should enact market-based pricing to reduce emissions from the transportation sector.

Three of the largest emissions sources are volatile organic compounds (VOC), nitrogen oxide (NOx) and carbon monoxide (CO). VOC emission rates decline as travel speeds increase up to 65 mph, NOx emission rates decline as travel speeds increase up to 35 mph and CO emission rates decline as travel speeds increase up to 25 mph. As a result typical rush hour traffic speeds of 5-20 miles per hour reduce emissions more than free flow speeds of 30-60 miles per hour. Reducing congestion can help reduce emissions.

Road pricing is one effective way to reduce emissions. The long-term solution is to enact mileage-based user fees (MBUFs) to drive on all roads. MBUFs would vary based on type of road and time of day. Traveling on a freeway during rush hour would cost more than traveling on a local road in the middle of the day. This pricing could help divert traffic from traveling during peak periods to traveling during off-peak periods. It would take only a shift of 5-10% of all vehicles to substantially reduce congestion and emissions.

States from Florida to Washington are still testing MBUFs, so a shorter-term solution is also needed. Managed lanes and managed arterials can be part of the temporary solution. Managed lanes are optional variably-priced freeway lanes with guaranteed travel speeds of 45 miles per hour. Managed arterials include priced bridges or tunnels that allow drivers to bypass congested interchanges. Such lanes and bridges allow drivers the option of paying a small fee for congestion relief. Traffic in managed lanes and managed arterials emits fewer emissions since vehicles travel at approximately 45 miles per hour on managed lanes and approximately 35 miles per hour on managed arterials. And traffic in the non-priced lanes also emits fewer emissions because with fewer vehicles in their lanes they encounter less congestion and travel faster.