This piece was originally published in The National Interest

Earth Day is often a time to reflect on how awe-inspiring the planet is and bask in all that nature offers. It also reminds us of the imperative to protect and improve our planet in ways consistent with human flourishing. One area to improve human well-being and address environmental challenges is transportation.  

Affordable, reliable transportation is essential for everyday life, and sound transportation policy can have profound positive effects on the economy, the environment, and the lives of all Americans. The transportation sector affects personal comfort, the cost of goods and services for families, and the communities where people choose to reside. Cars and trucks provide the means to get to work, take kids to soccer practice, and go on road trips with friends. Freight rail and long-haul trucks connect farmers in the Midwest with grocers in the Southeast. Ships and planes connect American companies with global customers and empower travelers to see parts of the world easily and comfortably that our ancestors could not even dream of. 

Public policy that removes barriers to investment and innovation will benefit American families and businesses through more choices, competitive prices, and a safer and cleaner transportation ecosystem. 

Celebrating Environmental Progress

The transportation sector is also critical to meeting America’s and the world’s environmental ambitions. Concerning smog and air quality, the transportation sector accounts for forty-five percent of the total emissions inventory for nitrous oxides (NOx) and less than ten percent of domestic emissions for volatile organic compounds and particulate matter (PM10 and PM2.5). In 2022, transportation accounted for twenty-eight percent of total greenhouse gas emissions. Across industries, opportunities exist to reduce the sector’s environmental footprint while improving the reliable shipment of goods across the country. Smart transportation policy can help accelerate this progress. Nevertheless, it is vital to underscore America’s environmental progress as policymakers address existing and future concerns. 

Nationwide, trends for criterion pollutants and greenhouse gas emissions in the United States have been encouraging. Through innovation, investment in more efficient technologies, and legislation, air quality has improved significantly in the United States. 

The U.S. Environmental Protection Agency (EPA) reports that in 2023, annual sulfur dioxide (SO2) emissions declined by ninety-six percent, annual nitrous oxide (NOx) emissions declined by ninety percent, and carbon dioxide (CO2) emissions declined by twenty-eight percent compared to 1995 levels. Furthermore, ozone season NOx emissions are eighty-nine percent below 1997 levels, and the national trend for particulate matter (PM 2.5) has dropped thirty-seven percent in the last twenty-three years. Comparatively, America’s air quality is among the best in the world and is on par with or better than most European countries.

The transportation sector has made similarly impressive gains in reducing pollution. Engines in all forms of transportation are dramatically cleaner and more efficient today. Although some might still be seen, gone are the days when most cars and trucks had black smoke billowing out of exhaust pipes. Compared to 1970 models, cars, trucks, buses, and heavy-duty trucks are ninety-nine percent cleaner (for carbon monoxide, nitrogen oxides, particulate matter, and hydrocarbons). Newer and remanufactured freight trains have lower particulate matter and nitrous oxide emissions by as much as ninety percent and eighty percent, respectively. Modern airplanes are far more fuel-efficient. Fuel block intensity, which measures the amount of fuel consumed per unit of distance traveled, has decreased by forty-three percent from 1970 to 2024.

Innovation Will Drive Economic and Environmental Progress 

American-led innovation is not just important to reduce emissions in the United States but to pioneer cost-competitive technologies around the world. The private sector is substantially investing in innovative technologies across transportation industries. Some investments will succeed, while others will fail. Some investments may improve operations on the margin, while others could be transformational. While regulation and public policy, including transportation policy (i.e., chasing tax credits), may motivate some investments, there are many areas of compelling innovation across transportation sectors. 

One area is fuel and infrastructure efficiency, which can lead to significant cost savings, increased efficiency, and environmental gains. For instance, trains can carry one ton of goods nearly 500 miles on a single gallon of diesel fuel, but that does not suggest the rail companies care little about fuel efficiency. Given the immense weight (3,000 tons) of the entire freight, a 500-mile trip consumes roughly 3,000 gallons of diesel. Improving freight ton efficiency for container ships, airlines, freight rail, and long-haul trucking is an economic driver that saves, even when factoring in the rebound effect, where greater fuel efficiency encourages more driving. Removing barriers to efficiency investments in a technology-neutral way can boost productivity while reducing emissions.

In 2017, United Airlines introduced a service guide that was ten percent lighter than the previous one. That investment saves 220,000 gallons of fuel and avoids 2,100 metric tons of CO2 equivalent annually. Airlines save money on fuel and reduce emissions by using lighter dishware, carrying less ice, getting rid of in-flight magazines, and even slicing limes into more pieces, which saves Delta half a million dollars per year. Companies like Peloton Technology work on platooning, where trucks travel in close formation to reduce drag and fuel use. Freight railroads are investing in automated train dispatching and fuel management systems that improve efficiency by as much as fourteen percent. Even the deployment of start-stop technology has drastically reduced idling and cut fuel waste by fifty percent. Trucks, railcars, planes, and container ships have all deployed more aerodynamic technologies, which reduce drag and increase energy efficiency. Autonomous semi-trucks have improved fuel efficiency by eleven percent, with improvements up to twenty-seven percent in some cases, and reduced emissions primarily due to an unmanned truck’s slow, smoother driving. If autonomous long-haul vehicles comprised twenty percent of the fleet, it could save an estimated 279 million gallons of diesel and avoid 3.2 million tons of CO2 emissions annually.

Even before the invention of Global Positioning Systems (GPS) and the rapid acceleration of artificial intelligence (AI), transport companies prioritized route optimization to save time and money. Better technology and data have transformed the ability to optimize routes and avoid congestion, delivering products to consumers faster. Rather than relying solely on real-time GPS, predictive route modeling can forecast problems such as congestion, road closures, and weather events. Companies like UPS and FedEx use AI and advanced routing to optimize fuel efficiency and delivery. In partnership with Google and Breakthrough Energy, American Airlines is testing whether pilots can avoid creating contrails—line-shaped clouds formed by aircraft engines that can influence atmospheric temperature and climate—for minimal cost using satellite imagery, weather forecasting models, and flight path data. Two-thirds of aviation’s warming impact comes from non-CO2 impacts (primarily contrails and soot). Combining these technologies and algorithms could have substantial environmental benefits at relatively low costs.

Furthermore, fuel is a significant cost, so every transport sector invests in alternative fuels and battery-powered vehicles. Transport companies have made notable headway on alternative fuels, from research and development (R&D) and testing first-of-a-kind technologies to deploying commercial fleets. Some technologies and fuels may never be commercially viable, while others could diversify the fuel market. That is why it is essential for the private sector, with support in basic R&D from the government, to take risks and reap the rewards without extensive taxpayer support. With Wabtec and Progress Rail leading the way as suppliers, freight rail companies are testing battery-electric, hydrogen-powered, hybrid, and biofuel blends (including hydrotreated vegetable oil for locomotives). Furthermore, companies like Tesla, Daimler, and Volvo are investing in electric and hydrogen-based fuel cell trucks to reduce reliance on diesel.

Another promising development is cleaner-burning “drop-in” fuels that require little or no modifications to existing engines. Biofuel blends used in jet engines can reduce particulate matter, soot, and GHGs. Also called sustainable aviation fuels (SAF), airlines like United Airlines and Delta are investing in SAF production and adoption, where airlines can blend up to fifty percent of SAF with conventional fuel. While price will be the determining factor, Boeing has committed to ensuring all its planes can fly on one hundred percent SAF by 2030. On the fuel supply side, UK-based FireFly has developed a technology to turn sewage into SAF. Furthermore, large shipping companies are experimenting with ammonia-based fuels, and Maersk has launched methanol-powered ships. While many of these technologies are in pilot or early commercial deployment, private sector investment will be critical to drive cost reductions and encourage widespread deployment of these fuels and technologies. 

Actions for Policymakers

Infrastructure and transportation policy must remain a priority if the United States wants to lower prices for families, expand opportunities for American businesses, improve supply chains, and meet environmental targets. Policy reforms should center around modernizing antiquated and bureaucratic regulations, empowering the private sector, and creating more opportunities for innovative technologies to flourish. Some policies apply broadly across transportation sectors, while others are more industry-specific. To that end, Congress and the administration should: 

• Amend the National Environmental Policy Act (NEPA) to expedite timelines, increase accountability, improve efficiency, and curb excessive litigation. Potential reforms include expanding the use of categorical exclusion, narrowing the projects requiring a more comprehensive Environmental Impact Statement, narrowing agency considerations for reasonably foreseeable alternatives, shortening the statute of limitations for NEPA-related claims, and letting state environmental reviews satisfy NEPA requirements. The Federal Highway Administration, Federal Transit Administration, and Federal Railroad Administration’s recent guidance for Section 139 also provides a more streamlined implementation of the supplemental requirements for NEPA to improve permits for transportation infrastructure.
• Amend the Clean Water Act to provide certainty, clarity, and flexibility to make infrastructure investments. Policymakers should modernize the Clean Water Act (CWA) to protect America’s waterways while reducing costly and unnecessary permitting delays. Narrowing the scope of CWA, providing states with more flexibility, reigning in judicial review, and ensuring that permitting decisions are determinative would provide businesses with much more clarity than the status quo. To that end, Congress should clearly define “navigable water,” prohibit pre-emptive and retroactive vetoes under Section 404, improve citizen suit provisions, set timelines for final actions on water quality certification requests, extend and improve nationwide permits, and clarify state 401 certification authority limits.
• Clarifying regulatory definitions and simplifying the permitting process under the Endangered Species Act will improve permitting and compliance. The ESA Amendments Act of 2025 provides several of these fixes, giving businesses more certainty and incentivizing better species protection and recovery.
• Repeal the Foreign Dredge Act and the Jones Act. More than a century old, the Foreign Dredge Act prohibits any foreign-built or chartered ships from dredging in the United States. Consequently, some of the world’s best dredgers, ships that could deepen and widen America’s ports at a fraction of the cost and time, cannot bid on contracts. The Dutch and Belgians own these dredgers, not countries that are hostile to the United States. Deeper and wider port channels would also improve transportation efficiency, reducing emissions from unwanted congestion and light loading. Similarly, the Jones Act mandates that goods shipped between two ports in the United States must be transported on a U.S.-built, U.S.-flagged vessel with a crew that is at least seventy-five percent American. Even removing the foreign build requirement would improve opportunities to move cargo by water, thereby relieving traffic congestion on the roads. 
• Permanently restore immediate expensing and eliminate subsidies for mature technologies. Immediate expensing, also known as full expensing and bonus depreciation, allows businesses to deduct the full cost of qualifying capital expenditures from their taxable income when the expenses occur. Immediate expensing is beneficial for American competitiveness, innovation, and economic opportunity. Expensing is also good for the environment because it spurs investment in more energy-efficient equipment and clean energy technologies. Phasing out subsidies for all mature energy sources and technologies while instilling pro-growth tax reform would enable the most promising and economically viable energy sectors to thrive.
• Support and improve innovation pathways at America’s national laboratories. The private sector is the primary leader and investor in research and development, and Congress should not allocate taxpayer funds toward research that the private sector should undertake. However, public research, development, and demonstration expenditures can advance critical technological breakthroughs. Research at national laboratories for basic and materials sciences can spur scientific discoveries and result in new commercial applications. Applied programs at the Department of Energy’s (DOE) Vehicles Technologies Office and the Advanced Research Projects Agency-Energy can spawn transformative innovations and establish productive public-private partnerships. Congress and agencies should streamline, reform, and standardize the processes and improve the coordination and efficacy of DOE’s basic and applied programs. 
• Require congressional approval for major environmental regulations and codify stricter standards on environmental benefits. Many recent environmental regulations have had increasingly high compliance costs, have been de facto pushes for a specific technology, and have had diminishing environmental returns. For instance, critics called the Biden administration’s tailpipe emissions standards a de facto ban on internal combustion engines, and the PM2.5 National Ambient Air Quality Standards regulations could have cost the U.S. economy $200 billion while approaching natural background levels. Furthermore, agencies should not overly depend on co-benefits to justify new regulations. While co-benefits are important in cost-benefit analysis, agencies should adequately consider the pollutants the proposed rulemaking targets. Moving to permit-by-rule and performance-based regulations rather than relying on procedural laws and more subjective guidance documents that become de facto regulations would provide more clarity and certainty. Congress could change how often agencies must review emissions standards and require congressional approval of major environmental regulations. Doing so would result in a welcome check on unilateral policymaking by agencies and provide more certainty than having changes in regulation every four or eight years.
• Improve voluntary carbon markets and emissions accounting. Companies and individuals are willing to pay for environmentally friendly products and shipping services. Having robust monitoring, reporting, and verification (MRV) carbon offset projects verified by a certified third party and accurate and auditable emissions accountingwould provide customers with the credible information they need to make those choices. Shipping customers could pursue greener options, while shippers would be incentivized to reduce the emissions of their respective supply chains if the private sector strongly prefers greener options. Notably, reliable MRV and emissions accounting could be deployed without the need for taxes, regulations, tariffs, or border adjustments. 

The importance of a well-functioning transportation sector for Americans’ mobility and efficient domestic and international supply chains cannot be overstated. An exceptional safety and environmental profile is critical to a robust transportation economy, whether it is cars, trains, ships, or planes. Public policy must keep up with the private sector to fully capitalize on the innovations and investments across the industry. Congress and the administration need to modernize outdated laws and regulations to comport with a twenty-first-century transportation system and be proactive instead of reactive. The United States is already a global leader in transportation. Implementing the necessary transportation policy reforms will ensure that the industry meets our needs, delivers products on time, and drives environmental progress forward. 

This piece is a condensed version of a new C3 report, Principles and Actions for a More Effective Transportation Policy. 

The views and opinions expressed are those of the author’s and do not necessarily reflect the official policy or position of C3.