Evaluating Heterogeneity in Household Travel Response to Carbon Pricing: A Study Focusing on Small and Rural Communities

Smaller and rural communities are often automobile dependent, a fact that has raised considerable concerns about the equity and effectiveness of market-based climate strategies including carbon taxes and carbon cap and trade schemes in rural states like Vermont. A lack of research and data describing how people in smaller and rural communities respond to changes in transportation costs is a critical gap to informing the design of market-based greenhouse gas mitigation policies and evaluating their potential outcomes. This report describes several related studies that focus on understanding the opportunities and constraints that people face in changing how they travel in small and rural communities in Vermont and also evaluates the equity implications of gas tax alternatives. The research is informed by data collected by the researcher team from interviews, surveys and unique administrative datasets. Findings show that urban, suburban, and rural households all made significant travel adjustments in response to higher gas prices. Urban households were more likely to substitute their mode of transportation or move, and rural households were more likely to adopt an electric vehicle (EV); however, most people in all community types were able to reduce the amount they travel by making fewer or shorter trips. Greater accessibility and more transit options were noted as barriers to change in all communities studied. Significant concerns about the feasibility of EVs were common and also shared across all communities. Overall, these findings suggest that market-based climate policies could be effective, even in smaller and rural communities. The authors also find that many people misunderstand how the gas tax is collected and what it funds, resulting in widely held beliefs that a mileage base fee alternative would be unfair, particularly to rural households. Using motor vehicle registration and inspection records, the researchers demonstrate that a mileage based user fee would be somewhat less regressive than the current gas tax and also less costly than the gas tax to rural households on average in Vermont. They also find that providing simple, factual, information about the gas tax and alternatives can significantly shift public support for gas tax alternatives in Northern New England. View the NCST Project Webpage