Telecommuting and environmental policy: Lessons from the ecommute program

Abstract

In 1999 the National Air Quality and Telecommuting Act established pilot telecommuting programs (ecommute) in five major US metropolitan areas. The major goal of the ecommute program was to examine whether a particular type of economic incentive, tradable emissions credits from telecommuting, represents a viable strategy for reducing vehicle miles traveled and improving air quality. A context is established for evaluating whether the envisioned trading scheme represents a feasible approach to reducing mobile source emissions and promoting telecommuting and a review of the limited experience with mobile source emissions trading programs is provided. Using two-and-one-half years of data collected in the ecommute program, telecommuting frequency, mode choice, and emissions reductions are examined. It is found that from a regulatory perspective, the most substantial drawback to such a program is its questionable environmental integrity, resulting from difficulties in designing sufficiently rigorous quantification protocols to accurately measure the emissions reductions from telecommuting. Such a program is not likely to be cost-effective because the emissions reductions from a single telecommuter are very small.

Introduction

In an effort to tackle the twin problems of congestion and air pollution, many metropolitan planning organizations (MPOs) in the US are searching for reliable methods of getting cars off the roads. These methods are wide-ranging and include improvements in public transit, carpooling programs, and incentives for employers to develop transportation management plans for their employees. In developing emission forecasts for their state implementation plans, required documents for all states with areas that do not attain national air quality standards, MPOs generally assume that these measures will achieve some specific reduction in emissions. However, the extent to which these demand-side management methods really work is an open question.

One of the most speculative means of achieving such reductions is via telecommuting. Many MPOs assume that some fraction of employees in their area will work from home a certain number of days per week, thus reducing the number of work trips and amount of emissions. But accounts of the current scale of telework nationwide are quite low, ranging from only 1.0% to 2.1% of the workforce telecommuting on a given workday (Walls and Safirova, 2004). This calls into question the validity of MPO forecasts that sometimes have daily estimates of work from home rising as high as 8% in the near future.¹

Even though telecommuting growth may be much slower than predicted, reducing work-related travel can provide social benefits in the form of reduced traffic congestion and emissions.² In recognition of this, some states and the federal government have come up with various kinds of telework incentives. In the 1980s and early 1990s, state governments provided telecommuting education and training to companies. Also, several states began offering telecommuting programs for state employees that were supposed to serve as examples to be followed by other employers in the states. Actual financial incentives for telecommuting are provided by only a few states. The Oregon Department of Energy offers tax credits to firms that employ telecommuters. Georgia, New Jersey and Virginia are following suit by also providing, or seriously considering, financial incentives to employers.³

One of the biggest efforts by the federal government came in 1999 when Congress passed the “National Telecommuting and Air Quality Act”. This law initiated a 5-city pilot program to encourage telecommuting for emissions reduction purposes. This “ecommute” program was to develop and evaluate methods for calculating reductions in emissions due to telecommuting. Then, as a part of the pilot project, employers who encouraged their workers to telecommute, were supposed to receive credits reflecting the amount of achieved emissions reductions. The credits could be traded with firms that needed emissions reductions for purposes of compliance with the US Clean Air Act. The goal of the pilot program was to evaluate whether the emissions credit mechanism could increase the level of telecommuting.

An obvious advantage of this program compared to explicit financial incentives – tax credits, subsidies, and so forth – is that the government does not need to allocate funds to reward employers encouraging telecommuting; employers are supposed to be able to trade emissions credits in the private marketplace. The major purpose of the pilot program was to evaluate and to sharpen the mechanisms that could be used later on a national scale.