Freight Railroads & Climate Change
As the leader in fuel-efficient surface transportation, railroads know more must be done to drive down greenhouse gas (GHG) emissions. Armed with the right policies, railroads — and the nation — can make real progress toward a cleaner, more sustainable economy. In this report, railroads encourage lawmakers to embrace economically grounded, market-based solutions capable of shifting the nation toward lower-or-zero-carbon choices. Specifically, railroads called on policymakers to:
- Enact reasonable, market-based emissions reductions strategy to empower competition;
- Restore the Highway Trust Fund to a user-pays system with a short-term fuel tax increase followed by a structured transition to a vehicle miles traveled fee in the longer-term;
- Impose an emissions surcharge based on vehicle fuel efficiency to provide dedicated funding for environmentally efficient passenger rail where appropriate.
The Positive Environmental Effects of Increased Freight by Rail Movements in America
The AAR analyzed data from the FHWA’s Freight Analysis Framework to estimate the impact on emissions of increased freight-by-rail movements in the U.S. The analysis shows:
- If 25% of the truck traffic moving at least 750 miles were transported by rail instead, annual fuel savings would be some 1.2 billion gallons with a corresponding reduction of greenhouse gas emissions of approximately 13.1 million tons.
- If 50% of the truck traffic moving at least 750 miles were transported by rail instead, annual fuel savings would be approximately 2.3 billion gallons with a corresponding reduction of greenhouse gas emissions of approximately 26.2 million tons.
This paper contextualizes how and why freight rail provides a solution that helps decrease the country’s carbon emissions and reduces transportation’s overall environmental impact. It also outlines related matters of public policy — including areas that would clearly deter increased freight-by-rail movements. In sum, while railroads will continue to modernize their operations and infrastructure to compete for and earn additional business, the industry presents a compelling case for reducing greenhouse emissions by increasing rail movements.
How International Trade Impacts Freight Rail
The AAR assessed the role that international trade plays for freight railroads. Analysis conducted in 2018 shows spending by Class I railroads (the seven largest U.S. freight railroads) created nearly $220 billion in economic activity, generated about $26 billion in state and federal tax revenues and supported approximately 1.1 million jobs nationally in 2017 alone. The data regarding trade show a huge swath of freight rail operations — in terms of personnel, equipment and revenue — are directly supported by the international trade that American companies conduct. In fact, analysis shows:
- 42% of rail carloads and intermodal units are directly associated with international trade.
- 35% of annual rail revenue is directly associated with international trade.
- 50,000 rail jobs, worth over $5.5 billion in annual wages and benefits, depend directly on international trade.
Towson University: Freight Rail Economic Impact Study
Research from Towson University’s Regional Economic Studies Institute found that in 2017 alone, Class I railroads’ operations and capital investment supported over 1.1 million jobs, $219.5 billion in economic output, and $71.3 billion in wages, while also creating nearly $26 billion in total tax revenues. Railroads make consistently high capital investments, and the results are impressive, including high-paying jobs within the industry; additional jobs that are supported by the industry; the connection of a wide swath of industries and consumers to the global market; and the growth of local communities because of the infusion of sizeable funds into the market and government budgets. These benefits come at a savings of billions of dollars each year for taxpayers because America’s freight railroads operate overwhelmingly on infrastructure that they own, build, maintain and pay for themselves.
ASCE Report Card: Freight Rail Infrastructure
Released every four years, the American Society of Civil Engineers (ASCE) awarded America’s rail network the highest grade — a B — in its most recent report. The high marks for America’s privately funded freight rail system stand in stark contrast to taxpayer-funded transportation infrastructure. Bridges and roads, for example, continue to age and suffer from overuse. Reflecting their poor condition, ASCE respectively gave these systems grades of C and D.
By spending billions of dollars to sustain, modernize and grow the freight rail network, U.S. freight railroads are easing the burden on these transportation systems — and the taxpayers who support them. In fact, railroads spent well above $20 billion a year over the past five years — of their own money, not taxpayers — to build the safe and cost-effective network that exists today.