VMT Reduction Innovation Grant Program

2009 RTP: Land Use and Climate Change.  6/1/07 Version

MTC adopted this Cities21 recommendation. A new, well-funded grant program called the Climate Grants Program was created:

The Climate Grants Program will fund major demonstration projects to test the most innovative strategies to promote changes in driving and travel behaviors. Given that this is the first time that the region has focused its energies on a climate protection initiative, this program provides a great opportunity to learn what kinds of strategies can most effectively reduce GHG emissions. Potential projects may seek to increase the use of low-GHG alternative fuels, expand car-sharing programs, or implement low-GHG tire incentive programs or pricing demonstration projects.

We will not meet CA Climate Action Team 2020 and 2050 climate protection objectives without significant innovation in transportation and land use. The goal of the VMT Reduction Innovation Grant Program is to augment the smart growth and TDM toolkits, making smart growth smarter (more effective). Also, allow risk-taking and the development of innovative policies and pilot programs that have difficulty in getting funded right now.  

Proposed is a $1 million annual grant program, running for five years, with consideration of program renewal after five years, based on a thorough program evaluation.  Minimum grant amount: $50,000.  Maximum: $350,000.  Maximum grant funding period: 36 months.  The program will fund innovations that promise large reductions in CO2 and VMT. 

Examples of innovation funding:

• The funding of TALC's TravelChoice pilot.  TravelChoice provides households with personalized transportation information with the goal of reducing solo driving trips by increasing transit usage, biking, and walking.  See: http://www.transcoalition.org/travelchoice/index.html
• CA Air Resource Board’s  $25MM PHEV funding program. 2006 state law AB 1811 provided a $25 million grant funding program for research, development, and testing of alternative fuels and vehicle technology, via the “Alternative Fuel Incentive Program.”  http://www.arb.ca.gov/fuels/altfuels/incentives/incentives.htm
• WA State's Drive Alone Reduction competitive grant program.  “Private, public, and non-profit entities are eligible to compete for Trip Reduction Performance Program (TRPP) funds to reduce drive-alone vehicle trips. Applicants will compete for $1.5 million total for 2007-2009 projects.”  http://www.wsdot.wa.gov/News/2007/02/02_TRPP_call_for_proposals.htm
• EPA’s Collaborative Network for Sustainability (CNS)grant program. CNS enables grantees and EPA to collaborate in exploring and learning about new approaches to environmental protection that are systems-oriented, forward-looking, preventive, and collaborative. CNS is a testing ground for scientifically-based tools and approaches that can enable a sustainable future at a regional scale. http://es.epa.gov/ncer/cns/
• Bay Area Air Quality Management District's Transportation Fund for Clean Air Program provides grants to implement the most cost-effective projects in the Bay Area that will decrease motor vehicle emissions, and thereby improve air quality: http://www.baaqmd.gov/pln/grants_and_incentives/tfca/index.htm

• The private sector funds innovations on a regular basis.  Venture capitalists make value judgments on the (often overstated) impact of innovative proposals and choose only a few projects to fund.  

MTC is skilled at implementing grant programs such as TLC and HIP: specifying the program, clarifying the specification through an open and public process, publicizing the program to generate many proposals, evaluating proposals, awarding grants, monitoring progress, working collaboratively with grantees on projects, and evaluating grant programs. 

The target audience for these recommendations are MTC staffers that might be involved in implementing such a program.  Some important details are provided to help direct MTC in formulating a program that avoids some potential pitfalls.  These recommendations do not provide sufficient detail to implement the program, create the call for proposals, etc.  Rather, these recommendations serve only as initial guidance to MTC for MTC to further develop the concept.

1. Have MTC administer the VMT Reduction Innovation Grant Program.  Some MTC grants attempt to distribute money evenly among the 9 counties, but these awards should be based solely on merit.

Allow applications from any public agency, nonprofit organization, or private company.    

2. Funding Target Areas:

• Pilot projects are encouraged.  Model programs are encouraged. 
• Bleeding edge TOD
• Mixed use residential project planning studies that that are on the leading edge of VMT reduction / residential TDM / lower residential parking demand / lower annual total household energy consumption
• Parking policy innovations and smart parking
• Ridesharing, dynamic ridematching, hitchhiking, increased utilization of empty seats
• Carsharing
• Line haul transit
• Shuttle buses / circulator transit
• Bicycle / pedestrian (thanks to Michelle D for this addition)
• Behavior change programs (such as community based social marketing programs, TravelSmart, etc)
• Programs that reduce the distance between an individual’s job location and residence. 
• Data collection & GIS for better planning, marketing, and policy effectiveness analysis. 
• Technology to count cars in parking areas.  

• Multi-city, collaborative CO2-reducing planning efforts.  For example, fund an 8-city collaborative transportation and land use CO2 reduction best practices / cost-effectiveness study for their U.S. Mayors Climate Protection Agreement / Cool Cities effort. 
• Policy advocacy and educational programs.

• Density and affordability: architectural/ergonomic studies to increase the appeal of smaller interior spaces (smaller square footage per person) 

Exclude areas that are already well funded:

• Technologies to increase automobile miles-per-gallon for solo drivers or to reduce CO2 emitted per VMT for solo drivers
• Traveler information systems for solo drivers
• Congestion charging technology (this isn’t well-funded, but represents its own separate policy area)
• Projects that fall outside of transportation and land use, like “energy projects” such as solar panels.

3. Grant Proposal Scoring Recommendations:

• Score low for “me too” projects that replicate existing work without adding new features
• Score high for novel new features (or completely new solutions) that promise to reduce VMT and CO2.  Proposal should include an “innovation business case” that describes state of the art, competition, exposes flaws in previous efforts, and proposes solutions to these flaws.   The greater the differentiation from past efforts that can be shown, the higher the score.  Score high for reducing subsidies. 
  • Example: Don’t propose: I want to start up a carsharing experiment in South San Francisco that is similar to 400 other pilot projects going on simultaneously in the world.  Rather, describe the current carsharing market, expose that a) all U.S. carsharing efforts are losing money and that b) the high cost of vehicles combined with extremely low utilization is a major contributor to financial losses.  Propose a European style “shared lease” model where cars are partially owned for individual use some of the time, and are put into service for carsharing part of the time.  Explain the impact on the carsharing bottom line.  Then project out carbon savings from wider market penetration of carsharing. 
  • Example: Don’t propose a TravelSmart driving behavior change pilot project that replicates the efforts of 10 other pilot projects occurring simultaneously in the world.  Rather, describe the current TravelSmart market, expose that a) the cost per VMT reduced is far too high ($18 in Seattle).  b) TravelSmart behavior change wears off at a rate of 33% per year.  C) TravelSmart self-reported VMT reductions are overstated based on the social desirability effect.  Then, describe your projects new features that address these flaws.  Then project out carbon savings from wider market penetration and reduced subsidy. 
• Score higher for each “partner” letter of support where the partner shows a) that they understand the innovation, and b) they support the claim that the innovation will have a large positive impact.  Hence a proposal for a shuttle bus innovation in South San Francisco would score higher when it comes with support letters from the city, from SamTrans, from the chamber of commerce, from Bay BioTech center (HQ in SSF), from PCTRA, and from the top three employers in the area.  Planning studies where prominent developers partner should receive higher marks. 
• Score for high projected CO2 reduction and VMT reduction.  Note that staff will have to use best judgment to determine how much of a large CO2 reduction claim to approve.  IE there will be lots of B.S. in incoming proposals, so we’ll need critical thinking staff to cut through this B.S.  Letters of Analysis from independent industry experts examining CO2 claims will be helpful to proposals.  Please note that a) private sector venture capitalists make similar value judgments on proposals on a regular basis, and b) the example innovative funding programs listed above make similar value judgments. 
• Score higher for matching funds, user revenue and large “in-kind” contributions
• Score higher for implementation versus research

• Score projects higher that have lower cost per VMT reduced.  Grant evaluation should include an open-minded yet skeptical eye towards forecasted reductions. 
• Score higher for 9-county Bay Area proposals and for proposals addressing extreme commutes into the Bay Area.  Score lower for proposals completely outside of the Bay Area.
• Score higher for replicability – i.e. projects that have wide applicability to a range of Bay Area communities

4. Grant implementation details

• Allow sections of grant proposals to be marked confidential, and publish the non-confidential portions of winning proposals. 
• Grant winners should submit status reports twice per year.

Comments from reviewers:

• "There are many great ideas out there, but it's hard to get pilot projects funded." 

• "Grant programs are often so prescriptive that they prohibit innovative ideas that the grant administrators have not conceived.  This open-ended program allows for innovation."

• "Bureaucrats may not be skilled at scoring innovation proposals.  Care should be taken in allocating staff to this program."

• "Why do we need this program?  There are no secrets out there.  We know what to do, it's just a matter of political will."  This is a false interpretation of recent history.  The state of the art has been anything but static over the last 40 years.  Smart Growth came out in the 1970's, so much of Smart Growth and TDM is new and evolving.  Carsharing, TravelSmart, BRT, HOT lanes, 511, transportation GIS/GPS, and traffic reducing housing preference are innovations in the last 15 years that continue to improve every year. Nuride's dynamic ridematching is an innovation in the last 4 years.  Parking automation technology (Parking Carma, etc) is advancing each year. Personal Rapid Transit is the first new form of surface transportation in 90 years and is expected to begin commercial operation at Heathrow in October, 2008.  If we fund innovation, then we can expect to see the same rapid pace of change.  The hope for this grant program is to stumble on to a few innovations that make large VMT reduction much easier.   

• "Why did you include the requirement for the innovation business case?"  This innovation business case serves to ensure that proposals are realistic and relevant.  Former Caltrans Director Jeff Morales demanded that Caltrans-funded research be both realistic and relevant.  He analyzed research efforts and found that a substantial portion of research did not meet these criteria.  In response, he took corrective measures. 

• "Why are you criticizing carsharing and TravelSmart?"  These examples are given as "tough love," in hopes that innovations will lead to these two concepts breaking down barriers to their widespread adoption.  A realistic evaluation of the strengths and weaknesses of concepts is important to devise strategies to make improvements.  It is hoped that the Innovation Grant scoring system will give low scores to "me too" projects.