The Economic and Environmental Impacts of a Corporate Fleet Vehicle Purchase Program

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The global recession and climate change have placed a premium on policies and practices that can create jobs while also addressing environmental challenges. In the United States, the business community has an opportunity to lead the way by shifting corporate vehicle fleets from reliance on the standard internal combustion engine to more fuel-efficient technologies and alternative fuels. On a large scale, such a move could substantially reduce carbon emissions by reducing the use of fossil fuels and supporting thousands of new jobs. As discussed later in this paper, if half of U.S. corporate fleets embraced alternative fuels, the potential annual reduction of carbon fuels could be the same as removing 1.2 million gasoline-powered vehicles from U.S. roads. The number of jobs created or preserved to produce the alternative vehicles could total 20,000.

While that level of benefits is theoretical, a step toward that reality came with the announcement this year that AT&T plans to invest $556 million to replace a large portion of its fleet with new alternative fuel vehicles over the next 5-10 years (depending on the vehicle). These fleet vehicle purchases will help support approximately 1,000 jobs during each year of the purchasing period. Over the ten-year period, the replacement of standard internal combustion engine vehicles with a combination of hybrid vehicles and vans that run on compressed natural gas (CNG) will reduce gasoline consumption by more than 49 million gallons. During that same period, AT&T will have reduced CO2 emissions by 211,000 metric tons – an amount equal to the emissions from more than 38,000 vehicles.

The AT&T plan could serve as a model for corporate environmental responsibility by stimulating economic growth through the creation of “green jobs” that contribute to the development or production of cleaner or more fuel-efficient technologies. Clearly, the terms green economy and green jobs could mean different things to different people. Green jobs contribute not only to economic growth, but also to furthering development and adoption of cleaner and more efficient technologies. A job that contributes to the production of a technology that is more fuel efficient or cleaner than a previous technology can be termed a green job. For example, one contribution to the green economy is in equipping vehicle assembly operations to build alternative fuel vehicles.

Over the next five years, the company plans to purchase 8,000 domestically produced vans that will be converted to CNG. In addition to the service vans, AT&T will also purchase 7,100 hybrid passenger vehicles over the next 10 years. The hybrid vehicles purchased in the initial years of the program will be Toyota Prius and Ford Escape hybrids, which will operate with an average fuel efficiency of 40.4 miles per gallon (MPG).