Showing posts with label transportation. Show all posts
Showing posts with label transportation. Show all posts

Sunday, January 31, 2010

The Runaway Subsidy Train

The Runaway Subsidy Train. By WENDELL COX
In some corridors, 'high-speed' rail won't be much faster than trains in the 1930s.
WSJ, Feb 01, 2010

On Thursday the Obama administration awarded $8 billion in stimulus funds to plan and build high-speed rail projects in California and Florida, and for other routine passenger-rail projects masquerading as high-speed rail. This is a political plum to the states that will receive the money.

It is also a dream come true for fans of bullet trains in Japan and Europe and the faster, greenhouse gas-belching Mag-Lev (magnetic levitation) lines. But this is not money well spent.

Supporters say high-speed rail is a cost-effective, "green" solution to airport and highway congestion. In reality, it is costly to build and operate and has a negligible impact on highway and airport traffic. High-speed rail is driven by little more than a romantic notion to confer a European ambiance on American cities.

Proponents also claim that high-speed rail is profitable, but this too is off the mark. Internationally, only two segments have ever broken even: Tokyo to Osaka and Paris to Lyon.

Ridership in these markets has been bolstered by high gasoline prices and one-way highway tolls of $40 and $100, respectively. These and other foreign routes have attracted much of their ridership from a strong core of rail passengers that does not exist in the U.S.

The administration is giving California $2.25 billion for trains that are expected to reach 220 miles per hour between Los Angeles and San Francisco. The cost of building this rail line is now estimated by the California High Speed Rail Authority to be more than $40 billion and could be $60 billion or more.

Even after adjusting for inflation, the projected cost of the system has increased by half over the original cost in the past decade. Ridership projections have also fluctuated wildly, from as low as 32 million annually to nearly 100 million; now the rail authority estimates the train will carry 41 million passengers each year.

High-speed rail does little to unsnarl traffic jams because most highway congestion is within urban areas, not between them. It also has negligible impact on airport congestion. The world's strongest high-speed rail market, Tokyo to Osaka, is also one of the world's largest airline markets. Even with high-speed rail, there is still frequent air-shuttle service between Paris and Marseille.

Environmental claims are misleading. Using California High Speed Rail Authority's data, Joe Vranich and I estimated that the California system would reduce the emissions of greenhouse gases, such as CO2, at a cost of $2,000 per ton. The Intergovernmental Panel on Climate Change estimates that we should be able to meet its greenhouse gas targets by spending $50 or less per ton.

The administration is planning on giving Florida $1.25 billion to build a Tampa to Orlando high-speed rail line. The train on that route is expected to hit speeds of 160 mph and to make a trip between the two cities in about 45 minutes.

This will be helpful if you happen to live in the Orlando Station and have business in the Tampa Station. But most travelers will be better off driving.

It's about 90 minutes by car, though it can be less depending on your home and destination. Once you factor in the time it would take to travel to the station, park, walk to the platform, and wait for the train to depart and also pick up a rental car on the other end, driving would probably be faster.

Other rail projects aren't much better. One project involves a line connecting Portland, Ore., and Seattle, Wash. The administration wants to spend $600 million on the line to shave about 10 minutes off of a three-and-a-half hour trip (which it would do by raising average speeds to 51 mph, from 49 mph).

***

In the other corridors where the administration plans to spend money—such as Charlotte to Raleigh and Chicago to St. Louis—projected train speeds won't be much faster than what the fastest trains in the 1930s were able to do. Some trains then topped 80 mph. As a result, car trips will normally be as fast door to door, and they will be far less costly than taking the train and then renting a car.

There is no need to subsidize intercity travel. Flyers pay for virtually all of the costs of running the airline system, including airports and air traffic control. Gasoline taxes and highway tolls built and maintain intercity roadways, and they also support mass transit with $10 billion in subsidies annually. Intercity buses require no taxpayer funds.

Only rail requires heavy subsidies. At the end of the day, the great danger is that true high-speed rail could cost taxpayers even more than the tens of billions in subsidies that have been paid to Amtrak since the 1970s.

Mr. Obama said in Tampa last week that we are "falling behind" other countries in high-speed rail. With a record budget deficit, it makes sense to fall behind in spending on high-speed rail that we don't need with money we don't have.

Mr. Cox is principal of Demographia, a consulting firm based in St. Louis. He served on the Amtrak Reform Council from 1999-2002 and is co-author with Joseph Vranich of the 2008 Reason Foundation study. "The California High Speed Rail Proposal: A Due Diligence Report."

Monday, July 6, 2009

Pay More, Drive Less, Save the Planet

Pay More, Drive Less, Save the Planet. By GABRIEL ROTH
To fight climate change, Washington wants you to take a bus.
The Wall Street Journal, Jul 06, 2009, p A11

What is the appropriate response to Secretary of Transportation Ray LaHood, who as General Motors prepared to file for Chapter 11 bankruptcy protection declared that he wants to "coerce people out of their cars"? One might be inclined to dismiss these words as overkill -- except for recently introduced legislation by some congressional heavy-hitters that would take us down this road.

First there was the "Federal Surface Transportation Policy and Planning Act of 2009," introduced in May by Jay Rockefeller (D., W.Va.), chairman of the Senate Committee on Commerce, Science and Transportation, and Frank Lautenberg (D., N.J.), chairman of the Subcommittee on Surface Transportation. Next, in June, came the "Surface Transportation Authorization Act of 2009," introduced by James Oberstar (D., Minn.), chairman of the House Committee on Transportation and Infrastructure.

Messrs. Rockefeller and Lautenberg aim to "reduce per capita motor vehicle miles traveled on an annual basis." Mr. Oberstar wants to establish a federal "Office of Livability" to ensure that "States and metropolitan areas achieve progress towards national transportation-related greenhouse gas emissions reduction goals."

What does this mean? Most travel is not for its own sake. So reducing the total miles traveled -- whether the length or number of trips -- means people would have to reduce the activities they want and need to do. People would be "coerced," in effect, to live in less desirable places or work in less desirable jobs; shop in fewer and closer stores; see their doctor less frequently; visit fewer family members and friends.

There are three likely ways this could work. The cost of travel could be increased by raising the prices of vehicles or fuel; travel time could be increased by not expanding the highway system; or superior alternatives to the private car could be developed. The most likely way to increase the cost of travel would be by increasing fuel taxes perhaps to as much as $4 per gallon, as some have suggested.

Allowing congestion to increase travel times would be politically easier. In the name of "multimodal planning," for example, road-use taxes could be diverted, as Messrs. Rockefeller and Lautenberg suggest, to "increase the total usage of public transportation." But public transportation (where it's available) typically takes twice as long as automobile travel, so it's not practical for many Americans.

Moreover, public transportation (passenger rail services, subways, buses, light rail) requires heavy subsidies, while roads mostly pay for themselves through fuel taxes. Our roads would be even more self-sustaining if 20% of the federal fuel tax were not already diverted to public transit from the federal Highway Trust Fund. Messrs. Rockefeller, Lautenberg and Oberstar want to grab even more money from the trust fund.

Americans have always valued their independence and mobility. One way to reassert their rights would be to abolish the misnamed Highway Trust Fund, which finances highway construction and maintenance. Let the states decide what roads they need and how to finance them. The present system expires on Sept. 30 unless Congress reauthorizes it. Let it die.
Sen. Kay Bailey Hutchison (R., Texas) has in this regard introduced the "Highway Fairness and Reform Act of 2009," which would explicitly allow states to opt out of the federal financing system. A companion bill has been introduced in the House.

If a significant number of states opted out of the federal system, it would collapse and responsibility for roads would revert to the states. The vast majority of road users would benefit from such a change. And, if "livability" standards were deemed desirable, local preferences would determine them, rather than federal "greenhouse gas emissions reduction goals."

Mr. Roth is a research fellow at The Independent Institute and editor of "Street Smart: Competition, Entrepreneurship and the Future of Roads" (Transaction, 2006).

Thursday, July 2, 2009

Fuel Standards Are Killing GM

Fuel Standards Are Killing GM. By Alan Reynolds
WSJ,Jul 02, 2009

Friday, June 5, 2009

Urban Mass Transit is not a National Problem

Urban Mass Transit is not a National Problem. By Bob Poole, Director of Transportation Studies, Reason Foundation

At a time of unprecedented federal deficits, the idea of expanding the federal government’s spending into what is basically a local issue requires a very high level of justification. The others who have posted on this blog, arguing in favor of federal funding for transit operating costs, have failed to meet that standard.

Merely desiring federal money and having something nice to spend it on is hardly a justification. Not when, according to the Government Accountability Office, “the federal government’s financial condition and fiscal outlook are worse than many may understand. Specifically, the federal budget is on an unsustainable path—raising questions about whether people should assume federal funds will be available to help solve the nation’s current infrastructure challenges.” (GAO-08-763T, May 8, 2008)

Recently-retired Comptroller General David Walker devoted much of his energy in recent years to calling on the nation to rethink the role of the federal government. A sensible rethinking should ask which functions are truly national in scope, such that they serve all Americans and can best be carried out at a national scale. National defense is one such function. The Interstate highway system is another.

The federal government got into surface transportation funding in the 1950s on an interstate-commerce rationale. And indeed, it would have been difficult to build the nationwide Interstate system without the federal funding mechanism of highway user taxes that redistributed funds from high-traffic states to lower-traffic states for that specific purpose. But urban mass transit is a local and sometimes regional function. Its beneficiaries are primarily those who use it and secondarily those in that urban area who receive secondary benefits (such as slightly less traffic congestion and miniscule improvements in air quality). There are no national benefits.

And it’s not as if no other means of transit funding are available. Local transportation sales taxes exist in a growing number of urban areas and are a robust funding mechanism. All of California’s urban counties have such “self-help” taxes, providing a larger share of their budgets than federal transit aid. There is considerable potential in real-estate value capture that very few transit agencies have even attempted to exploit.

There are also perverse incentive effects when cities and their transit agencies can get “free” federal money. In a growing number of cases, when faced with the choice of a very costly light rail project or a far more affordable bus rapid transit (BRT) project, being able to get a large fraction of the cost as a gift from Washington biases the choice toward the more costly alternative. If the cost of the project had to be raised locally, there would be stronger incentives for cost-effectiveness to play a major role in such choices.

Finally, there is the question of whose money it is. Currently, most federal transit funding comes from the transit account of the Highway Trust Fund. In other words, the source of that funding is motorists and trucking companies, paying what are supposed to be user taxes in order to have a high-quality highway system to use. Ever since the 1964 Urban Mass Transit Act, the fraction of highway user taxes that can be diverted to non-highway uses has been steadily increased. Yet study after study in recent years has documented the poor condition of our highways and bridges, and the horrible congestion plaguing urban roadways. Taking an even bigger slice of the pie for urban transit would condemn the vast majority of Americans—for whom cars and trucks are their only viable alternative—to ever-worsening highway hell.

Wednesday, June 3, 2009

Lessons from setting the freight railroads free

If Obama Had Carter's Courage . . . By HOLMAN W. JENKINS, JR.
Lessons from setting the freight railroads free.
WSJ, Jun 03, 2009

Barack Obama is no Jimmy Carter. The latter really did face the unraveling of an indispensable industry. Mr. Obama faces not a collapse of the domestic auto industry, but collapse of two companies miserable enough to have been extant in the 1930s when the Wagner Act was foisted upon the industry.

We have a second auto industry, founded after the political and legal system had thought better of mandatory unionization, born of foreign parents, mostly in the South. It's surviving the recession without extraordinary help.

In Mr. Carter's day, bankruptcies were scything through the railroad sector, hurtling toward a rendezvous with nationalization. Conrail, an amalgam of failed Northeastern lines, had already been taken over and analysts foresaw a $300 billion bill (in today's dollars) in the likely prospect that Washington would soon have to operate the rest of the nation's freight railroads.
A disaster must be truly sizable before Congress will correct its own errors -- and the railroads were such a case.

Rail executives and economists had been arguing since the 1920s, when competition from trucks and planes began to emerge, that comprehensive federal regulation had only distorted the industry's pricing, driven away investment, and made competitive adaptation impossible. But the argument had a new ring now that Washington would have to bear the political risk of operating and subsidizing the nation's rail services.

It still took some doing on Mr. Carter's part. When the bill stalled, a hundred phone calls went from the White House to congressmen, including 10 by Mr. Carter in a single evening. The bill essentially no longer required railroads to provide services at a loss to please certain constituencies. It meant going up against farmers, labor, utilities, mining interests, and even some railroads -- whereas Mr. Obama's auto bailout tries to appease key lobbies like labor and greens, which is why it can't work.

In his message to Congress, Mr. Carter warned of a "catastrophic series of bankruptcies" and "massive federal expenditure" unless deregulation was allowed to "overhaul our nation's rail system, leading to higher labor productivity and more efficient use of plant and equipment."
Involving Congress meant the plan had to be explained and rationally coherent -- features missing from Mr. Obama's contradictory auto policies.

In 1980, Congress passed the Staggers Act, ending a century of federal regulation and leading to the railroad industry's renaissance. Leo Mullin, then a young Conrail veep, would later look back and praise all involved for having the fortitude to recognize that salvaging the taxpayer's investment in Conrail meant more than fixing a single broken company -- it meant fixing a defective regulatory environment.

That fortitude is exactly what's missing today, as it was missing from Mr. Obama's statement on Monday, which attributed GM's failure to sins by everyone but Washington.

We're still waiting for the brave, original thinking that we were told Mr. Obama represented. Like Washington circa 1978, he has landed for once in a situation where something more than symbolism is required of him. He has finally glided into the land of the real, where the key measurable outcome is no longer whether an audience is glowing with self-approval when he leaves the room.

To wit, will GM become self-sustaining and profitable, as he promises, or a bottomless drain for taxpayer subsidies? (The same question applies to Chrysler and, likely, Ford, which may have only prolonged the Ford family's run at the top by mortgaging the company to the hilt just before the lending markets closed down.)

Nothing really will be solved, even by GM's bankruptcy, until Washington recognizes its own policy incoherence -- namely the impossibility of reconciling stiff fuel mileage mandates with gasoline prices set by the market, with a domestic labor monopoly, with a high degree of openness to international trade. (You can have three, but not four.)

It took 103 years after the Interstate Commerce Act for Congress to junk the regulatory apparatus that destroyed the railroads. To get rid of CAFE after only 34 years would be some kind of record -- if Mr. Obama had Mr. Carter's courage.

Let's face it: CAFE has done nothing to reduce gasoline usage or oil imports (car owners just end up driving more miles). In 34 years, not a whisper of testimony has come from any quarter that the policy actually works. It only causes U.S. manufacturers to make small cars and dump them at a loss on the public, subsidized with the profits of pickups and SUVs.

Detroit doesn't have to match the transplants in wages and benefits, but CAFE distorted what would have been the Big Three's natural path of adaptation to the natural fact of growing diversity in the marketplace with the arrival of foreign manufacturers. Detroit would have focused on market segments where it could compete profitably even with its higher labor cost -- on bigger, pricier vehicles where labor cost is a lower share of value added.

Unfortunately, Mr. Obama, that freethinker, took to the CAFE fraud like a bat to a belfry. He signaled his arrival on the presidential stage by sternly demanding higher mileage standards early in his campaign. The "change" candidate who might have broken with a generation of political cant about CAFE instead appropriated the fraud for his own careerist purposes.

That tangled web now catches him in a fatal contradiction as he pours tens of billions of taxpayer dollars into the failed business model that CAFE foisted on Detroit.

Monday, June 1, 2009

McGovern: We could defend ourselves with a military budget half the current size

My Advice for Obama. By George McGovern
We could defend ourselves with a military budget half the current size.
WSJ, Jun 01, 2009

Most Americans probably agree that we have elected a highly articulate, talented president in Barack Obama. He has also given us a potentially great Secretary of State in Hillary Clinton. It makes me proud to witness these two recent political rivals working together to strengthen and enrich America at home and abroad. Recognizing the major economic crisis our new leader has inherited, we must hope his proposed economic plan will be helpful.

I think it will. But as someone on the sidelines, may I suggest a few other steps?

First, why not order all U.S. troops out of Iraq and Afghanistan by Thanksgiving? They should be greeted at home with a duplication of the GI Bill of Rights that I enjoyed as a combat bomber pilot following World War II.

This means offering each soldier a college education at any school of his or her choice. In 1945, after completing my few remaining months for a Bachelor's degree at Dakota Wesleyan, I enrolled at Northwestern University and went all the way to a Ph.D. in history without any cost to me except hard work. Other veterans chose to buy a farm or start a business with low-cost, government-guaranteed loans.

We now spend $12 billion a month on wars in Iraq and Afghanistan -- two mistaken invasions that have increased violence and terrorism in the Middle East. For a fraction of what we are spending on these badly conceived interventions, we could fund a new GI Bill with full medical care for the tens of thousands of veterans who have lost legs or arms or suffered lasting nerve or brain damage.

The second step I would take is to ask Congress to shift half of our military budget to other sources of national security. For almost 50 years, American foreign and national-security policy were believed to require a military budget big enough to win wars against Russia, China and a smaller country such as North Korea simultaneously. We waged what was called a Cold War against an alleged "Sino-Soviet bloc."

As we now know there was no such thing as a bloc involving Russia and China. The relations between these two large communist nations could have better been described as a rivalry.
In his second term, Ronald Reagan met with Soviet leader Mikhail Gorbachev, who proposed that the two countries end the Cold War and the arms race. Reagan agreed, and the danger of war between the two nuclear giants has since subsided. As for China, no one any longer fears war with this most-populous, fast-developing country to which we have extended "most favored nation" trading status. It would seem that no nation now threatens us.

There is the terrorist danger, but this is not a military problem. Terrorism is a by-product of military weakness. The terrorist has no battleships, bombers, missiles, tanks, organized armies or heavy artillery.

The only significant terrorist attack on the U.S., on Sept. 11, 2001, was carried out by 19 young men from Saudi Arabia and Egypt armed only with boxcutters. They used these devices to intimidate the crews of four airplanes into surrendering control of their planes. The terrorists then suicidally flew the planes into buildings.

This event, which took place nearly a decade ago, dramatized the limitation of a huge military budget in assuring national security. Nonetheless, our military budget is higher than ever -- $515 billion annually, not including the cost of Iraq and Afghanistan.

This figure is greater than the combined military budgets of the rest of the world. We could defend ourselves with an arms budget half that size. If we directed the $250 billion we could save annually into national health care, improved education, a better environment and restoring our infrastructure, the nation would be more secure, better employed and have a higher standard of life. Or the savings might be used for annual reductions in the national debt.

To cut spending for more and more costly armaments and these two wars would require both common sense and a measure of political courage on the part of the president and Congress. Why? Because all 50 states have either a military installation or a defense contract or both. These create payrolls and jobs.

That is a major reason for investing an equal sum in the public programs suggested here, which should provide as many or more jobs than are now offered by surplus military spending. Much of the arms spending is for things that are capital-intensive but low on job creation. The reverse is true for public investment in such things as upgrading our decaying infrastructure, protecting the environment, providing quality teachers and schools, and improved health care.

Finally, I would like to see America build the fastest, safest and cleanest-powered railway system in the world. This nationwide system of passenger and freight rail service should be integrated with equally superior public transit facilities in our cities.

Very few Americans are in the market for a tank or aircraft carrier. There are many eager consumers for the world's best, fastest and safest rail and transit systems.

All aboard!

Mr. McGovern is a former senator from South Dakota and the 1972 Democratic presidential candidate.

Friday, May 29, 2009

LaHood, Secretary of Behavior Modification

Secretary of Behavior Modification, by Randal O'Toole
Secraty LaHood
Cato at Liberty, May 28, 2009

George Will recently accused Obama’s token Republican, Transportation Secretary Ray LaHood, of being the “Secretary for Behavior Modification” because of his support for programs designed to coerce people into driving less. Speaking before the National Press Club on May 21, LaHood pleaded guilty as charged.

In the video of LaHood’s presentation, he was asked if the administration’s “livability initiative” is really “an effort to make driving more tortuous and to coerce people out of their cars.” His answer: “It is a way to coerce people out of their cars, yeah.”

The next question was, “Some conservative groups are wary of the livable communities program, saying it’s an example of government intrusion into people’s lives. How do you respond?” His complete answer: “About everything we do around here is government intrusion in people’s lives.”

While these are certainly quotable, defenders of “livability” (code for “transportation by any mode but automobile”) would be quick to point out that all of LaHood’s examples are aimed at giving people choices other than driving: walkways, bike paths, streetcars, light rail. LaHood never mentions any actual techniques aimed at coercing people out of their cars.

Yet those coercive techniques are a major part of the livability campaign, as shown by Portland, Oregon, which LaHood touted as “the example” of a livability program. The most important of these techniques is to divert highway user fees to expensive forms of transportation that receive little use. Portland is deliberately allowing congestion to grow while it spends money collected from highway users on streetcars and light rail.

Not that Portland’s program is very successful. Despite spending more than $2 billion on rail transit since 1980, transit’s share of Portland-area commuting declined from 9.8 percent in 1980 to 6.9 percent in 2007. (The table says 6.5 percent but that includes the people who worked at home.)

Much of the money that Portland does spend on roads goes into “traffic calming,” a euphemism for “congestion building.” This consists of putting barriers in roads, speed humps, narrowing streets, and turning auto lanes into exclusive bike lanes. Portland’s official objective (see table 1.2) is to allow rush-hour traffic to grow to near-gridlock levels (”level of service F”) on most major freeways and arterials.

“People don’t like spending an hour and a half getting to work,” said LaHood. But if more congestion is a key part of “livability,” then a lot more people are going to be doing that under the administration’s plans.

Beyond not seeing anything wrong with government coercion, LaHood can’t see the difference between transportation systems that pay for themselves (such as the interstate highways) and transportation systems that require huge subsidies (such as streetcars and light rail). “If somebody wants to ride streetcars or light rail to work,” says LaHood, then it is up to the government to provide it for them.

What if someone wants to take a helicopter to work? Or a dirigible or rocketship or a personal limousine? Does LaHood really believe that, just because someone wants something, all other taxpayers should fund it?

When in Congress, LaHood was known as a “moderate Republican.” I guess that is a euphemism for “central planner in waiting.”

Thursday, May 21, 2009

A High-Speed Rail Mirage

A High-Speed Rail Mirage, by Randal O'Toole
This article appeared in USA Today on May 20, 2009

At first glance, President Obama's enthusiasm for building a high-speed rail network linking major cities seems like a wise move. On closer inspection, however, it is clear that the plan would cost taxpayers billions of dollars and do little to reduce traffic congestion or improve the environment.

Already California, Florida, Illinois and other states are applying for funds under the president's plan. But, except for rail contractors, Americans should find little reason to like this proposal.
Although every taxpayer would share the cost of these trains, high-speed rails are not about serving the common people. Instead, they are aimed at the elite. Japanese and French high-speed trains are attractive to tourists, but they're not heavily used by local residents. Residents of Japan and France on average ride their bullet trains less than 400 miles a year.


Pricey option

Amtrak charges a minimum of $99 for its high-speed Acela from New York to Washington, but only $72 for its conventional train. Fares for unsubsidized buses on this route start as low as $20 (including free Wi-Fi), while airfares start at $99. Only the wealthy and those whose employers cover the cost will pay the $99 rail fare.

Obama's 9,000-mile high-speed rail plan reaches just 33 states, yet the $13 billion he proposes to spend would cover about 2.5% to 25% of the cost, depending on how the system is built. In contrast with the interstate highway system, which paid for itself out of user fees, high-speed rail fares would not cover the capital costs and only part of the operating costs.

Most of Obama's plan should really be called "moderate-speed rail," as it would upgrade existing freight lines to run passenger trains at top speeds of 110 mph. At around $5 million per mile, the total cost would come close to $50 billion.

Not satisfied with moderate-speed trains, California says it wants half of all federal funds so it can build brand-new 220-mph rail lines. But it's unlikely other states will settle for the slower trains if California gets the faster ones. Building fast trains nationwide would cost at least $500 billion. (By comparison, and adjusting for inflation, the 47,000-mile interstate highway system cost about $425 billion.)


Little congestion relief

Besides the high costs, these trains do little to relieve congestion. "Not a single high-speed track built to date has had any perceptible impact on the road traffic" in Europe, says Ari Vatanen, a European Parliament member. California predicts its 220-mph trains would take just 3.5% of cars off of roads. California highway traffic grows that much every two years.

Moderate-speed trains would do even less. Nor would such trains be good for the environment. Amtrak diesel trains are only a little more energy efficient than flying or driving, and pumping those trains up to 110 mph would reduce their efficiency. Because planes and cars are growing 2% more energy-efficient per year, rail would fare poorly by such measures over the next 15 to 20 years.

Moreover, high-speed rail consumes enormous amounts of energy and emits enormous volumes of greenhouse gases. These would cancel out any operational savings over cars and planes.
Interstates paid for themselves out of gas taxes, and most Americans use them almost every day. Rail requires huge tax subsidies and would regularly serve only a small elite. Which is the better symbol for the America President Obama wants to build?

Historic compromise on tough fuel economy rules: 'Ford Might Not Survive'

'Ford Might Not Survive.' By Henry Payne
Planet Gore/NRO, May 22, 2009

Detroit, Mich. — Washington’s lap-dog press obediently wagged their tails yesterday at The One’s announcement that autos would have to achieve an absurd 35 mpg in six years (a 40 percent increase in little over one product cycle). Even the Detroit Free Press — which might ask whether the bankrupt industry in its backyard could afford government edicts that will increase their per vehicle costs from $2,500 to $8,000 — fell in line.“President Barack Obama announced a historic compromise on tough fuel economy rules,” gushed Washington reporter Justin Hyde, that “were a ‘harbinger of a change’ for Washington.”

The only dissonant note in the Free Press account was a stray thought about whether anyone would actually buy Obama’s dream cars. “The wild card remains consumers,” allowed the Freep. In a consumer-based market economy, consumers are a “wild card?”Fortunately, media watchdogs still exist.

Los Angeles Times reporter Jim Tankersley took the novel approach of calling sources to find that the “great victory” (as Obama pal Guv Schwarzenegger put it) reached by automakers, greens, and pols was not all hugs and kisses.In fact, Ford had cold feet about the deal right through the weekend. As the only Detroit company without a direct line to Uncle Sugar, Ford faces the massive costs of new mandates alone.

On Sunday, just two days before Obama’s big Rose Garden announcement, reports Tankersley, “a senior Ford executive said the company had run the numbers again and concluded it might not survive if it accepted the deal.”

Ford might not survive.

“In the end, with more number-crunching and another application of White House pressure, Ford did not bolt,” continued the Times report. And since we know the Obama adminstration threatened Chrysler secured debtholders into submission, “White House pressure” is a loaded term.

Whatever pressure was brought, Ford also likely got guarantees that it would have access to the 3 percent of cap-and-tax revenue Mich. Rep. John Dingell has negotiated as part of the upcoming energy bill.

In an industry where government wields unprecedented power, we need watchdog journalism.

The Times report also bucked its media brethren by actually talking to Republicans and the picture got even more chilling.

"These exact companies were fighting this . . . tooth and nail six months ago, and now suddenly they love it?" Rep. John Campbell (R., Calif.) said, accurately reconstructing the recent past. "No, they don't love it. This is what this administration is doing: This administration is autocratically forcing people to do whatever it wants."

Even Schwarzenegger pointed out the 800-pound Rottweiler in the room. "All of a sudden, the car manufacturers needed . . . the taxpayers' money," he said. "So in order to get that help, I'm sure that President Obama said: 'OK . . . here's what you need to do.' "

Translation: Let me make a deal youse Detroiters can’t refuse.

Wednesday, May 20, 2009

Bankrupt companies making 39 mpg autos. Are we nuts?

Car Crazy. WSJ Editorial
Bankrupt companies making 39 mpg autos. Are we nuts?
WSJ, May 20, 2009

At the end of his Rose Garden explanation yesterday of the new U.S. fuel-efficiency standards, President Obama remarked on the good that can be accomplished when we are "working together." The President may be getting ahead of himself. Watching the unlikely coalition arrayed behind him as Mr. Obama committed the U.S. to an astonishing passenger-car mileage average of 39 miles per gallon by 2016, it looks truer to say we are merely standing together in this adventure, for better or worse.

Mr. Obama's fleet-mileage partners yesterday included the two auto companies that have fallen into his arms, Chrysler and GM, still-independent Ford, the major foreign manufacturers, United Auto Workers chief Ron Gettelfinger, and beaming representatives from the Sierra Club, Environmental Defense Fund and the Union of Concerned Scientists.

All that's left to arrive at the President's new destination for the American way of driving are huge, unanswered questions about technology, financing and the marketability of cars that will be small and expensive.

Start with technology. The President's proposed standards would raise fuel economy goals higher and faster than even the National Highway Transportation Safety Administration believes is practical. Last year, NHTSA issued a proposed rule making that would have raised fuel economy to 32.2 mpg by 2015 for cars and light trucks combined. Its 376-page report notes that "the resources used to meet overly stringent CAFE standards . . . would better be allocated to other uses such as technology research and development, or improvements in vehicle safety."

The new U.S. fleet will almost certainly be made up of hybrids and electric cars. This comports with the explicit intention of the President and his environmental partners to back out fossil fuels. One may ask: Once Detroit is forced to build these cars, will free Americans want to buy them, at any price?

Unless we outlaw the bigger cars that recent sales figures have shown Americans prefer any time gas prices fall below $4 per gallon, Detroit will need help marketing these small vehicles. As GM's Bob Lutz put it not long ago, "Very few people will want to change what has been their 'nationality given' right to drive big and bigger if the price of gas is $1.50 or $2 or even $2.50. Those prices will put the CAFE-mandated manufacturers at war with their customers."

All solutions to this problem flow from Washington. One would be to give substantial tax subsidies to buyers. Another would be to impose a federal gas tax to jack up the price of gasoline to $4 per gallon and keep it there. This is the solution that keeps Europeans driving small cars with tiny engines. High gasoline prices have become a political third rail in U.S. politics, and the Obama Administration insists it isn't interested in subsidies or taxes.

That puts the burden back on the beleaguered auto makers. The Detroit Three already sell small cars at a loss to meet the current 27.5 mpg fleet average. The car companies may hope that if the whole industry is forced to move up the fuel-economy ladder, consumers will have no choice other than to buy these cars. But experience suggests companies that have specialized in making smaller cars, such as the Japanese-owned auto makers, are more likely to be able to sell them at a profit.

Mr. Obama said a lot yesterday about the promised benefits of all this for the environment but not much about return on investment for the auto sellers. These public goals notwithstanding, it still looks as if Ford, Chrysler and GM will be making cars they can't sell, or can't sell profitably. That might not be a problem if you're now Gettelfinger Motors. But still-independent Ford has private shareholders and creditors to answer. While GM and Chrysler attempt to meet the new standards with taxpayer money, Ford will have to do so on its own.

The real carrot the Administration offered the industry yesterday was a detour from the nightmare of state-mandated standards. California has been seeking a waiver from the Administration to impose its own higher mileage standards, and a number of other states have followed suit. The Obama national proposal indeed offers the industry what he called "consistency."

So yes, it is possible to see why this disparate group came together yesterday. The UAW may soon be the government's partner in ownership of GM and Chrysler, and it has a strong incentive not to bite the hand feeding it a huge equity stake in the car makers. Ford and the other foreign-owned auto makers, which will have to raise private capital to make changes that U.S. taxpayers will fund at Chrysler and GM, no doubt want to maintain their political viability by not standing athwart this regulatory steamroller.

We wish these folks luck "working together" with the Obama auto-design team. One thing seems certain by 2016: Taxpayers will be paying Detroit to make the cars Americans don't want, and then they will pay again either through (trust us) a gas tax or with a purchase subsidy. Even the French must think we're nuts.

Sunday, April 19, 2009

In Falls Church, a transit boondoggle - overall cost to taxpayers is an eye-popping $8 per ride

A Bus to Nowhere. WaPo Editorial
In Falls Church, a transit boondoggle
WaPo, Monday, April 20, 2009

EASING TRAFFIC gridlock in the Washington area isn't an either-or proposition. More mass transit is desperately needed, but buses and trains alone won't clear clogged roads. Transit projects such as the Purple Line, a light-rail line in Montgomery and Prince George's counties, are necessary, but so are road improvements, such as the widening of Interstate 66.
Yet sometimes transit advocates allow their zeal to obscure what is practical. Such is the case in Falls Church, where some officials continue to defend a bus system that is, by any measure, indefensible.

Falls Church is already transit rich. The 2.2-square-mile city has only 11,200 residents, yet is served by two Metrorail stations and Metrobus. There are few spots in the city that are more than a 20-minute walk from a Metro station. Yet, in the mid-1990s, city officials envisioned a fleet of technologically advanced, environmentally friendly buses that would feed into the Metro system. Officials were able to secure enough grants to launch a pilot program. When electric buses proved to be expensive and unworkable, the city acquired four clean diesel buses at a cost of about $250,000 each. In early 2003, the George bus system, named for the country's first president, started operating.

The buses, operated by Metro, are state of the art, but interest has been tepid. George has averaged only 70,000 trips annually, half of what was expected. That amounts to a measly 10 riders per hour of service, according to the Northern Virginia Transportation Alliance. Most of the outside grants have dried up, and George now costs $600,000 a year to operate, half of which is subsidized by the state. The 50-cent fare, which generates $18,000 a year, barely makes a dent. The overall cost to taxpayers is an eye-popping $8 per ride, compared to $1.20 per ride in Fairfax City and $2.08 per ride in Arlington. It would be cheaper, as the alliance has noted, for taxpayers to pay for a cab.

With a painful fiscal 2010 budget shortfall forcing Falls Church to freeze pay and reduce services, George is a luxury the city can't afford. There has to be a better way to spend $600,000.

Friday, April 17, 2009

Small Cars Are Dangerous Cars - Fuel economy zealots can kill you

Small Cars Are Dangerous Cars. By Sam Kazman
Fuel economy zealots can kill you.
CEI, Apr 17, 2009

The super-high efficiency minicar has become the Holy Grail for many environmentalists. But on Tuesday, a new study on minicar safety tossed some cold water on the dream. The Insurance Institute for Highway Safety (IIHS) reported that in a series of test crashes between minicars and midsize models, minis such as the Smart car provided significantly less protection for their passengers.

The tests did not involve the much ballyhooed mismatches between subcompacts and Hummers, but measured the effect of relatively modest differences in size and weight. Even though the Smart car and other minis such as the Honda Fit and the Toyota Yaris have fared relatively well in single-car crash tests, they performed poorly in these two-car frontal offset collisions. In the words of IIHS president Adrian Lund, "though much safer than they were a few years ago, minicars as a group do a comparatively poor job of protecting people in crashes, simply because they're smaller and lighter."

That difference is reflected in the real world. The death rate in minis in multi-vehicle crashes is almost twice as high as that of large cars. And in single-vehicle crashes, where there's no oversized second vehicle to blame, the difference is even greater: Passengers in minis suffered three times as many deaths as in large cars.

Given the nonstop pronouncements we've been hearing about the green promise of high-efficiency cars, these results were shocking to some. But not to IIHS. The Institute has long been reporting similar results from other tests, and its publications candidly advise that, when it comes to safety, larger and heavier cars are generally better.

That's not what advocates of higher fuel-economy standards want to hear. Greater weight may increase crashworthiness, but it also decreases miles per gallon, so there's an inevitable trade-off between safety and efficiency. A 2002 National Research Council study found that the federal Corporate Average Fuel Economy (CAFE) standards contributed to about 2,000 deaths per year through their restrictions on car size and weight. But amazingly, with the exception of IIHS, there's practically no one else providing information on the size-safety issue:

- Not the National Highway Traffic Safety Administration, which has a highly dubious track record on CAFE. In a 1992 lawsuit filed by the Competitive Enterprise Institute, and Consumer Alert, a federal appeals court found the agency guilty of using "mumbo jumbo" and "legerdemain" to conceal CAFE's lethal effects.
- Not the Environmental Protection Agency, which is about to become a major partner in setting CAFE standards. EPA is often fixated on minute risks, such as radon in drinking water, but don't expect it to admit to CAFE's dangers. Its official mission may be "to protect human health and the environment," but its operating philosophy seems to be "not necessarily in that order."
- Not Ralph Nader and his allied traffic safety groups, which are often CAFE's most energetic cheerleaders. Decades ago, Mr. Nader and his colleagues repeatedly warned of the hazards of small cars. The Center for Auto Safety's 1972 book "Small -- On Safety," noted "the inherent limitations" that "small size and light weight" impose on crashworthiness. But in the 1990s both Mr. Nader and the Center reversed their position. Why? Because CAFE presented them with a stark choice between more government power and more safety. They went for more power.
- Not Consumer Reports, which has consistently failed to mention the importance of size and weight in discussing how to choose a safer car. Though it is regarded as the information bible by many car buyers, not a single one of its annual auto issues in the last five years has touched on this topic.

As the National Research Council reported, the current CAFE program -- 27.5 mpg for passenger cars -- contributed to about 2,000 deaths. But driving is going to get even more lethal over the next decade: CAFE standards will be raised to a 35 mpg combined average for cars and light trucks. And with the notable exception of IIHS, information about those risks may be hard to come by.

Mr. Kazman is general counsel of the Competitive Enterprise Institute.

Wednesday, April 15, 2009

Thursday, March 19, 2009

Libertarian on high-speed rail

Trains Are For Tourists, by Randal O'Toole
NPR.org, March 19, 2009

When I went to Europe, I loved to ride the trains, especially the French TGV and other high-speed trains. So President Obama's goal of building high-speed rail in the United States sounded good at first.

But when I looked at the details, I discovered that — while high-speed rail may be good for tourists — it isn't working very well in either Europe or Japan.

Japan and France have each spent as much per capita on high-speed rail as we spent on our Interstate Highway System. The average American travels 4,000 miles, and ships 2,000 ton-miles, per year on the interstates. Yet the average resident of Japan travels only 400 miles per year on their bullet trains, while the average resident of France goes less than 300 miles per year on the TGV — and these rail lines carry virtually no freight.

Throughout the world and throughout history, passenger trains have been used mainly by a wealthy elite and have never given the average people of any nation as much mobility as our interstate highways.

Moreover, the interstates paid for themselves out of gas taxes and other user fees, while high-speed rail requires huge subsidies from general taxpayers.

Personally, I would much rather ride a train than drive anywhere. But I have to admit that automobiles are the most egalitarian form of travel ever invented. Throughout the developed world, people of all income levels regularly travel by car, while only a small number of people regularly ride trains. For example, the average American drives for 85 percent of their travel; the average European 79 percent — not much difference.

The environmental benefits of high-speed rail are also questionable.

President Obama's plan actually calls for moderate-speed rail:

110-mile-per-hour passenger trains sharing tracks with freight trains. These moderate-speed trains will mostly be Diesel-powered, and for safety purposes they will be heavy. By the time these trains start operating, both cars and airplanes will use less energy and emit far less greenhouse gases per passenger mile than the moderate-speed trains.

True high-speed rail — trains going 200 miles per hour or more — requires costly dedicated tracks: a national network would easily cost more than half a trillion dollars. Considering that both airplanes and cars are getting more fuel-efficient all the time, the environmental costs of constructing these lines will never be recovered in any operational savings.

True high-speed trains are electrically powered, but if that electricity comes from fossil fuels it will produce as much greenhouse gases, per passenger mile, as autos or planes. As we develop more renewable electricity, we would do better to dedicate that power to plug-in hybrids than to build expensive but little-used train lines.

We have a choice between a transportation system that everyone uses and that pays for itself, or one that requires everyone to pay for through their taxes but that is used by only a small elite. Which is the better symbol for the America President Obama wants to rebuild?

Randal O'Toole is a Cato Institute Senior Fellow working on urban growth, public land, and transportation issues.

Monday, March 2, 2009

Save Washington's Metro by Privatizing the System

Save Washington's Metro by Privatizing the System, by Randal O'Toole
DC Examiner, February 26, 2009

As Washington’s Metro lurches from crisis to crisis, including derailed trains and a $154 million deficit in next year’s budget, many see its troubles as a prime example of why transit systems across the nation need even more tax subsidies.

In fact, the Washington Metro is a prime example of the failure of our socialized transit model, and why transit systems should be privatized.

In 1964, most of America’s transit systems were private and the industry as a whole was profitable. Then Congress passed the Urban Mass Transit Act, not—as some believe—to help low-income people who couldn’t afford cars, but because railroads threatened to terminate money-losing commuter trains into Manhattan, Boston, Chicago, and Philadelphia.

Congress justified federal support for those trains on the grounds that some of them crossed state lines. Politically, however, supporting transit in those urban areas meant supporting transit throughout the country, whether or not that transit crossed state lines.

Washington, Atlanta and San Francisco then spent billions of dollars building new subway and elevated rail transit lines. These systems completely failed to live up to their promises, costing far more and carrying fewer riders than projected, and they did little to relieve congestion.

Yet transit agencies could not admit they had wasted billions of taxpayer dollars, so they proclaimed these lines to be great successes. Certainly, the people who ride them appreciate the heavy subsidies they receive, but the share of commuters and other travelers riding transit in these regions continued to decline.

For example, the 2000 census revealed that the Washington, D.C. urban area had gained more than 100,000 new jobs since 1990 and that virtually all those commuters drove to work.
Moreover, more than 21,000 commuters who took transit to work in 1990 switched to driving by 2000. You won’t hear that from Washington Metro officials.

Nevertheless, Congress opened the floodgates of federal funding for new rail transit lines, and the number of urban areas with expensive rail transit climbed from 10 in 1980 to nearly 40 today.

To cover the high costs of rail transit, many transit agencies ended up cutting bus service, contributing to declines in per-capita transit ridership.

Nor do transit officials ever mention that the cost of reconstructing rail lines every 30 years is almost as great as the original construction cost. Agencies invariably fail to plan for this cost and hope instead for federal bailouts.

The Chicago Transit Authority is "on the verge of collapse" as it needs $16 billion to rehabilitate its tracks and trains. New York’s Metropolitan Transportation Authority is in serious trouble because it is short $17 billion needed to rehabilitate its rail lines.

Washington’s Metrorail suffers increasing breakdowns because no one has found the $12 billion it needs to keep the system running.

Rail advocates argue that all transportation is subsidized so we should pay no attention to the transit subsidies behind the curtain. Yet transit subsidies are vastly out of proportion to other transportation support and have made transit the most expensive way to travel in the U.S.

Including subsidies, Americans spend 15 cents per passenger mile flying, 24 cents driving, and 80 cents on urban transit. While less than 4 percent of the cost of driving and less than 10 percent of the cost of flying is subsidized, three-fourths of the cost of transit comes from subsidies.

Contrary to conventional wisdom, all transit is not subsidized. Atlantic City, NJ, has a private bus system that runs 24 hours a day without subsidies. San Juan, Puerto Rico residents ride private buses known as públicos that carry more people, without subsidies, than the city’s tax-supported public buses and trains. Yet most American cities and states outlaw private competition to government’s monopoly transit systems.

We won’t fix transit’s woes by throwing money at it, especially not by building new rail transit lines, which will only impose huge obligations on future generations to maintain (or dismantle) those lines.

Instead, we need to return to a private transit model, allowing competing transit companies to provide innovative transit services that people will use at no cost to taxpayers.

Randal O'Toole is a senior fellow and author of The Best-Laid Plans: How Government Planning Harms Your Quality of Life, Your Pocketbook, and Your Future.

Thursday, February 12, 2009

Taxing fuels, vehicles, and passengers: EEA’s vision of ’sustainable’ transport

Taxing fuels, vehicles, and passengers: EEA’s vision of ’sustainable’ transport. By Marlo Lewis
Master Resource, Feb 10, 2009
http://masterresource.org/?p=817

Europe taxes gasoline at $3-4 a gallon, imposes the world’s most stringent fuel economy standards, and mandates the blending of biofuels into the region’s motor fuel supply. Yet European Union (EU) transport-sector greenhouse gas (GHG) emissions increased by 26 percent from 1990 to 2006, according to “Beyond Transport Policy,” a recent European Environment Agency (EEA) report. Why have these policies failed to reduce GHG transport-sector emissions?

The EEA report spotlights the unheard-of fact that the “key drivers” of demand for transport services are “external” to the transport sector. So despite what you’ve been told, people don’t drive around just for the heck of it, buy airplane tickets for the sheer thrill of flying, ship products or order deliveries just to make work for truckers, sailors, and airmen. No, most people use transport vehicles to shop, work, educate their children, vacation, or supply products to customers. And—horrors—they do these things “without considering the consequences on transport demand and greenhouse gas emissions”!

What this implies, of course, is that we cannot have what the EEA calls a “sustainable transport system” until politicians and bureaucrats control those pesky “external drivers”—the other economic sectors that generate the demand for transport services.

The EEA report provides detailed case studies on how three external drivers—food production and consumption, short-haul air travel for business and leisure travel, and education—increase emissions by increasing the demand for transport. Each study reveals what every sober adult should already know. Work causes emissions. Play causes emissions. Wealth causes emissions. Trade causes emissions.

In short, life causes emissions, especially where people are prosperous and free to work and play.

Let’s begin with food. Do grapes cause global warming? According to the EEA, importing a kilogram of grapes from Chile to Austria emits 7,410.8 grams of carbon dioxide (CO2), compared to only 8.8 grams for grapes grown closer to home. So if you’re an Austrian and you eat Chilean grapes, your carbon foot print is 842 times bigger than if you eat locally-grown grapes. But Europeans like fresh produce, and they can afford to import it year-round. How decadent! Why can’t they live like their noble ancestors and eat canned fruit in the winter, or simply abstain?

To counter the fresh produce peril, the EEA calls for a labeling program alerting consumers to the transport-based carbon-intensity of the food they eat. However, that would hardly be enough to instill in Austrians, for example, an aversion to Chilean grapes, South African apples, Spanish strawberries, Dutch tomatoes, or Israeli peppers. The logical next step—which the EEA recommends—is to impose carbon taxes “to internalize the external costs of transport.” Such tariffs would also keep lots of developing country produce out of European markets. The EEA proposal is protectionism by another name.

The EEA also bemoans the vicious circle created by prosperity and air travel. As Europe becomes wealthier, more economically integrated, and more connected to the global economy, more Europeans want to fly for both business and pleasure. This has led to an expansion of aviation facilities and infrastructure, with airports functioning not only as transport hubs but also as retail centers, conference and meeting venues, and accommodation facilities. By making flying more convenient and useful, these developments further increase demand for air travel. When will the flying end!

To mitigate this dastardly trend (never mind that accelerating the movement of goods, persons, and ideas enhances wealth creation—the foundation of all environmental improvement), the EEA recommends new carbon-based aviation fuel taxes, passenger duties, and landing fees. Well, what else did you expect?

Education is the third and last “external driver” examined in the report. Here’s the gist. Millions of parents would rather drive their kids to safe, high-quality schools across town than make the children walk or bicycle to underperforming, bully-infested schools nearby. The EEA report offers several antidotes to this malady, including cycle lanes, car pooling, “walking buses,” car-free action days (or weeks), consumer information, and improvements in public transport. Well, I don’t know about you, but if my son can get beat up and have his lunch money stolen at a school with a “walking bus” program, then I’m definitely going to enroll him there rather than drive him to a good school a few miles further from home.

Although the report doesn’t specifically mention taxes in this context, it states that “revenues from a carbon-based tax can be used to cover costs of cycling and walking infrastructure,” and opines that “people may be more favorable if they are given adequate information about what would happen without the tax increase.” Sure they will! ‘Monsieur Blanc, please fork over an additional €1,000 in motor fuel taxes or the Greenland Ice Sheet will collapse.” That doesn’t sound like a winning sales pitch.

Here’s the bottom line the EEA doesn’t want to face. Until somebody mass produces electric vehicles or alternative fuels that outcompete combustion engines or petroleum-based fuels, transport-sector CO2 emissions will continue to increase along with demand for transport services.

Although transport demand comes from “external drivers” on which transport policies have had little impact, the EEA report tries but fails to go “beyond transport policy.” The EEA’s default solution to the alleged problem of too many people driving, flying, shipping, and importing is the most boringly familiar transport policy of all–increase taxes on fuels, goods, passengers, and vehicles.

Thursday, January 29, 2009

Energy Reduction and Environmental Sustainability in Surface Transportation

Energy Reduction and Environmental Sustainability in Surface Transportation. By Samuel R. Staley, Ph.D.Testimony to the House Committee on Transportation and Infrastructure, Subcommittee on Highways and Transit, Massachusetts Joint Committee on Transportation
Reason Foundation, January 27, 2009

1. Overview

Chairman DeFazio, Ranking Member Duncan, members of the subcommittee, thank you for giving me this opportunity to discuss environmental sustainability and the future of transportation in the United States. This is a central issue as the federal government works toward its six-year authorization of transportation funding, and understanding the proper context for addressing environmental issues will be critical.

I would like to focus my remarks on two over-arching points:
  • Transportation policy that loses sight of mobility as a central goal puts our economic competitiveness at risk; and
  • Mobility is compatible with long-term goals of environmental sustainability.

2. Mobility and Economic Competitiveness

First, we must recognize the central purpose of transportation policy is to provide for and improve mobility for citizens and businesses. In other words, transportation policy is focused on finding effective ways to move people, goods, and services from point A to point B faster and cheaper. This central goal should not be minimized despite the more current concerns over the state of the national economy and the vigorous public discussion over the impending stimulus package. At the end of the day, transportation policy will continue to be about providing efficient, safe, and reliable mobility above all other policy goals or objectives, and the focus of reauthorization will inevitably move beyond the short-term politics surrounding the economic recession.

Importantly, mobility is the proper goal of transportation policy. Reason Foundation Vice President Adrian Moore and I explain the critical role mobility plays in ensuring our continued global competitiveness in our book Mobility First: A New Vision for Transportation in a Globally Competitive Economy. We summarize a growing body of research that shows empirically what urban economists have known for decades: Mobility is critical to national and urban economic success.

The reason is straightforward. Economic productivity improves when we lower the costs of production and make it easier for people to interact. Increased mobility gives workers access to an increasingly diverse number of jobs, and employers enjoy greater access to an increasingly large skilled and productive workforce. This is why congestion has such debilitating impacts on economic growth. As congestion increases, and costs of getting from point A to point B grow, production costs increase and the "opportunity circle" that includes access to markets, resources and jobs resources shrinks.

Thus, while transportation investments are critical to economic productivity and growth, job creation is an indirect impact of successful transportation policy and not a primary goal. This, in fact, is the lesson from the Interstate Highway program created in the 1950s. The central objective of this multibillion dollar program was to link the nation's largest urban centers and integrate them into a truly national transportation network. This goal served economic purposes as well as broader national goals of geographically unifying the nation (in much the same way railroads did in the 19th century) and providing for a more efficient national defense.

The economic impacts were enormous and tangible. The Interstate Highway System and upgrades to various state and regional roads boosted economic growth because these new roads reduced transportation costs dramatically, allowing businesses to improve productivity. Some of these effects, such as providing more efficient routes for long-haul freight movement, were intended. Reducing urban traffic congestion was another, less important goal successfully met, although few anticipated the decentralization of metropolitan areas that followed.

As we move forward thinking about transportation and sustainability, we also need to recognize the fundamental link between mobility, economic productivity, and economic growth.


3. Transportation and the Environment

The critical role transportation plays in economic growth and productivity does not obviate the need to consider the environmental consequences of our transportation investments, the environmental impact of different modes, or the way we use transportation facilities. On the contrary, as we become more aware of the environmental impacts of human activity, we have a responsibility to mitigate the negative effects. We have, for example, made tremendous strides toward improving our air quality even as our use of automobiles has increased dramatically. Air quality, by all metrics, has improved steadily in most U.S. urban areas since the early 1970s as a result of new technologies that lowered emissions while preserving the mobility implicit in automobile use. Indeed, rising economic productivity, and the increased wealth that comes with it, allows us to be even more creative and innovative in improving mobility in an environmentally responsible manner.

Thus, mobility and environmental protection can be complimentary goals. The key is to understand the right contexts in which these goals are pursued and choose strategies that allow for both to be achieved simultaneously. Environmental policy that explicitly or implicitly reduces mobility undermines the long term viability of our cities and national economy and, as a consequence, our ability to meet our long-term environmental policy goals.

A case in point is the role technology will play in meeting greenhouse gas targets. Preliminary findings of research being conducted by The Hartgen Group for Reason Foundation indicates that newly legislated fuel mileage standards will outstrip most other commonly proposed strategies for mitigating carbon dioxide by large margins (see Table 1). In an analysis of greenhouse gas trends in 48 urbanized areas, current trends suggest that without mitigating strategies, CO2 will increase 52 percent by 2030. The new CAFÉ mandates recently enacted by Congress will reduce CO2 by 31.2 percent by 2030. In contrast, increasing the price of fuel to $5 per gallon would only reduce emissions by about 4 percent. The combined effect of increasing the transit share of work trips by 50 percent, increasing the walk to work share by 50 percent, and increasing telecommuting would reduce CO2 emissions by just 2.5 percent.

Notably, the new fuel mileage mandates are also more cost-effective, averaging about $52 per ton removed, and meet the McKinsey & Company benchmark reported in Reducing U.S. Greenhouse Gas Emissions: How Much at What Cost? In contrast, most other strategies are significantly more costly. Physical capacity improvements, increasing transit's mode share, and reducing overall travel by raising the gas tax are expected to cost close to (or more than) $4,000 per ton removed.


4. Environmental Mitigation Strategies and Mobility

Each of these greenhouse gas mitigation strategies has different impacts on mobility and, as a result, on our nation's productivity. Increased fuel mileage mandates do not impact our nation's mobility although they have somewhat smaller impacts on the costs of using specific types of cars and trucks. If the mandates are modest and provide enough of a lead time, they can allow consumers and private suppliers to make choices about what technologies and modes of transport are most efficient for achieving transportation goals. This, combined with the independent decisions of millions of Americans to purchase more fuel efficient automobiles, can increase productivity and mitigate greenhouse gases.

In contrast, policies that attempt to directly reduce travel have an adverse impact on mobility and impinge on our economic productivity by reducing the opportunity circles accessible by employers, workers, and households.

A few quick illustrations make this point. Portland, Oregon's Tri-Met operates perhaps the most successful rail transit system in place among mid-size (and smaller) U.S. cities. Sixty-four light rail transit stations are part of a regional transit network that covers an urban area of 474 square miles and serves 1.2 million people according to the National Transit Database. Yet, these transit stations account for just 22 square miles, or about 5 percent of the regional service area. Even with the more compact urban form created in part by a mandated regional growth boundary, Tri-Met's ability to influence regional urban form and travel patterns is limited to the immediate area around the transit stations.

Arlington, Virginia provides another example. Arlington hosts some of the nation's most robust transit-oriented developments, using a large volume heavy rail system to support development at Metro stations around Ballston and Courthouse Square on the Orange Line and Pentagon City and Crystal City on the Blue Line. The eleven Metro stations represent about 8 percent of the county's land area. About 20 percent of the county's population lives within walking distance (1/4 mile) of one of these Metro stops. Among those within walking distance, however, the private automobile still captures more than half, and often two-thirds or more, of total trips. Thus, in Arlington, rail transit is used by just 5-10 percent of the county's population. Notably, transit's share of total travel in the Washington, DC urban area remains around 7 percent.

The point, however, is not to criticize transit. On the contrary, transit plays a vital role along key corridors in many urban areas and enhances mobility for many. Rather, transit's role in meeting environmental policy goals needs to be kept in context.

Despite recent gains in ridership, public transit remains a relatively small part of the overall travel equation in most major urbanized areas in the U.S. Notably, higher gas prices contributed to a reduction in road travel by 100 billion vehicle miles traveled in 2008, according to the Federal Highway Administration, a fall of about 4 percent. Public transit experienced an increase of about 5 percent. Yet, because transit carries a very small portion of travel, transit was able to capture just 3 percent of the overall decline in road travel.

In addition, the kinds of policies that will be necessary to fundamentally change land use to boost transit ridership significantly would require a dramatic and largely involuntary relocation of people and families into housing they do not want. The single-family, detached house would be an option only for the wealthier income brackets in our major urban areas, effectively inverting the existing distribution of home options and choices.

A policy that focuses largely on shifting travelers out of cars and into transit will reduce mobility. An examination of work trip travel times in 276 metropolitan areas found that the length of public transit trips exceeded those for private automobiles in 272 of those areas. On average, public transit riders spend about 36 minutes traveling to work while private automobile travelers commute about 21 minutes. This does not have to be the case. The innovative use of HOT Lanes, such as the networks being built in Northern Virginia and discussed in Atlanta, Houston, the San Francisco Bay Area, and Miami can finance critically needed road capacity while also providing viable bus rapid transit alternatives.


5. Sustainable Transportation Policy

Sustainable development policies call for a balancing of three goals: economic growth, the equitable use of resources, and environmental preservation. Transportation policy that undermines mobility compromises the productivity necessary to support better environmental stewardship.

What federal policy initiatives, then, can preserve the overarching goals of transportation policy to improve mobility while also recognizing the importance of meeting environmental goals?

First, achieving environmental goals will depend primarily on technological solutions, not broad-based changes in human behavior. The dramatic improvements in air quality in major urban areas is directly attributed to technological solutions, and the same will be true for addressing national greenhouse gas goals. Federal policymakers should resist attempts to directly use transportation policy to address broader environmental goals because it tends to be a very blunt and inefficient instrument.

Second, maintain mobility as the central goal of transportation policy. Policies that directly reduce mobility, including those designed explicitly to reduce vehicle miles traveled or direct commuters to alternatives that will lengthen commute times, should be avoided. While environmental concerns should play a role, federal objectives should include searching for and implementing win-win solutions.

Third, continue to put congestion reduction as a key priority for transportation policy and investments. Widespread traffic congestion places substantial burdens on businesses and individuals. Mitigating these effects should be a primary goal of transportation policy makers to ensure our cities and national economy remain competitive. Many congestion-mitigation strategies-HOT lanes, tolled facilities, capacity expansion-will also have environmental benefits, but their central purpose is to reduce transportation costs and improve economic productivity.
Fourth, aggressively move toward a transportation funding approach based on distance-based financing such as comprehensive road pricing. This approach would establish a more direct, transparent and accountable user-based funding system.

Thank you for your attention. I welcome any comments or questions members of the subcommittee may have.

Sam Staley is director of urban policy at Reason Foundation. He is co-author of Mobility First: A New Vision for Transportation in a Globally Competitive 21st Century (Rowman & Littlefield, 2008). An archive of Staley's work is here, and Reason's transportation research and commentary is here.

Monday, January 5, 2009

TNYT Editorial: A Pitch for Mass Transit

TNYT Editorial: A Pitch for Mass Transit
January 5, 2009, page A20

Unlike President Bush, Barack Obama is going to enter office with a clear appreciation of the urgent problems of climate change and America’s growing dependency on foreign oil — and a strong commitment to address both.

One way he can do this is to give mass transit — trains, buses, commuter rails — the priority it deserves and the full financial and technological help it needs and has long been denied.

Mass transit has always played second fiddle to the automobile, so Mr. Obama will need strong allies. Ray LaHood, Mr. Obama’s choice for transportation secretary, must be not only an ally but a champion for mass transit. Mr. LaHood is a Republican and former member of Congress from rural Illinois, where farmers produce a lot of ethanol and where people mostly drive. His résumé on transportation issues is thin, and we fear he may need some coaxing in this new direction.

Another important ally should be — and almost certainly will be — James Oberstar, a Minnesota Democrat who is chairman of the House Transportation and Infrastructure Committee.

For years, the division of transportation money in Washington has heavily favored cars and trucks — more than 80 percent of the big transit money from gas taxes goes to highways and bridges, and less than 20 percent to railroads or mass transit. Mr. Oberstar is leading the charge to change that formula and divide this money a little more evenly. This will not be easy. Automobiles will be with us a long time, and old spending habits die hard. But as part of the stimulus package now under discussion for transportation, Mr. Oberstar is proposing $30 billion for highways and bridges and $12 billion for public transit. That is certainly a far healthier mix.

The new administration could further help mass transit by shelving the unfair “cost effectiveness index” that President Bush put in place several years ago for new transit programs. The net effect of this index was to make it easier to build highways and almost impossible to use federal money for buses, streetcars, light rail, trolleys — indeed, any commuter-rail projects.

For Mr. Obama’s transit agenda and for Mr. LaHood, the next big challenge will be a transit bill that Congress must pass by September. Mr. LaHood is widely praised for his management skills and his ability to work well with others. Those abilities will certainly be needed if he and the Congress are to find and then finance the best, the most-efficient and the most-advanced ways for Americans to move around.