Common Tragedies

Thoughts on Environmental Economics

The future of transportation

Posted by Daniel Hall on February 12, 2008

Econoblogger Megan McArdle has a new podcast up in which she interviews her father, Frank McArdle, a member of the National Surface Transportation Policy and Revenue Study Commission, which issued their report last month. Mass transit enthusiast and CT-favorite Ryan Avent participates. Here are a few highlights, notes, and impressions:

(Update: Make sure to read the comments, where two-thirds of the podcast has dropped by and contributed additional thoughts.)

1. Frank makes the great point early on that transportation funding is disappearing in the U.S. because we’ve been unwilling to raise the gas tax — which is the major source of transportation funding — meaning that funding has declined significantly in real terms.

2. It takes a ridiculously long amount of time to get new construction approved. Listen to Frank’s example of trying to add two lanes to I-95 up and down it’s entire length. It’s a project that would essentially never be done.

3. In discussing the report’s recommendations Frank makes it sound as if they recommend blowing up the current system for approving transportation projects, and essentially starting over. This made me want them to go back and discuss Ryan’s initial question: How likely are these recommendations to be implemented? It’s a little hard to imagine the system changing as much as Frank makes it sound like it should. What is the recommendation for making improvements at the margin? I would have liked to hear more discussion of this.

4. They spend a lot of time talking about what works and what doesn’t in mass transit in cities, using New York and DC as case studies in particular. The coverage of the history of the New York City subway is particularly interesting, because it illustrates that building transit is never particularly popular and it’s very hard to predict how valuable it will be in the future. Millions of modern New Yorkers would be very unhappy if the many thousands (or perhaps millions) of former New Yorkers who opposed the subway had gotten their way.

5. This leads to the reflection that in a general-equilibrium (i.e., real) world, mass transit is likely more valuable than it appears ex ante, and roads less. People are generally bad at predicting the second- (and third-, and fourth-) order effects that emerge in response to a change; we view things mostly through a static lens. But we have a century of history that suggests we will like the outcome of more free roads less than we think.

6. Against this you can argue (as they do in the podcast) that New York had a chance to optimize it’s development of both transit and zoning around the same time. As Frank points out, transit is a means, not an end. This makes the malleability of existing development and zoning an important question: how long does it take to reshuffle the existing “development” stock, particularly for areas that developed after the automobile? Based on this evidence, how valuable is an investment in transit, and what is your pay-off period? If it is less than 50 years it may look like a bad deal. DC might be a test case for this, although Megan argues that DC’s street-car heritage made it amenable to the post-automobile installation of a subway system. But surely you could look at what is happening with density along the rail lines out in the suburbs and away from the core to try to get at an answer about the transit-induced shifts in development?

7. I have got to admit I am more pessimistic about the future of transportation in the U.S. after listening to this. I do not think big changes in policy are likely. My hope is now in driverless vehicles that rely on GPS navigation and centrally-controlled routing to optimize load on the road grid and simultaneously increase speeds and flow density while reducing accidents and congestion. Make these cars battery-powered and you can hopefully reduce all your externalities at the same time: congestion, accidents, pollution, and energy security.

8. Ryan has a great voice for radio! He sounds like somebody on NPR, but I can’t think of who at the moment. Maybe he can convince his other blogging gig to give him some kind of opportunity to be on the mic in future.

3 Responses to “The future of transportation”

  1. ryan said

    I’m blushing over here. If only I could get a thought out without sixteen “you knows.”

    I think a lot of people who follow these topics are beginning to think that the combination of electrification and autonomous vehicles may pave the way for a private car mass transit system. The questions I think are important about this are: 1) Are the efficiency gains really going to be enough to make this worthwhile? And 2) Is this going to primarily be a private venture?

    If you maintain current settlement patterns, you’ve still got a ton of vehicles traveling a lot of miles everyday. That’s a lot of expensive energy (especially if we’re pricing carbon). It would be nice if private interests would slowly push us toward this, but the centrally-controlled aspect makes that somewhat unlikely. If you’ve got the government coordinating and building infrastructure for this huge system, then why not just have them build transit?

    But who knows. I’m a terrible futurist.

    And thanks for listening.

  2. Daniel Hall said

    If you’ve got the government coordinating and building infrastructure for this huge system, then why not just have them build transit?

    Ryan, I didn’t want my point at the end to make it sound like I was giving up on mass transit. Rather, I was trying to express — poorly I admit — that we need get more out of existing systems. Not because we shouldn’t build more infrastructure, but that after listening to this conversation I think most people will wonder whether we can, at least in anything like adequate levels.

    I think we also have to be realistic about what mass transit can accomplish. I grew up in Dallas, and by most accounts the light rail system there has been a pretty major success, especially considering that Dallas is a city that did a lot of suburban development based on highways and the automobile. But given Dallas’ enormous existing stock of highways, if we could figure out how to utilize those more efficiently then that could make a bigger difference than 50-100 miles of light rail track (as helpful as it has been).

    I wonder if the foot-in-the-door for these autonomous vehicle systems may be HOV/HOT lanes and their subsequent evolution. Imagine dedicating an existing highway lane to autonomous vehicles. You could even run this system privately: perhaps Zipcar expands their business model to include suburban commuters that hop into an auto-piloted vehicle. It’s easy to imagine that with GPS and a dedicated lane you could pretty easily increase speeds, flow density, and safety all at the same time. (Which I think will be required for public acceptance.) This is one possible development path I can imagine for the “private car mass transit system.”

    In terms of the cost of energy — particularly under a carbon pricing regime — I think electrification is going to look better and better going forward, particularly if we start correctly pricing in the costs of land-use change for producing biofuels. I think it’s looking like we can decarbonize the electricity sector much more cheaply than we can the liquid fuels sector.

    In summary, here are a few things I should have added to my post:

    9. We absolutely should be pricing in externalities to the costs of driving. We essentially give roads away right now: the gas tax is far below the level needed to maintain transportation needs. There should comprehensive congestion pricing, which would get us a long ways towards funding transportation, and we should price carbon.

    10. Revenues from these pricing mechanisms should be re-invested where they will produce the most social benefit, not necessarily where they are collected. In most major urban areas this will mean congestion pricing on roads will be cross-subsidizing mass transit.

    11. However, we must also acknowledge that mass transit infrastructure is not going to do it all and that there could be a lot of gains from using our road system in new ways, a la these car/mass transit hybrid systems that use existing roads.

  3. Frank McArdle said

    One further point should be considered in all of this,as it was by the Commission. Freight and goods movement issues are just as significant as the people moving issues when you look to the future.If,over the next 50 years, we double our per capita GDP through productivity improvements, we are likely to increase our demand for goods movement trips in proportion. That means trucks for trips under 750 miles ( rail doesn’t really want the shorter trips at current yields).While there are multiple mode options for people ( walk,bike,drive, bus,etc)depending in part on residential/job location choices, freight usually doesn’t have options.

    If you also believe that it will be very difficult to build new arterials and Interstate segments in metropolitan areas such as New York and LA and DC, increasingly the existing road capacities will have to be reserved for the growth in goods movements and alternatives that are comparable will have to be found and developed for the people trips. That will be the key challenge and why the Commission has proposed national performance standards and freight and metropolitan mobility programs that are ‘ mode neutral’ to promote effective management of the shift of passenger trips.

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