Transportation, climate change, and economic growth

I went to a panel discussion last night on “Merging Climate and Transportation Policy”. There were panelists from roughly the political left, right, and center, but all were thoughtful, had many good points, and agreed that the current system for spending federal transportation dollars is terrible. A lot of discussion about transportation and climate change tends to focus on technological fixes, like electric cars or biofuels, but this one focused on reducing driving — essentially changing behavior. The center and left panelists seemed to be boxing at the shadow-accusation that any such attempt is “social engineering”, largely by arguing that putting the right price on driving (i.e., making it significantly more expensive) isn’t about changing behavior, it’s about letting people make the right choices.

Well, prices changes behavior. That’s the point. There is some psychological value to giving people options, even ones they can’t afford, as opposed to mandating something (“You can only drive on odd-numbered days”), but it’s still about changing behavior. We know that raising the price of driving causes people to do it less (cf. recent increases in gas prices and subsequent fall off in car travel), but it’s not a terribly strong effect. If we want big reductions, like cutting miles driven in half, it’s hard to imagine that just pricing people out of their cars ($15 gas?) will be acceptable. I’m convinced the much more powerful (and palatable) tools will be land-use planning, making urban cores more attractive places to live (e.g. by improving urban schools), and cultural shifts toward valuing neighborhoods and urban features.

One of the interesting questions that came up was, “will policies to reduce miles driven also suppress economic growth?” This is something the right and center panelists were very concerned about. And actually, it’s hard to see how a pricing-based policy wouldn’t. There could be some rebound effects, like a more vibrant commercial economy if congestion-pricing makes the city more pleasant to shop and do business in. Or perhaps everyone would save fuel on balance because congestion-pricing eliminates gridlock. However, the main effect of charging more for driving is that people have less money to spend on other things. But let’s think about the other types of policies — the ones that get people replacing cars with transit and living closer to things. Offhand, I would say the economy becomes more service-oriented. People go out to eat more, spend more on cultural attractions, meet each other in bars and so on — the classic urban lifestyle model. They have smaller houses which they spend less to fill with things and, or course, less on cars. Bad for the economy? It’s not obvious, but I’d guess it’s better for communities to have more-local economies in the long run. Another direction it might go is that car travel gets expensive/unpleasant but the alternatives aren’t great either, so people just stay home. Probably yes, this would slow economic growth. Although that shouldn’t be the question. Are people less happy? Spending more time with the family and less time commuting to far-flung jobs is not bad. Staying home to watch tv and get isolated and depressed, on the other hand, probably is bad. So there is a right way and a wrong way to reduce driving. I expect that the strategies based on building vibrant communities support both economic growth and movement to a service-based economy that is better for the environment and connects people with each other.

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