post

Reconciling Economics and Ecology

G. Tracy Mehan offers an insight into the PERC Lone Mountain Forum: “Reconciling Economics and Ecology: The Foundation of Environmental Optimism,” currently being held at the PERC University Campus in Bozeman, Montana.

By Tracy Mehan

We are into the second session on “Reconciling Economics and Ecology,” under the guiding hand of the estimable Terry Anderson with a phalanx of experts and commentators from many disciplines. At this stage attempting any kind of synthesis would be presumptuous at best. The discussions have been informative, wide-ranging and heartfelt on the convergence and divergence of economic and ecological thinking.

The discussion on whether or not human beings are part of nature was truly stimulating if inconclusive. I recall the novelist Walker Percy’s observation that the scientist can know or understand everything but the scientist. Similarly, human beings can be both a problem and a solution to the challenges of reconciling economic growth and ecological function.

The noted writer, Matt Ridley, made what may be the one observation with which most attendees, including yours truly, might concur: both economist and ecologists, at least the right thinking ones, no longer believe in equilibria in either realm and view both systems as being dynamic, not chaotic, systems.

The conversation continues.

Update: Emma Marris, author of Rambunctious Garden, led the forum in a spirited discussion on ecology and future policy directions.  She emphasized the challenge of managing ecosystems in the face of uncertainty in a dynamic world including globalization and a changing climate.

Emma highlighted adaptive management as key along with the recognition that historic baselines no longer occupy any “moral high ground.”  She raised the question as to whether or not regulators will be as adaptive as the changing ecosystem demands which would challenge regulated property owners as well.  She also raised concerns as to whether or not “everyone gets a vote, not just every dollar” and that future generations count, too.  She expressed her bias for longer time scales in ecosystem management which drew many questions as to why this should be normative.

Many other participants raised issues of politically managed ecosystems versus private choice and management.  There was also lively debate over whether costs should be involuntarily imposed on property owners and taxpayers to involuntarily protect endangered species.

Emma expressed her agreement with the idea that richer is generally greener and that would actually impel us toward actions for the benefit of future generations which will be both.

This gives you just a taste of what was a very important discussion and debate over future policy directions.  Emma generally defended collective or community action against a preference of others for individual and voluntary actions or contractual approaches.

More to come.

Update #2: Earlier this week, Steven Hayward sat down with Charles C. Mann to discuss his work on pre-Columbian societies:

G. Tracy Mehan, III, was Assistant Administrator for Water at the U.S. Environmental Protection Agency, 2001–2003. He is a consultant in Arlington, VA, and an adjunct professor at George Mason University School of Law.

post

Dispatches from “Conservative Visions of Our Environmental Future”

Today I am at Duke to participate in a conference on “Conservative Visions of Our Environmental Future,” sponsored by the Duke Environmental Law and Policy Forum, Nicholas Institute for Environmental Policy Solutions, Nicholas School for the Environment, Duke Federalist Society, Duke College Republicans and the Energy & Enterprise Initiative. The conference is being live streamed here, and I’ll be offering comments on the proceedings below.  [Read more...]

post

The Wealth of Indian Nations

Stories of my ancestors interacting with families of the Northwestern Shoshone tribe enthralled me as a girl. The idea that the native people were self-sufficient and often helped the early settlers survive by trading goods, such as animal skins, and by sharing their knowledge of water sources and hunting grounds was inspiring. Today, however, many “First Nations” are stuck in a welfare state. PERC’s latest issue of PERC Reports looks at past and present trends in indigenous life, shining a light on how property rights and individual initiative can help create a higher standard of living and improve environmental quality on reservations and beyond.

PERC president TERRY ANDERSON points out that American Indians and First Nations people can reach back into their rich cultural heritage and find institutions that rewarded individual initiative. The key is for tribes to take this initiative again and for Congress to give tribal nations the rights that were once theirs.

Why is it that reservations are so poor asks JOHN KOPPISCH with Forbes. People are quick to point to alcoholism or underdeveloped land, but as Koppisch wisely writes, “those are just the symptoms. Prosperity is built on property rights, and reservations often have neither.”

Tribal governments can help solve the poverty problem. ROBERT MILLER draws on his experience as Chief Justice of the Grand Ronde Tribe and as a citizen of the Eastern Shawnee Tribe to explore how native governments can establish the laws and court systems necessary to attract investment.

In the past, native nations built their economies via extensive trade networks. Arctic tribal historian, JOHN BOCKSTOCE, reveals how the Eskimos and Chukchi in the greater Bering Strait region had been trading for thousands of years before the Russian and American trading vessels arrived.

Beyond North America, IAN BOISVERT, with BlueSky Mediation & Law and a former PERC graduate fellow, introduces the idea of “Tradable Occupation Rights” for the Maori in New Zealand. Creating these rights would offer both commercial and customary ocean users a market to resolve conflict and promote more efficient uses of resources.

This special issue of PERC Reports is made possible by the generous support of the M. J. Murdock Charitable Trust. PERC is continually grateful for their investment in tribal issues and free market solutions.

post

Sackett v. EPA and the Due Process Deficit in Environmental Law

Last term, in Sackett v. Environmental Protection Agency, a unanimous Supreme Court rejected the EPA’s effort to deny private landowners an opportunity to challenge the agency’s assertion of jurisdiction over their land. The Sacketts wanted to build a home in a subdivision, but the EPA concluded the Sacketts’ land to contain jurisdictional wetlands under the Clean Water Act and issued an order requiring the Sacketts to cease construction of their home and undertake specified restoration efforts. Failure to comply with the order was itself punishable with substantial fines, in addition to any for violating the CWA. The Sacketts sought judicial review of the order, on both statutory and constitutional grounds, to no avail in the lower courts. They prevailed in the Supreme Court, however, completely on statutory grounds, leaving the due process questions to another day.

The Court based its decision on the Administrative Procedure Act’s presumption in favor of judicial review of final agency actions and the CWA’s failure to expressly preclude such review. But what if the CWA had precluded review? Would the Sacketts have been entitled to judicial review under the Due Process Clause? And more broadly, given the uncertainty surrounding the scope of federal wetland regulation, and the lack of fully enforceable jurisdictional regulations, does current CWA enforcement more generally comport with the principles of due process? I explore some of these questions in a forthcoming article in the Cato Supreme Court Review“Wetlands, Property Rights, and the Due Process Deficit in Environmental Law.” The abstract is below.

In Sackett v. Environmental Protection Agency a unanimous Supreme Court held that private landowners could seek judicial review of an Administrative Compliance Order issued by the Environmental Protection Agency alleging that their land contained wetlands subject to regulation under the Clean Water Act. The Court’s decision rested on statutory grounds, but the same result may have been dictated by principles of due process. Under the CWA, federal regulators have asserted authority over waters and dry lands alike and sought to expand federal jurisdiction well beyond constitutional limits. Under existing regulations, landowners have little notice or certainty as to whose lands are covered, under what authority, or with what effect. As a consequence, federal wetlands regulations, as currently practiced, violates important due process principles.

Cross-posted at The Volokh Conspiracy.

post

Enviropreneur Showcase: GreenFaith

In an era of increased environmental degradation and strife, PERC Enviropreneur Institute (PEI) alum Reverend Fletcher Harper and his organization GreenFaith offer a unique look at environmental solutions and activism. Established in 1992 as a small and local organization in New Jersey, GreenFaith has grown to national proportions as an inter-faith environmental organization working with diverse religious groups to promote and mobilize environmental leadership.

Although religion and the environment may initially seem odd bedfellows, Harper is one among many* working to reclaim environmental stewardship as an integral part of the world’s religious traditions. Deep connections between religion and the environment already exist. For example, most of the world’s religions recognize the natural world as a source of revelation or site of sacred presence. Although presented in a variety of ways, human stewardship of this divine creation is part of the religious practitioner’s job description.

While hard science is needed to predict and study the physical properties and changes of the earth, anthropogenic environmental problems also require a close study of the beliefs and actions of those driving the environmental change. GreenFaith is calling on environmental leaders to not only preach good environmental standards, but to act on them. Through the GreenFaith certification program, congregations across the nation have reduced carbon emissions by 30 to 50 percent, financed solar energy programs, and decreased water consumption, to name a few.

GreenFaith has used lessons garnered from PEI to attract new congregations to their certification program by touting the benefits of financial savings. Economic incentives are therefore a major driving force in the “greening” of congregations. Harper points out that economics and religion, counter to popular belief, really are working toward the same objective: human flourishing.

“In the end, GreenFaith isn’t just about teaching people that God wants a healthy environment,” said Harper. “It’s about mobilizing the faith-based sector – one of the largest social networks in the country – to make it actually happen. PERC has helped us understand new tools and perspectives on how to achieve this goal.”

*See the Yale Forum on Religion and Ecology for further reference

post

Is Organic Food Healthier or Safer?

A new study fails to find scientific support for claims organic food is healthier or safer than conventional alternatives and everyone acts as if this is a surprise. It shouldn’t be. Scientific research has fairly consistently failed to validate the claimed superiority of organic food, as I’ve noted in prior posts over the past ten years (see, e.g., herehere, and here). Organic foods do not consistently show higher nutrient levels than conventional foods, nor are there even clear environmental advantages. Organic farming uses less energy and fewer chemicals, but it also tends to be more expensive and requires more land — meaning that a widescale shift to organic production would increase food costs and require putting more acres under plow, with consequent negative effects on species habitat.

For this latest study, published in the Annals of Internal Medicine, Stanford researchers conducted a meta-analysis of over 200 studies looking at the differences between organic and conventional foods, and concluded “the published literature lacks strong evidence that organic foods are significantly more nutritious than conventional foods.” Organic foods tended to have lower pesticide residues and were less likely to have antibiotic-resistant bacteria, but the researchers concluded the differences were not significant enough to have any meaningful health impact. If organic food truly is healthier — and it may be — the existing scientific literature cannot (yet?) support such claims, particularly as applied to organic foods across the board. There may be specific foods, however, for which organic production may make a difference (or for which organic production methods tend to correlate with other practices that produce positive results).

The bottom line is eat organic foods if you like. Just don’t believe there’s any scientific basis for claiming you will be healthier as a result. As the paper’s senior author, Dena Bravata, explains: “There isn’t much difference between organic and conventional foods, if you’re an adult and making a decision based solely on your health.”

For more on the study, here are reports from the NYTAP, and NPR.

Cross-posted from The Volokh Conspiracy.

post

How Not to Label Biotech Foods

In November, Californians will vote on Proposition 37, a ballot initiative to impose a mandatory labeling requirement on all foods produced with or from genetically modified organisms (GMOs). For reasons I discuss in this New Atlantis article, this requirement is unnecessary, unwise and potentially unconstitutional.

The effort has been endorsed by numerous progressive organizations and the California Democratic Party. Of note, those who usually police the misuse or politicization of science have been strangely quiet about the misleading and inaccurate scientific claims made by Prop. 37 proponents. Although the proposition warns of “adverse health consequences” from genetic engineering of foods, there is not a single documented case of adverse health consequences due to the use of GMOs. Yet about traditional crop-breeding techniques, we can say no such thing. It’s no wonder that the National Academy of Sciences has issued numerous reports concluding that the use of modern genetic modification techniques, in themselves, have no bearing on the relative safety of a food product. What was done to a specific GMO matters more than whether specific modification techniques were used.

It is even misleading to single out crops and other organisms modified by modern genetic modification techniques as “genetically engineered.” Many common crops are “genetically engineered” in that they are the result of direct human modification. Corn, for example, does not exist naturally. It was “engineered” by humans, albeit using less precise breeding methods centuries ago.

The organizers of the effort claim consumers have a “right to know” whether their foods contain GMOs. But nothing stops consumers from obtaining such information. Organic producers and others who wish to cater to those who dislike GMOs are free to label their products accordingly (and, in my view, should be able to do so without some of the excessive disclaimers urged by the FDA). Absent evidence of a potential health risk, there is no reason for the government to mandate GMO labels. Such labels are not necessary to protect consumers against misleading claims, and a proclaimed “right to know” does not constitute a substantial governmental interest.

Some consumers may want to know whether products contain GMOs, just as others may wish to know whether a product was made with union labor, a company’s executives donated to particular political candidates, or its products were blessed by shaman priestesses. Yet it must take more to justify compelling speech in the form of product labels. Were it otherwise, there is no end to what could be the subject of mandatory labeling requirements, and there would be no meaningful constitutional protection of compelled commercial speech.

Most existing labeling requirements can be justified on the grounds that they protect uninformed consumers from potential adverse impacts. Ingredient labels, for example, protect those with allergies or specific dietary needs. GMO labels, on the other hand, do no such thing. Rather they stigmatize products, suggesting there is something significant, or even potentially wrong, with a product that was produced in this way, even if there is no scientific basis for making such a claim. Some consumers may have moral or other objections to GMO products, and that is their right. Such consumers are free to seek out producers who will make products in accord with their preferences. But GMO opponents should not have the right to force others to modify product labels, at their own expense, just to satisfy one group’s set of subjective value preferences.

Does this mean there will be no GMO labels? Not at all. There is no requirement that producers identify whether products are “organic” or “kosher,” and yet such labels proliferate. Where such information is likely to influence consumer behavior, producers have ample incentives to provide the information consumers want. That is, those producers whose products are GMO-free have every incentive to disclose, and perhaps even advertise, this fact. Such disclosure is sufficient to let those consumers who oppose GMOs shop accordingly without imposing the cost of such preferences on others.

Cross-posted from The Volokh Conspiracy.

post

Q&A with Dean Lueck on Wildfire Policy and Suppression

This week’s installment in our Q&A series hits close to home. As we write, a 10,000-acre wildfire burns less than twenty miles from our office in Bozeman, Montana, a humbling reminder of the reality of large and destructive wildfires in the west.

Dean Lueck knows wildfires better than most. Before becoming an economist he was a smokejumper with the U.S. Forest Service in McCall, Idaho. Recently, Lueck combined his hands-on experience fighting fires with his impressive academic career studying property rights and natural resource economics. The result was Wildfire Policy: Law and Economics Perspectives, a volume he co-edited with Karen Bradshaw. This summer, Lueck is continuing his research on wildfire policy at PERC, along with Jonathan Yoder, as a 2012 PERC Lone Mountain Fellow.

Q: Can you highlight a few examples of major wildfires and what efforts were taken toward suppression?

A: First, there is the famous 1910 “Big Burn” in northern Idaho and western Montana. That fire, or actually a collection of fires, burned about 3 million acres, killed over 80 people, and devastated the town of Wallace, Idaho. It was fought in a disorganized manner by unskilled firefighters including convicts, vagrants, U.S. Army soldiers, timber land owners with only hand tools. Because the fire took place predominantly on national forest lands, it led to dramatic changes in federal fire policy. Also during the period between 1880-1920, there were many fires as large or larger than the Great 1910 Burn. Many of these took place in the northeast and the Great Lakes region where private timber land dominated.

In general organized wildfire suppression efforts were very limited prior to 1900 and efforts focused primarily on protecting homes, buildings, and towns, but not on putting out the fire itself. By the late 20th century fire suppression had become organized within a large centralized, coordinated and hierarchical system heavily dominated by the U.S. Forest Service. Crews had become specialized and highly mobile. The use of aircraft in transport and direct suppression with water and retardant had become routine.

More recently, the Biscuit Fire in Oregon burned nearly a half a million acres in 2002. It began on July 13, and at its zenith on July 31 there were over 2,000 firefighting personnel, 21 helicopters and 40 bulldozers assigned to the fire. The fire was not completely suppressed until December and cost more than $150 million. The fire destroyed four homes and ten other structures, forced the evacuation of 15,000 people, and destroyed or damaged thousands of acres of valuable timber. No one was killed during the suppression effort.

By contrast consider the Black Dragon Fire in 1987, which burned 18 million acres along the Amur River, which is the border between China and Russia. The fire started in China and burned 3 million acres there. The Chinese fielded over 60,000 unskilled fire fighters and hundreds died. The Russians did essentially nothing to suppress the fire, and it grew an additional 15 million acres. The disparate approaches resulted from a lack of cooperation between Russia and China and extreme differences in the relative value of timber in the two countries.

Since 1999 there have been 134 fires of more than 100,000 acres in the United States. For the last 10 years, average annual federal suppression expenditures have been over $1 billion.

Q: What does your project (with Jonathan Yoder) seek to add to the economics of wildfire policy?

A: The main goal of our project is to gain an economic understanding of the organization of wildfire suppression. Fire suppression organization today seems complex, administratively cumbersome, and often inefficient. We want to understand the causes and consequences of the current system both theoretically and empirically. We want to understand the economic foundations that have driven how fire suppression institutions developed into those that we see today, and understand how they vary across environmental, demographic, and political jurisdictions. We will then have a better foundation for understanding where inefficiencies lie, and how suppression institutions might be improved.

So, for example, we are examining the emergence of wildfire suppression among timber landowners in the northwestern and northeastern United States during the late 1800s. These private organizations pre-date the Forest Service fire crews, and this type of timberland owner association, to our knowledge, is pre-dated only by urban firefighting organizations. The federal government’s involvement in fire suppression emerged with the accumulation of federal forest lands and even stimulated expansion of the national forest system.

Q: What are some of the criticisms of modern wildfire institutions? Do the resource values justify the suppression costs?

A: Many critical observers feel there is an excessive amount of suppression and too little fuel management or prescribed burning, especially on federal lands. There is also the concern that suppression costs may often outweigh benefits (damage reduction). We certainly know of specific cases in which suppression costs exceeded the resource value at risk. There is also a concern that suppression effectiveness is often low so that suppression expenditures have little payoff. At the same time there is strong political pressure to put out all fires so there has been a recent reversion back to the so-called “10am rule” in which fire crews and land managers are directed to put all effort into suppression even where suppression costs would be high relative to potential damages. The long-term effects of continued fire suppression are also likely to lead to fuel buildups that can result in larger, more devastating fires in the future.  [Read more...]

post

En Banc Petitions in D.C. Circuit Greenhouse Gas Litigation

Earlier this month, several of the parties challenging the Environmental Protection Agency’s decision to regulate greenhouse gases under the Clean Air Act filed petitions for panel rehearing or rehearing en banc in Coalition for Responsible Regulation v. EPA, in which the U.S. Court of Appeals for the D.C. Circuit turned away all of the state and industry challenges to the EPA’s rules. I summarized the court’s decision here, and provide greater background on the EPA’s regulations and associated policy issues here.

The en banc petitions stress the unusual magnitude and importance of the regulations at issue, as well they should, but that’s often not enough for en banc review. Nor are protestations that the original panel muffed the merits (case in point), particularly where (as here) most of the issues could be resolved on traditional administrative law grounds. The industry argument that the panel erred in refusing to force the EPA to consider potential adaptation to climate change, for example, is a non-starter. Even if the panel got this question wrong (and I don’t believe it did), that’s not the sort of question that is worthy of en banc review.

There is one issue, however, that could well be en banc-worthy: the panel’s conclusion that industry petitioners lacked standing to challenge the EPA’s so-called “tailoring rule.” While the strict application of Article III standing requirements is nothing new on the D.C. Circuit, here the panel applied the standing rules to prevent the object of a government action from challenging the lawfulness of that action, on the grounds that the harm would not be redressable by a favorable ruling on the merits. Though a plausible reading of the relevant standing precedents, this is a holding that could insulate all manner of regulatory action from judicial review, and expand the already troubling, de facto agency authority to issue “waivers” or otherwise disregard applicable legal requirements.

A bit of background: The Clean Air Act requires the EPA to impose various regulatory requirements on stationary sources that have the potential to emit more than 100 or 250 tons per year of regulated pollutants. (The specific threshold depends on the type of facility.) As applied to traditional pollutants, these thresholds catch thousands of facilities. But applied to greenhouse gases — carbon dioxide in particular — they catch millions. This, the EPA claims, would be an “absurd” result because it would impose an insuperable burden on the EPA and cooperating state agencies. To remedy this, the EPA sought to “tailor” the Act’s requirements by substituting numerical thresholds of its own devising for those contained in the statute itself. So with a wave of its administrative hand, the EPA substituted 75,000 and 100,000 for 100 and 250, and reserved the right to lower the threshold at its discretion in the future.  [Read more...]

post

Why Gasoline Prices Are Volatile

Andrew Morriss and Donald Boudreaux have an op-ed in today’s WSJ explaining why gasoline prices have become more volatile. The short version: Boutique fuel requirements have balkanized the gasoline market, magnifying the effects of local supply disruptions.

For most of the 20th century, the United States was a single market for gasoline. Today we have a series of fragmentary, regional markets thanks to dozens of regulatory requirements imposed by the federal Environmental Protection Agency (EPA) and state regulators. That’s a problem because each separate market is much more vulnerable than a national market to refinery outages, pipeline problems and other disruptions. . . .

The role of regulators in fuel formulation has become increasingly complex. The American Petroleum Institute today counts 17 different kinds of gasoline mandated across the country. This mandated fragmentation means that if a pipeline break cuts supplies in Phoenix, fuel from Tucson cannot be used to relieve the supply disruption because the two adjacent cities must use different blends under EPA rules.

To shift fuel supplies between these neighboring cities requires the EPA to waive all the obstructing regulatory requirements. Gaining permission takes precious time and money. Not surprisingly, one result is increased price volatility.

Another result: Since competition is a key source of falling gas prices, restricting competition by fragmenting markets reduces the market’s ability to lower prices.

While most of the fuel standards were adopted in the name of the environmental protection, many are actually the result of special interest pleading. Producers of various products, ethanol in particular, sought fuel content mandates or performance requirements that would benefit their particular product. (I detailed part of this history in “Clean Fuels, Dirty Air,” in Environmental Politics: Public Costs, Private Rewards.) Worse, some of the content requirements are irrelevant for new cars due to modern pollution control equipment. Federally imposed boutique fuel requirements have outlived whatever usefulness they ever had.

Cross-posted at The Volokh Conspiracy.

post

The Health Costs of Plastic Grocery Bag Bans

Many jurisdictions have implemented bans or taxes on plastic grocery bags based on environmental concerns. In 2007, San Francisco enacted a county-wide ban that included large grocery stores and drugstores. Los Angeles, Palo Alto, and other cities in California have followed suit.

In research carried out at PERC this summer, Jonathan Klick, a PERC Lone Mountain Fellow, argues that reusable grocery bags contain potentially harmful bacteria, especially coliform bacteria such as E. coli. Klick finds that, in the wake of San Francisco’s ban, deaths and ER visits related to these bacteria spiked as soon as the ban went into effect. For more on this ongoing research, watch our interview with Klick above.

post

Q&A with Matthew Turner on Road Congestion and Transportation Policy

It’s been another busy summer at PERC, with our summer fellowships bringing together an all-star cast of scholars to Montana to research topics relating to free market environmentalism. This week we continue our Q&A series with economist Matthew Turner, a leading expert on road congestion and transportation policy.

Matthew Turner is a 2012 PERC Julian Simon Fellow and professor of economics at the University of Toronto. His research focuses on the economics of land use and transportation. We thank Matthew for taking time to answer our questions. For more PERC Q&As, visit the series archive.

Q:  At your latest PERC workshop you presented new research, co-authored with Victor Couture and Gilles Duranton, entitled “Speed.” What aspect of speed are you looking at and why is it important?

A:  Bakeries in the Soviet Union used to hand out bread for free to the first in line while those at the back wait for the next batch. This was wasteful. It meant time was spent waiting that could otherwise be used for something else, and it gave bread to people with the most time on their hands rather than to the hungriest or the hardest working. We allocate highway space in much the same way. The commuter who arrives on the road at 7:00am gets to travel, but the one who arrives at 7:30am needs to waits in a traffic jam until road capacity becomes available. Just as for the old Soviet bakery, this leads to a lot of time wasted in traffic jams and assigns scarce rush-hour capacity to people willing to wait in traffic, who might not be the people who value rush hour travel most highly.

In our research we are try to understand the determinants of  driving speed in order to estimate the value of time lost to waiting in traffic. Since road travel, one way or another, accounts for about 18% of gdp, the value of this waste is a big number. We also want to develop a basis for making guesses about what a good road pricing system would look like.

Q You claim there are sizable welfare gains to be had from more sensible transportation policies? What sorts of policies are we talking about? Taxes on driving?

A:  Our research suggests that the failure to price access to roads leads Americans to waste tens of billions of dollars worth of time each year sitting in traffic. Yet roads are congested only part of the time and even our biggest and busiest cities have unused road capacity off peak. If we impose tolls on congested roads at congested times, we give people an incentive to shift their travel to an uncongested time when we have surplus road capacity. This saves people from waiting in traffic and will likely increase the capacity of our road network.

QAre there areas where congestion pricing has worked? Could it be implemented on a wide scale in the United States?

A:  Stockholm, London, and Singapore, and a handful of U.S. roads and bridges have congestion pricing programs. In these places we see big increases in travel speed in response to pretty small charges for peak hour road use. With that said, the devil is in the details. So far, these programs are expensive to administer and it is easy to imagine ways that they could create problems. Rather than aiming for wide scale application to the United States we ought to encourage pilot programs in congested cities like New York, Miami, Seattle, Boston and Portland. As we gain experience administering congestion pricing programs we can apply them more widely.

Q In earlier research you find that widening and building more roads actually creates more traffic. What is “The Fundamental Law of Road Congestion” and what are its implications for transportation policy?

A:  In this project we examine the relationship between the stock of highways and arterial roads in large U.S. cities and the total amount of road travel in these cities. More precisely, it examines the relationship between a city’s total lane kilometers of highway and arterial road and total miles driven within the city in a year. We find that a one percent increase in road lane kilometers causes almost exactly a one percent increase in driving. We also find that changes to the stock of buses in a city’s public transit network do not affect driving.

This means that we should not expect either road or transit expansions to alleviate traffic congestion in the long run. The only policy that we know to be effective at reducing traffic congestion is congestion pricing.

QWhen might investments in public transportation or road building be worthwhile?

A:  Even though road and transit expansions probably won’t reduce congestion on our roads and highways, they will allow more people to move around. We want to evaluate transportation infrastructure on the basis of the value of these extra trips. If a new subway line allows an extra 50,000 people to work downtown, we need to decide if the extra economic activity downtown justifies the cost of the train. The same is true of road expansions. We don’t have good answers to this question yet. Generally, it looks like expansions of highway and subway capacity are so expensive that it is going to be difficult to pass this test, especially in the countryside where rural state senators like to send federal highway funding. On the other hand, making investments that squeeze more capacity out of existing roads and tracks in big cities is going to be easier to justify.

For more from Matthew Turner on transportation policy, read his article in the Fall 2010 edition of PERC Reports.

Follow

Get every new post delivered to your Inbox.