Pound Foolish
Despite repeated claims by supporters of the status quo that the sky is falling, those of us pushing for a more sustainable world have long believed that the rationale for action was as much economic as moral. Processes that consume fewer resources and produce less waste are more efficient. Innovation that replaces century-old technologies should drive growth in productivity and expand, not shrink the economy. Curtailing activities that needlessly waste time and resources should free up people and investment for more meaningful pursuits. Now we finally have some research to back up these theories. The Union of Concerned Scientists reported this month that they believe an increase in fuel economy standards would create jobs and free up billions in consumer spending now devoted to gasoline purchases. An increase in the fuel economy standard to 35 mpg by 2018 would add $61 billion in annual spending to the economy and create 241,000 new jobs within two years. The auto industry itself would add jobs as it switched over to manufacturing more fuel efficient cars and would be the recipient of additional consumer spending as expenditures for gasoline declined. All of this seems quite logical to those of us without PhDs, as well, but sometimes we get distracted by the plaintive pleas of the automakers who want us to believe that the same gas guzzlers that paved their road to ruin are the only route to profitability.
A study performed for the advocacy group, CEO for Cities, takes a more microeconomic approach. This study tries to quantify the “green dividend” for cities that implement activist transportation policies. The subject for this study is Portland, where, according the U.S. Department of Transportation, the typical citizen travels four fewer miles per day than the national average. That slight difference in miles traveled per day translates into savings of $1.1 billion annually, according to the study’s author. Most of that savings get reinvested into the local economy, unlike money spent on auto-related expenditures, which typically leaves the region en route to the coffers of the automakers and oil companies. The study also places a value of $1.5 billion on the time saved from driving less, and estimates the value of lower greenhouse gas emissions at between $28 and 70 million annually.
The study is conveniently lacking any cost-benefit analysis that tallies the dollars spent to build such a progressive transportation infrastructure. In fact, this recently published study of government intervention to correct supposed market failures claims that:
[W]ith the single exception of BART in the San Francisco area, every U.S. transit system actually reduced social welfare. Moreover, they [Winston and co-authors] could not identify an efficient pricing policy or physical restructuring of the rail network that would enhance any system's social desirability without effectively eliminating its service.
Given the abundant ways to quantify the benefits of more efficient transportation, and the difficulty of agreeing on the economic impact of environmental damage, the debate is never ending. So while these studies may not be the trump card sustainability advocates are seeking, they do lay to rest the doomsday scenarios used to scare the general public. Frankly, it’s the status quo that has me scared. What exactly is the cost of doing nothing?
Comments
Two clarifications please:
1) Isn't it usually the enviornmentalists arguing that "the sky is falling" and therefore we need to do something (e.g. Al Gore), not "supporters of the status quo"?
2) The study you quote at the end of the post basically argues that transit is NOT beneficial from a cost-benefit perspective...so why do you quote it as if it supports your argument for more transit?
Posted by: Jeff Singer | July 23, 2007 7:58 AM
Supporters of the status quo claim hysterically that any significant steps toward a more sustainable world will set back the progress of mankind. I call that "sky is falling" thinking.
The quote at the end is meant to show that there are counterarguments to the notion of a green dividend, especially when a more detailed cost benefit analysis is performed. I am acknowledging that the pro-sustainability studies are not necessarily conclusive.
Posted by: Patrick | July 23, 2007 3:50 PM
"the debate is never ending"
Of course! Precisely the goal of the Exxon-funded AEI.
We need to educate the scientists at UCS that improving the the auto is NOT .... repeat NOT ... a solution. They should know better.
Posted by: socialscientist | July 27, 2007 7:25 AM