A recent report that I coauthored, "Managing Transport Challenges When Oil Prices Rise" provides practical policy guidance on how to manage the risks of rising oil prices by increasing transport system efficiency. People with short attention spans might think that this report is already outdated, since global financial uncertainty has replaced rising fuel prices as the crisis-of-the-month. Leading businesses are bankrupt, employees are frightened, consumers are cautious, and fuel prices plummeting.
Most people have a highly distorted view of the risks they face, which skews their decisions and ultimately reduces their happiness. We live in one of the safest times and places in history, yet, many people live in constant fear, and respond in ways that actually reduce overall security. This is a major obstacle to efficient transportation, healthy living, and livable community.
I often hear debates over the costs of different modes of transportation, particularly between driving and public transit travel. Rising fuel prices have made public transit more attractive for some trips, boosting ridership, but critics point out that for most trips, transit fares are still comparable with fuel costs (for example, at $4 a gallon, fuel costs about $2 for a typical 10-mile trip, comparable to a bus fare in a typical city), and generally take longer. It is therefore legitimate to ask whether public transit really saves money.
North American (United States and Canada) policy generally favors low energy prices, with low taxes, production subsidies and other types of energy industry support. As a result, North Americans are energy rich: an average worker can purchase more fuel per hour of labor than almost any other time or place. In response North Americans have developed energy intensive lifestyles and industrial practices, have failed to implement many energy conservation practices common in other parts of the world, and consume more energy per capita than most other times and places.
A recent report by the libertarian Cato Institute, Does Rail Transit Save Energy or Reduce Greenhouse Gas Emissions?, claims that public transit service improvements are ineffective at conserving energy and reducing pollution emissions. But this conclusion is based on faulty analysis.
People’s response to death typically proceeds through various stages: disbelief, denial, anger, bargaining, guilt, and eventually acceptance and hope. Motorists’ response to increased fuel price seems to follow similar stages:
It turns out that the “law of demand” (the tendency of higher prices to reduce consumption) and the principles of urban economics (that improved accessibility increases land values) still apply. If we are smart, we can use these to help solve problems and benefit consumers.
Every person is unique. Every day is unique. Every trip is unique. As a result, an efficient and equitable transportation system must be diverse, so people can choose the best option for each trip. For example, today you might prefer to walk or bicycle, but tomorrow find it best to use public transit or drive.
Last week I attended the NREL Energy Analysis Forum, where leading North American energy analysts discussed current thinking concerning greenhouse gas emission reduction strategies, much of which involves emission cap and trade programs (as summarized in the report by Resources for the Future, "Key Congressional Climate Change Legislation Compared"). Similarly, a recent report, "Reducing U.S. Greenhouse Gas Emissions: How Much At What Cost" evaluates emission reduction strategies according to their cost effectiveness.
Many families move to sprawled, automobile-dependent suburbs because they want a safe place to raise their children. They are mistaken. A smart growth community is actually a much safer and healthier place to live overall.