The Automobile: Social Benefits and Costs Air Pollution Trends

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The AutomobileSocial Benefits and CostsAir
Pollution Trends

• Joel Schwartz
• Visiting Fellow
• American Enterprise Institute
• March 15, 2006

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Questions

• Have we been forced into driving by carmakers,
  roadbuilders, and planners?
  
• Are Americans unique in their love affair with
  the automobile, and is it really a love
  affair?
  
• Does driving make us better or worse off?

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A Worldwide Love Affair with the Automobile

• In a wide range of economic, policy, and cultural
  contexts, people the world over choose suburban
  lifestyles and automobiles for travel as soon as
  they become wealthy enough to afford them
• Wealth is the single greatest determinant of
  automobile ownership and driving
  
• Driving is the overwhelming transportation mode
  even in countries that heavily tax cars and
  driving and provide widespread subsidized transit

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Have Americans been Hoodwinked into Cars and
Suburbs? (1)

• If Americans were forced into driving, then
  transportation in other countries would look
  quite different from the U.S. But it doesnt.
  
• Americans use cars for 88 of motorized
  passenger-miles Europe, 78
  
• Europeans do travel lessabout 2,000 miles/year
  less per capita after controlling for Europeans
  lower income. But per-capita driving is also
  increasing more rapidly than U.S.
• Transits market share dropped 35 in Europe
  between 1970 and 2000.
  
• Singapores car ownership quota increased cost of
  purchasing a car by 60, but caused only about a
  10 reduction in demand for automobiles

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Have Americans been Hoodwinked into Cars and
Suburbs? (2)

• Europe has suburbanized much as America
• Population densities in European cities dropped
  more than 60 between 1960 and 1990
  
• Amsterdams suburban share grew from 20 to 33
  from 1970-1994, while Pariss grew from 68 to
  77 from 1968-1990
  
• Americans adopted the automobile before
  interstate highways and post-war suburbanization
  
• By 1930, Americans owned 3 cars for every 4
  households and 0.22 cars per capita

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Huge Net Benefits from Driving

• What do people know that policymakers and
  activists dont?
  
• The dominance of driving and suburbs in wealthy
  countries is the result of deep-seated human
  desires for opportunity, space, convenience,
  autonomy, and privacy
• Driving increases choice and opportunity
• Greater choice of jobs and housing.
• More choice and lower prices for consumer goods.
  
  
• Greater lifestyle competition among cities.
• Greater recreational, social, family
  opportunities.
  
• More rapid response to emergencies.
• Not only do wealthier people buy cars cars help
  people become wealthier.
  
• Even after accounting for the harm from air
  pollution, accidents, congestion, and other ills,
  automobile travel delivers trillions of dollars
  per year in net benefits to Americans

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More of the Good, Less of the Bad

• Greater safety
• Compared to today, the per-passenger-mile risk of
  dying in a car accident was four times greater in
  1960 for vehicle occupants and seven times
  greater for pedestrians
• Pedestrian improvement is not due to suburbs
  discouraging walkingsuburbanites are the most
  physically active group.
  
• Risk of injury dropped as well
• Air pollution
• Despite steadily increasing driving, air
  pollution has steadily declined. Almost all
  carbon monoxide pollution comes from cars. But
  peak CO levels have declined 75 since 1975,
  despite more than a doubling of driving.
• Congestion
• Getting worse, but this is largely the
  intentional result of public policies to restrict
  road building, discourage people from driving,
  and encourage people to use transit.
• Although congestion has increased, cars are also
  much more comfortable and quiet than they used to
  be.

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Auto Ownership Follows Income

• Cars per capita vs. GDP per capita by country in
  1992

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Trend in Automobile Ownership Follows Trend in
Income

• Trend in cars/person vs. GDP/person, 1970-1992
  (log scale)
  
• By 1992, many European countries had reached
  Americas 1970 per-capita income level, and
  Americas 1970 per-capita car ownership level

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European Travel Trends

• Passenger miles by mode, 1970-2000
• Air is fastest growing sector, likely due to
  deregulation
  
• Auto miles increased by 2.4
• Transit increased slightly, with bus increasing
  more than rail
  
• A meaningful alternative to roads does not
  exist Ari Vatanen, EU MP, 3/14/06

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• Europeans drive less per capita when compared at
  the same income level
  
• But per-capita driving has been growing faster in
  Europe than in the U.S.

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Automobiles and Opportunity

• Automobile travel is faster that transit,
  providing access to three times the land area in
  a given amount of travel time.
  
• In U.S., transit commutes take about 70 longer
  than car commutes, even though they cover about
  the same distance
  
• Many places arent and cant be served by
  transit
  
• If only half of all households and employers are
  accessible by transit, then the autos speed and
  accessibility advantage would put 12 times as
  many employers within reach
• Welfare-to-work studies show owning an automobile
  greatly increases the chance of landing and
  keeping a job

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Automobile Benefits vs. Costs

• Costs and Benefits (1995)
• Costs roughly 2 to 4 trillion dollars
• Includes all costs, such as estimated costs of
  air pollution, climate change, free parking at
  malls and work, etc. (Source DeLucchi 2005)
  
• Benefits roughly 7 to 11 trillion dollars
• Includes expenditures and consumers surplus
  (Source Hogarty 1998 Schwartz 2005)
  
• Even after accounting for externalities and
  other subsidies and hidden costs, Americans
  derive trillions of dollars per year in net
  benefits from automobile travel
• This explains why demand for driving and
  automobiles is so high, even in countries that
  levy large taxes on cars and driving

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Automobiles Compared to Transit

• Driving cost about 0.20 per passenger-mile in
  2002 (0.23 at current gasoline costs), but
  transit cost 0.82.
  
• Adding in reasonable estimates of externalities
  would add a few cents per mile to the cost of
  autos
  
• Adding in the most extreme and implausible
  automobile externalities proposed by anti-auto
  activists would add about 0.23 per
  passenger-mile, for a total of about 0.45 per
  passenger-milestill much lower than the real
  cost of transit
• Full-cost pricing of all modes would decrease
  transit use, because transit is so much more
  heavily subsidized than autos
  
• Transit receives nearly 60 times the direct
  subsidy per passenger-mile, when compared with
  automobiles
  
• About 64 of transit costs are subsidized by
  taxpayers

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More Driving, Less Pollution
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Automobiles Critics Have It Exactly Backwards

• The automobile is a powerful enabling technology
  that has vastly increased human welfare
  
• Policymakers and activists have spent decades
  working to override peoples preferences, and
  impose their own prescriptions for how people
  ought to live work and travel.
• These policies have unnecessarily eroded the
  benefits of automobile travel by increasing
  congestion, diverted hundreds of billions of
  dollars to transportation modes that few people
  choose to use, and driven up the cost of housing
  by artificially restricting supply.
• Instead, to maximize Americans welfare and
  prosperity, policies should be reoriented to work
  in concert with peoples choices and aspirations,
  rather than against them

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What Is the Alternative?

• There is no realistic alternative to the
  automobile that would not require large
  reductions in peoples autonomy, prosperity, and
  quality of life
• Automobile travel provides a level of
  flexibility, convenience, opportunity, and
  autonomy unparalleled in human history
  
• Policymakers should continue to reduce the
  negative side effects of automobile travel but
  they should also stop trying to erode the huge
  benefits of automobile travel

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For More Information

• The Social Benefits and Costs of the
  Automobile
  
• In 21st Century Highways (Heritage, 2005), Utt,
  Pisarski, Cox, eds. https//secure.heritage.org/bo
  okstore/ProductDetail.cfm?id46.

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Addressing Air Quality (or not) through
Transportation Policy

• 1990 Clean Air Act Amendments and 1991 ISTEA
• Require that transportation policy be constrained
  by air quality goals
  
• Conformity Planned road projects must not cause
  future motor vehicle emissions to exceed levels
  permitted by air quality plans
  
• Lose federal transportation funds if fail to
  demonstrate conformity
  
• ISTEA and CAA arguably made air quality the
  premier objective of the nations surface
  transportation programs (Howitt and Altschuler,
  1999)
• NEPA provides a separate means to challenge road
  projects, potentially causing years of delay

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Two Ways to Reduce Motor Vehicle Emissions

• Improve Technology
• Inherently cleaner cars
• Improve on existing gasoline technology
• Develop alternative fuel technologies
• Change Behavior
• Induce people to drive less
• Make driving more expensive, less convenient
• Provide alternative modes, such as transit
• Change land use to support alternatives and
  discourage driving
  
• Induce people to maintain their cars better

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Only Improving Emission Technology Has Been both
Effective and Cost Effective

• Federal and state policies include all methods,
  but only technology has been effective, and only
  gasoline- and diesel-based technologies have been
  cost effective for reducing motor vehicle
  emissions
• Technology has stayed and will continue to stay
  way ahead of increases in total driving
  
• Behavioral methods have been and continue to be a
  costly failure, and a distraction from approaches
  that would genuinely bring cleaner air faster
  
• Behavioral approaches are still popular, because
  they serve anti-suburb, anti-automobile, and
  energy-rationing goals of policymakers and
  activists

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Air Quality/Transportation/Land Use Policy Link
Goes Back to 1970s

• Clean Air Act linked transportation and air
  quality
  
• 1970 Clean Air Act required transportation
  control plans
  
• Conformity added in 1977 strengthened in 1990
• States refused to implement TCPs in early 1970s.
  EPA was forced by court order to promulgate
  federal TCPs in 1973
  
• SF Bay Area TCP A VMT reduction of 97 percent
  is necessary if the national standard for
  photochemical oxidants is to be attained by 1977
  (EPA, Federal Register, 11/12/1973)
• Plan included limits on construction of parking
  lots, parking surcharges, carpool lanes, employer
  rideshare, transit, etc.
  
• EPA reluctantly included a provision for gasoline
  rationing, but said such rationing would be
  needed to attain the standards in 1977
  
• Also vehicle inspection and retrofit programs
• States still refused to implement the plans and
  EPA lacked institutional capacity for federal
  implementation.
  
• Congress took away EPAs authority to implement
  pricing or restrict parking
  
• 1977 CAA amendments added weak conformity
  requirement, but did not require restrictions on
  personal travel
  
• Highway funds could be withheld only if states
  failed to submit an acceptable air quality plan

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More Driving, Less Pollution
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Vehicle Emissions Improvements Continue to Stay
Well Ahead of Growth
Emission trend in California Car/SUV VOC
emission rate is dropping about 13/year
gasoline consumption is increasing about
2.7/year in fast-growing areas of California. So
total VOC still declining more than 10/year.
Sources Kirchstetter, Kean, Harley (UC
Berkeley), Caltrans.
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Fleet Turnover Will Continue to Clean the Air

• At any given age, more-recent vehicle models are
  cleaner than earlier models
  
• Means fleet turnover will continue to clean the
  air as earlier models leave the fleet
  
• SUVs and pickups started out worse, but improved
  more rapidly than cars
  
• SUV/pickup emissions have been same as cars since
  1996 model year for VOC 2001 model year for NOx

Denver vehicle inspection data, 1996-2002
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Motor vehicle air pollution has been solved as a
long-term problem

• Improvements will continue
• Automobile emissions are dropping about 10/year
  as fleet turns over to inherently cleaner cars,
  SUVs, pickups
  
• Fleet meeting 2004 EPA standardsthe fleet that
  will be on the road in 15-20 yearswill be at
  least 90 cleaner per-mile than current average
  car
• Net reductions of more than 80, even after
  accounting for VMT growth
  
• Diesel truck standards were tightened in 1998 and
  2003. Additional 90 reduction required in 2007

• But anti-automobile activists arent aware of the
  real-world data
  
• sprawl and higher-emitting SUVs are
  proliferating faster than technological fixes can
  keep up. David Goldberg, Smart Growth America
  in the Atlanta Journal-Constitution 2003
• More Highways, More Pollution, 2004 report by
  Public Interest Research Group

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EPAs MOBILE6 Emissions Model also Predicts Large
Reductions

• But model understates future improvements
• Model overestimates emissions of recent models
  and underestimates emissions of older models
  
• On-road measurements demonstrate faster emissions
  decline during last several years than predicted
  by model
  
• EPA Tier 2 standards require lower emissions than
  model predicts for a Tier 2 fleet

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Can We Get there Faster? If So, How?

• Worst 5 of automobiles produce 50 of tailpipe
  VOC emissions
  
• Mainly middle-aged and older vehicles in poor
  repair
  
• Identify these vehicles on the road with remote
  sensing and offer owners money to scrap
  
• There are only so many 1982 Buick Regals left on
  the road. Once you scrap them, theyre gone for
  good.
  
• There is no cheaper, faster way to achieve large
  air pollution reductions

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What About Behavioral Measures? (1)

• Ineffective and very expensive
• Hundreds of billions in transit subsidies over
  the last few decades, but transits market share
  continues to decline
  
• Even with proponents own cost and emissions
  numbers, light-rail costs more than 1
  million/ton of pollution eliminated heavy rail
  costs more than 100,000/ton
• Regulators normally dont consider a measure cost
  effective unless is costs less than about
  10,000/ton
  
• Density does little to reduce driving doubling
  density is associated with 10 decline in
  per-capita VMT
  
• Increase in congestion offsets emission gains due
  to higher emissions of slow/stop-and-go traffic
  
• EPAs MOBILE6 predicts increased road capacity
  reduces total emissions, despite increase in
  total VMT

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What About Behavioral Measures? (2)

• Indirect source fees miss the target people
  who can afford to buy new houses or shop at
  suburban malls dont drive high-polluting cars
  
• Most other behavioral measures cost a few hundred
  thousand per ton e.g., bike/pedestrian paths,
  employer trip reduction.
  
• Europes experience also shows limits of
  behavioral policies
  
• Europe is experiencing rapid growth in per-capita
  driving and suburbanization and declining transit
  market share, despite 5/gal gasoline and better
  transit.

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Tying Transportation Policy to Behavioral Air
Quality Measures Imposes Huge Costs

• Diversion of hundreds of billions of dollars to
  transportation modes that hardly anyone chooses
  to use
  
• Increases in road congestion erode benefits of
  automobile travel
  
• Unnecessary and undesirable constraints on
  peoples lifestyle choices and mobility

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A Better Way

• Acknowledge that technology has solved the
  long-term problem of motor vehicle air pollution
  
• Fleet turnover will eliminate most remaining
  motor vehicle pollution, regardless of VMT
  increases
  
• Deal with near-term conformity problems by
  addressing current high-polluting cars
  
• This is the quickest and cheapest way to
  near-term emission reductions
  
• Focus transportation infrastructure and policy
  decisions on peoples real transportation needs

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Contact information

• Joel Schwartz
• joel_at_joelschwartz.com
• 916.203.6309
• www.joelschwartz.com