The Automobile: Social Benefits and Costs

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					The Automobile: Social Benefits and Costs Air Pollution Trends
Joel Schwartz Visiting Fellow American Enterprise Institute March 15, 2006

• 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?


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

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 doesn’t.
– Americans use cars for 88% of motorized passengermiles; Europe, 78%
• Europeans do travel less—about 2,000 miles/year less per capita after controlling for Europeans’ lower income. But percapita driving is also increasing more rapidly than U.S.

– Transit’s market share dropped 35% in Europe between 1970 and 2000. – Singapore’s car ownership quota increased cost of purchasing a car by 60%, but caused only about a 10% reduction in demand for automobiles

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 – Amsterdam’s suburban share grew from 20% to 33% from 1970-1994, while Paris’s 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

Huge Net Benefits from Driving
• What do people know that policymakers and activists don’t?
– 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

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 walking—suburbanites 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.

Auto Ownership Follows Income

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


Astl Ger Fra Aus Sw e GB Fin Spn Dnk Jpn Net Nor




Cars per Capita


Grc Prt Isr

Tur Pak Ind Chn

Mex SKo

Tw n

0.0 $0










GDP per Capita (thousands)


Trend in Automobile Ownership Follows Trend in Income
• Trend in cars/person vs. GDP/person, 19701992 (log scale) • By 1992, many European countries had reached America’s 1970 per-capita income level, and America’s 1970 per-capita car ownership level


European Travel Trends
• Passenger miles by mode, 19702000 • 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

Passenger Miles (billions)



Automobile Buses and Coaches Rail Air Trams and Metros




0 1970




• 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.


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 aren’t and can’t be served by transit

• If only half of all households and employers are accessible by transit, then the auto’s 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

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


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-mile—still 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

More Driving, Less Pollution
GDP Diesel Truck Miles

Index (1981 = 1.0)


Automobile Miles Coal Consumption Nitrogen Dioxide (ann. avg.)


Carbon Monoxide (8-hour peak) Sulfur Dioxide (ann. avg.)


PM2.5 (ann. avg.) Ozone (8-hour exceedances) Ozone (1-hour exeedances)

0.0 1980

1990 Year


Automobile’s 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 people’s 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 people’s choices and aspirations, rather than against them

What Is the Alternative?
• There is no realistic alternative to the automobile that would not require large reductions in people’s 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

For More Information…
• ―The Social Benefits and Costs of the Automobile‖ – In 21st Century Highways (Heritage, 2005), Utt, Pisarski, Cox, eds. oductDetail.cfm?id=46.


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 nation’s surface transportation programs‖ (Howitt and Altschuler, 1999) • NEPA provides a separate means to challenge road projects, potentially causing years of delay

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

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 energyrationing goals of policymakers and activists

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 EPA’s 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

• •

More Driving, Less Pollution
GDP Diesel Truck Miles

Index (1981 = 1.0)


Automobile Miles Coal Consumption Nitrogen Dioxide (ann. avg.)


Carbon Monoxide (8-hour peak) Sulfur Dioxide (ann. avg.)


PM2.5 (ann. avg.) Ozone (8-hour exceedances) Ozone (1-hour exeedances)

0.0 1980

1990 Year


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.
1.4 1.2

Index (1994=1) >

1.0 0.8 0.6 0.4 0.2 0.0 1994 1996 1998 2000 2002 2004

Gasoline Consumption (SJV) Net VOC trend

Automobile VOC (grams/gallon) Caldecott Tunnel
Sources: Kirchstetter, Kean, Harley (UC Berkeley), Caltrans. 24

Fleet Turnover Will Continue to Clean the Air
Emissions (grams/mile) .

• At any given age, morerecent 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


Model Year



1982 1984 1986 1988 1990 1992 1994 1996 1998 2000




1 3 5 7 9 11 13 15 17 19 1 3 5 7 9 11 13 15 17 19 LT PC

Age (years)

Denver vehicle inspection data, 1996-2002


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 standards—the fleet that will be on the road in 15-20 years—will be at least 90% cleaner per-mile than current average car
• Net reductions of more than 80%, even after accounting for VMT growth

• But anti-automobile activists aren’t aware of the realworld 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

– Diesel truck standards were tightened in 1998 and 2003. Additional 90% reduction required in 2007


EPA’s 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
Emissions (grams/mile) 1.6

1.4 1.2 1.0 0.8 0.6 0.4 0.2 0.0


2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024

Calendar Year


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, they’re gone for good.

• There is no cheaper, faster way to achieve large air pollution reductions

What About Behavioral Measures? (1)
• Ineffective and very expensive • Hundreds of billions in transit subsidies over the last few decades, but transit’s 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 don’t 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
• EPA’s MOBILE6 predicts increased road capacity reduces total emissions, despite increase in total VMT

What About Behavioral Measures? (2)
• ―Indirect source‖ fees miss the target: people who can afford to buy new houses or shop at suburban malls don’t drive high-polluting cars • Most other behavioral measures cost a few hundred thousand per ton: e.g., bike/pedestrian paths, employer trip reduction. • Europe’s 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.

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 people’s lifestyle choices and mobility


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 people’s real transportation needs

Contact information
• • • • Joel Schwartz 916.203.6309


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