The next generation of infrastructure should help more Americans go carless
It appears that oil has reached a new all-time high in real terms. Given that gas prices normally peak during the summer season, the stage could be set for some ugly pump prices this year, although expensive oil may not be the most painful part of the current commodity price boom for consumers (an honor which may go to the exploding cost of grain).
With oil so expensive, commuters may wish they had better transportation options. Some of them may even begin to wonder whether we might want to improve our investments in mass transit. This is important, as momentum seems to be building for a round of big investments in infrastructure. In 2009, a new administration will oversee the approval of a replacement or reauthorization of the nation’s surface transportation funding program. As Noam Scheiber reported this week in The New Republic, the economists advising Barack Obama see a big role in economic growth for infrastructure investment, which helps to explain his emphasis on the subject. And frankly, we simply cannot afford to delay much more on such spending.
At The Atlantic, Bruce Katz and Robert Puentes highlight the problem. Basically, a handful of large metropolitan areas constitute the key nodes in our economy and in our transportation network. Those nodes are burdened by epidemic congestion, which generates huge economic losses every year. Last year, the federal government spent around $50 billion on highways, and yet an estimated $78 billion in economic costs were sustained by commuters and businesses due to congestion.
I believe congestion plays a much larger role in the current reshaping of central cities than higher fuel costs. Many people and businesses are moving inward not to avoid expensive gas, but to eliminate costly losses of valuable time. There is a lesson in this behavior for policy makers: commuters are sick and tired of congestion. Policy choices should take advantage of that by investing in an infrastructure that’s cost-effective and clean.
Imagine someone who commutes daily from suburban Fairfax County, for example, to downtown Washington, D.C. In particular, consider the tolls such a commuter might pay if the roads used every day are priced to eliminate congestion. We have some sense of what that might involve, given estimates for high-occupancy toll lanes proposed around the Washington area. In general, our hypothetical commuter could probably expect to pay at least $6-10 each way, though the amount could easily be much higher than that during peak travel times. Those payments are far larger than the marginal increase in commuting expense due to a $1 increase in per-gallon gasoline costs.
Congestion is an incredible problem, but it’s important to recognize that smart investments in new infrastructure can help to eliminate congestion while also reducing emissions and commuter exposure to fuel costs. That doesn’t have to be the case, however. If new infrastructure primarily comes in the form of new lane miles, then congestion reduction will only be temporary; eventually, developers will respond to the new investments by building along the new capacity — that is, outward. In the space of a few years, the congestion benefits will be erased, and with no reduction in vehicle miles traveled or emissions, since increased efficiency may well be canceled out by longer commutes. Critically, exposure to higher fuel costs will remain.
If, however, congestion is addressed by the implementation of congestion pricing, along with significant investments in high-capacity rail service, both inter- and intracity, then efforts to clear the nation’s arteries will also yield reductions in emissions and miles traveled, and the addition of automobile alternatives will make it easier for commuters to substitute away from driving when gas costs soar.
We’re going to spend a lot of money on infrastructure in the near future. It is critical that we use that money to maximum good effect. New highways will bring little to no long-term return on investment. If we’re going to spend, we should spend smart.