Topic: Energy and Environment

Saving Cities from Bad Federal Policies

Since 1992, federal taxpayers have helped fund construction of urban rail transit lines through a program called New Starts. This program is due to expire in 2020, and today the Highways and Transit Subcommittee of the House Transportation and Infrastructure Committee will hold a hearing on whether or not to renew it.

No doubt most of the witnesses at the hearing will be transit agency officials bragging about how their expensive projects have created jobs and generated economic development. But a close look at the projects built with this fund reveals that New Starts has done more damage to American cities than any other federal program since the urban renewal projects of the 1950s. Here are eight reasons why Congress should not renew the program.

1. New Starts encourages cities to waste money. The more expensive the project, the more money New Starts provides, so transit agencies plan increasingly expensive projects to get “their share” of the money. As a result, average light-rail construction costs have exploded from under $17 million per mile (in today’s dollars) in 1981 to more than $220 million a mile today.

2. New Starts encourages cities to build obsolete technologies. There are good reasons why more than a thousand American cities replaced their rail transit lines with buses between 1920 and 1970: buses cost less and can do more than trains. A train can hold more people than a bus, but for safety reasons a rail line can only move a few trains per hour. A busway can move hundreds of buses and twice as many people per hour as any light-rail line. As one recent report concluded, “there are currently no cases in the US where LRT [light-rail transit] should be favored over BRT [bus-rapid transit].”

3. Rail transit often increases congestion. Light rail, streetcars, and even new commuter-rail lines often add more to congestion by running in streets or at grade crossings than the few cars they take off the road. The traffic analysis for Maryland’s Purple Line, for example, found that it would significantly increase delays experienced by DC-area travelers.

4. New Starts forces transit agencies to go heavily in debt. New Starts pays only half of construction costs, and transit agencies often borrow heavily to pay the other half. This leaves them economically fragile so that, to avoid going into default in an economic downturn, they are forced to make heavy cuts in transit service.

LA Metro’s Climate Strategy

An article in the Los Angeles Times last week frets that Los Angeles transit buses are “hemorrhaging riders,” which is supposedly “worsening traffic and hurting climate goals.” In fact, the decline of bus transit is actually helping California achieve its climate goals.

In 2017, Los Angeles Metro buses used 4,223 BTUs and emitted 349 grams of greenhouse gases per passenger mile. By comparison, the average light truck used only 3,900 BTUs and the average car just 2,900, with light trucks emitting 253 grams and cars 209 grams per passenger mile. By raising bus fares and reducing bus service, L.A. Metro is getting people out of dirty buses and into clean cars.

Of course, L.A. Metro officials probably don’t realize they are doing that. They are so bone-headed that they want to convert a dedicated bus route into a light-rail line in order to “increase its capacity.” At present, they run a maximum of 15 buses an hour on the dedicated bus lanes, which is less than 6 percent of its capacity.

Dedicated bus lines in other parts of the world move as many as 30,000 people per hour in each direction. By comparison, no light-rail line can move more than about 12,000 people per hour. As one study concluded, “there are currently no cases in the US where LRT [light rail transit] should be favored over BRT [bus-rapid transit].”

Los Angeles Metro’s CEO is currently paid well over $300,000 a year, which is almost twice as much as the governor of California and far more than the director of the state Department of Transportation, whose agency moves far more people and ton-miles of freight per day than Metro moves in a month. Yet Metro’s CEO is not being paid to move people, but to separate people from their tax dollars, and so far he is doing that very well. 

For more information about the future of public transit, see my recent article about LA Metro’s climate strategy.

EPA Co-benefits Are Fine, But the Agency Must Tell the Whole Story

Should you be worried about mercury emitted from power plants?

Sure, but only if you are a pregnant woman, who during gestation consumes about 220 pounds of fish caught from exclusively the top ten percent most polluted fresh waters of the United States, despite all the signs along these rivers and lakes warning “DO NOT EAT THE FISH!

Don’t take my word for it. I’m simply relaying EPA science. And not the ‘bad” kind produced by the Trump administration; rather, I’m talking about virtuous EPA science as practiced by the Obama administration.

A little background: mercury emissions aren’t a direct threat to humans, but instead settle onto water bodies, and then make their way up the aquatic food chain. Because mercury is a neurotoxin, the fear is that pregnant women can engender developmental disorders in their offspring by eating fish that have bio-accumulated the toxin.

In the course of promulgating the Obama-era Mercury and Air Toxics Standards for power plants, the EPA stated that it considers “IQ loss estimates of 1-2 points as being clearly of public health significance,” even though this low a number rests comfortably within the error of measurement inherent to an IQ test. According to the EPA’s analysis, the Mercury Rule was necessary to prevent an IQ loss of 1.1 points supposedly suffered by children born to a putative population of pregnant women from substance families, who during their pregnancies eat 220 pounds of self-caught fish reeled in from the most polluted bodies of fresh water. Notably, the EPA failed to identify a single member of this supposed population. Instead, these women were modeled to exist.

Even under EPA’s ultra-accommodating analysis of its rules’ benefits, the agency pegged the benefits of the Mercury Rule at a mere $6 million. In stark contrast, the agency estimated that the rule would cost about $10 billion annually, making it one of the most expensive regulations ever.

Celebrate, Don’t Mourn, the Decline of Public Transit

An article in last week’s New York Times joins others in asking us to sympathize with the beleaguered transit industry, whose ridership has dropped every year since Uber and Lyft arrived on the scene. The article notes that Uber and Lyft subsidized the 5.6 billion rides they carried last year to the tune of $2.7 billion, or almost 50 cents a ride.

“The risks of [transit] privatization are grave,” the Times article warns. Uber and Lyft are taking “a privileged subset of passengers away from public transit systems” which “undermines support for public transportation.”

What the article doesn’t say is that, in order to carry 9.6 billion riders last year, public transit demanded more than $50 billion in subsidies from taxpayers, or more than $5 per ride. In other words, transit subsidies per rider are more than ten times greater than Uber and Lyft subsidies.

I shouldn’t have to say this, but there is also a crucial difference between ride-hailing subsidies and transit subsidies: the money Uber and Lyft are spending is voluntarily given to them by investors who hope to eventually make a profit. Tax subsidies are taken involuntarily from taxpayers to support systems that, as long as they are publicly owned, will never come close to making a profit.

Instead of bemoaning the loss of transit riders to ride-hailing services, we should be celebrating the fact that a fast, convenient, and affordable service is taking away the need to subsidize slow, inconvenient, and expensive transit systems. It’s worth adding that Uber and Lyft might not be losing $2.7 billion a year if they didn’t have to compete with a transit industry that gets $50 billion in annual subsidies.

Further, the argument that ride hailing is stealing well-off passengers away from transit doesn’t stand up to the facts. As I’ve shown elsewhere, census data reveal that low-income people are buying cars and reducing their use of transit for commuting. The biggest growth market for transit is among people who earn more than $75,000 per year. They don’t need other taxpayers to subsidize their rides to work.

Congress will revisit these issues next year when it has to reauthorize federal highway and transit spending. Today, the Cato Institute published my new report urging Congress to put transportation programs on a pay-as-you-go basis, with funding mainly out of user fees rather than tax dollars.

For those who are interested in finding out what is happening to transit in your urban area, I’ve created a spreadsheet that has charts showing key variables for transit systems in more than 100 urban areas. As described in the instructions for this spreadsheet, all users have to do is find the number of the urban area they are interested in on the spreadsheet, enter that number in cell F1, and it will automatically make eleven charts for that area.

150 Years of Boondoggles

Today is the 150th anniversary of the pounding of the gold spike that represented completion of the first transcontinental railroad. Union Pacific, which now owns the complete route, plans to bring its newly restored Big Boy steam locomotive to Ogden to recreate, with 4-8-4 locomotive 844, the joining of the UP and Central Pacific in 1869. Numerous museums and history societies are planning exhibits and meetings.

While it would be fascinating to watch the Big Boy operate, you’ll have to excuse me for otherwise being unenthused about this event. As I see it, the first transcontinental railroad was the biggest boondoggle in nineteenth-century America, and one that – as later railroads proved – we could have lived without. Unfortunately, it is still being cited as an example of why twenty-first century America should do even more foolish things like build high-speed rail.

Railroads were the high-tech industry of the mid-1800s. They revolutionized both passenger travel and freight movement and mode it possible to farm and extract resources in remote locations. Yet, like today’s high-tech industries, many planned and some actual railroads were little more than securities schemes to separate naive investors from their money. The first transcontinental railroad did so on a grand scale, relying not on naive investors but a gullible Congress willing to give away tax dollars and resources.

The story is told in detail in Railroaded: The Transcontinentals and the Making of Modern America by Stanford University historian Richard White. To entice investors into building a continuous line from the Mississippi River to the Pacific shore, Congress agreed to give the railroads 10 square miles of land for every mile of track. In addition, it would loan builders $16,000 a mile for construction on flat lands and $48,000 a mile in the mountains.

The leaders of the Central Pacific (which built from California) and Union Pacific (which built from the Mississippi) quickly realized that immediate profits could be made by contracting construction out to themselves. They created separate companies that built the railroads as cheaply as possible, then billed the government the full amount of the available loans. The railroads were committed to eventually repaying the loans, but that responsibility belonged to a different set of investors, while a narrow inner circle of each railroad’s leaders owned the highly profitable construction companies.

The Central Pacific even went so far as to hire a geologist who claimed that the Sierra Nevada Mountains started just outside of Sacramento, many miles away from the real mountains, so they could collect the full $48,000 a mile for that segment. Using techniques like this, the people who owned the construction companies earned millions of dollars in profits before the railroads were even completed.

President Trump Considering a Jones Act Waiver

New reports suggest that President Trump is considering granting a Jones Act waiver to allow non-U.S.-flagged ships to transport natural gas from energy-rich parts of the United States to the Northeast and Puerto Rico. He should do so without delay. Granting this waiver would mark not just a triumph of common sense, but also help fulfill President Trump's campaign promise to take on the Washington special interests who profit from laws such as the Jones Act at the expense of American consumers and businesses.

To learn more about this issue both the public and media alike are invited to attend an April 30 event at the Cato Institute that will examine the Jones Act’s impact on Puerto Rico. Featuring Puerto Rico's Secretary of State, the president of the Puerto Rico Economic Development Bank, and other experts, the event will include a discussion of the island's attempt to obtain a Jones Act waiver for the purpose of transporting U.S. natural gas. For further information about both the Jones Act and the Cato Institute’s effort to raise awareness about this burdensome and outdated law please visit cato.org/jonesact.

The Fight over Particulate Matter

The EPA and conventional air pollution regulations are back in the news. NPR reported that the seven-member Clean Air Scientific Advisory Committee (CASAC), which provides the EPA with technical advice for National Ambient Air Quality Standards, is “considering guidelines that upend basic air pollution science.” But NPR’s oversimplified depiction of a settled scientific debate ignores real misgivings about the science that has justified the regulations and provides an opportunity to ask questions about the proper role of science in public policy.

The pollutant in question is particulate matter (PM), tiny particles or droplets emitted from power plants, factories, and cars. The EPA contends that PM with diameters smaller than 2.5 micrometers, about 3 percent of the size of a human hair, is the most harmful because the particles can be inhaled deep into the lungs. Along with five other criteria pollutants, the Clean Air Act requires that the EPA periodically prepare an analysis that “accurately reflects the latest scientific knowledge” on the health effects of PM exposure. It must then set air quality standards “requisite to protect the public health…allowing an adequate margin of safety.”

Whether one favors leaning towards caution and setting stringent pollutant standards or is skeptical of the efficacy of air quality rules and worries about the costs of the regulations, PM is important. On the one hand, the supposed harms of PM are high. One (contested) study claimed that 2005 levels of PM caused about 130,000 premature deaths per year, which would put PM as the sixth leading cause of death in the United States after strokes. On the other hand, the regulations are expensive. Between 2003 and 2013, EPA regulations accounted for 63–82 percent of the estimated monetized benefits and 46–56 percent of the costs of all federal regulations. The benefits of reducing PM specifically are 90 percent of the monetized benefits of EPA air regulations, meaning PM rules play an outsized role in the justification for many of the costliest federal regulations.

No matter which side of the debate one is on, it would seem important that the EPA have a rational standard-setting process that properly weighs both the possible reduction in the harms of PM and the potential costs. Unfortunately, that is not the case.

The scientific evidence of the harms of PM is much more uncertain than many observers claim and the conflict over what we do and do not know about the effects of PM has existed for decades. The evidence of negative health effects of PM is primarily two studies published in the 1990s, the Harvard Six Cities Study (SCS) and the American Cancer Society Study (ACS). As I have previously noted,

The SCS has been the subject of intense scientific scrutiny and much criticism because of results that are biologically puzzling. The increased mortality was found in men but not women, in those with less than high school education but not more, and those who were moderately active but not sedentary or very active. Among those who migrated away from the six cities, the PM effect disappeared. Cities that lost population in the 1980s were rust belt cities that had higher PM levels and those who migrated away were younger and better educated. Thus, had the migrants stayed in place it is possible that the observed PM effect would have been attenuated.

Furthermore, a survey of 12 experts (including 3 authors of the ACS and SCS) asked whether concentration-response functions between PM and mortality were causal. Four of the 12 experts attached nontrivial probabilities to the relationship between PM concentration and mortality not being causal (65 percent to 10 percent). Three experts said there is a 5 percent probability of noncausality. Five said a 0-2 percent probability of noncausality. Thus 7 out of the 12 experts would not reject the hypothesis that there is no causality between PM levels and mortality.

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