policy

Churches and Parking

Aaron M. Renn — Mon, 18 Feb 2013 22:13:37 -0500

A recent story over at Atlantic Cities got me thinking about a debate that’s heated up over the last few years: urban parking policy for churches.

Per Atlantic Cities, San Francisco has decided to start charging for metered parking on Sundays. This is starting to happen across America. In San Francisco, as in Chicago and elsewhere, the driver (no pun intended) appears to be revenue raising, plain and simple.

This has angered many attendees of local churches (who have in many cases now moved out of town and drive in for services). They seem to believe that they have a constitutional right to free parking on Sunday mornings. On the other side, of course, are bicycle advocates, who are positively gleeful. (Bicycle advocates are without a doubt the single most self-righteous advocacy group I know, which is why so many people who otherwise might support reasonable pro-bicycling policy can’t stand them).

I think a more nuanced approach should be taken, based on neighborhood conditions and creating the right incentive structures. For example, in some places across the country (San Francisco and Chicago come to mind again), it’s traditional for church goers to park even in what would otherwise be illegal spots. In general, this isn’t a problem – at least from my personal observations in Chicago. Traffic is pretty light on Sunday mornings, and it doesn’t cause any problems.

What’s more, enabling that temporary use of public space for a couple hours on a Sunday morning is exactly the sort of thing we need more of, not less. An institution like a church that has a single demand spike for parking during a generally low demand period is a great candidate for flexible uses of public space that would otherwise be underutilized. Liveable streets advocates are quick to decry the empty lanes off peak from oversized roads. So what’s the problem with putting a boulevard on a “road diet” on Sunday morning by using a lane for parking? Sounds like a winner to me. I’d be asking what other types of institutions or events could do similar things.

And consider, what will happen if churches are banned from using these spots or otherwise have to pay? Well, it depends on the neighborhood, but it’s easy to see what organizations often do when they need parking: build parking lots. Do we really want churches acquiring private off street lots that will sit empty 166 out of 168 hours per week – and generate no property taxes? It makes no sense to me. Why would we want to create incentives for people to own parking lots just because some folks hate cars? We should be going exactly the other direction. There are way too many church parking lots already if you ask me. We should be trying to cut deals with them to open that land up for development by making temporary blocks of street parking available for a couple hours on Sundays.

Now, in places where there is legitimately congestion and/or parking shortages on Sunday mornings (and San Francisco might be a case here – I don’t know for sure), implementing parking charges and restrictions would certainly be reasonable. The principal reason for allowing these church uses in the first place shouldn’t be some religious exemption per se, but rather enabling a local chronologically niche use to take advantage of underutilized public space. (Keep in mind that many other local users get truly special privileges based solely on their local presence: loading zones, valet zones, residential parking – and the latter is usually de facto free). If the space is over-subscribed, then feeding the meters to help rationalize demand is reasonable, and the churches should stop grumbling.

In short, we should be basing this on some type of rational decision process based on neighborhood conditions, setting the right overall incentives, and balancing the needs of competing uses, not pandering to churches treating illegal spots as if they were some ancient feudal right, nor sanctimonious bicyclists behaving as if a double parked car on Sunday morning is a menace to the planet or to their own self-evident status as the most perfectly entitled form of urban transport.

This piece first appeared at The Ubanophile.

Applying the Urbanophile's Beliefs About Cities to Houston

Tory Gattis — Tue, 22 Jan 2013 17:15:28 -0500

Last month The Urbanophile posted his statement of beliefs about cities, and a lot of them resonated with me about Houston. Here are some favorite excerpts along with my own thoughts.

* Great cities, like great wines, have to express their terroir. There is no one-size-fits-all model of urban success. Our cities are as diverse as their citizenry. To succeed, they need to express their own essential and unique character.

This is why you always have to be skeptical when somebody says something like "For Houston to be world class we have to do X like city Y." I believe that especially applies to heavy rail commuter transit in our decentralized, car-based city, but it also applies to recent questions like "Why can't Houston have downtown retail like Chicago's Magnificent Mile or New York's Fifth Avenue?" Because we're not like them, and we already have our pedestrian-oriented upscale shopping district: it's called The Galleria, one of the largest malls in the country, and with plenty of parking and climate control to boot!

* Don’t try to beat other cities at their game. Instead, make them beat you at yours. Cities are unique – yours included. Instead of fretting about measuring up to the planet’s elite metropoli or trying to emulate them, cities should figure out their unique strengths that other places can’t match.

Hear, hear! To quote an old post of mine: "Houston starts the 21st-century with a set of amenities 99% of the planet’s cities would kill for: a vibrant core with several hundred thousand jobs; a profitable and growing set of major industry clusters (Energy, the Texas Medical Center, the Port); the second-most Fortune 500 headquarters in the country (26); top-notch museums, festivals, theater, arts and cultural organizations; major league sports and stadiums; a revitalized downtown; astonishing affordability (especially housing); a culture of openness, friendliness, opportunity, and charity (reinforced by Katrina); global diversity; a young and growing population; progressiveness; entrepreneurial energy and optimism; efficient and business-friendly local government; regional unity; a smorgasbord of tasty and inexpensive international restaurants; and tremendous mobility infrastructure (including the freeway and transit networks, railroads, the port, and a set of truly world-class hub airports)."

* It says something powerful about a city when people vote with their feet to move there, to plant their flag, to seek their fortune. There is no more telling statistic about a place than in-migration. It’s important to know if people are moving into or out of a city–and why.

The most ignored statistic of the creative class city boosters, because their idols - NYC, Boston, Chicago, SF, LA - fail horribly on it.

* Moreover, new blood isn’t just nice to have, it’s essential. In an ever-more globalized, rapidly changing, competitive world, a city’s best interests are not served by being populated with people who’ve never lived anywhere else.

Points for our global diversity.

* But it isn’t just about the best and brightest, either. Attracting the educated is important, but cities are also where the poor come to become middle class, where immigrants come to build a better future for themselves and their families. Their needs must be taken up, too–and equally.

Hallelujah for Opportunity Urbanism (and more here).

* A great city needs great suburbs. To pull our cities up, there’s no need to tear our suburbs down. To be successful in the modern era, its important for every part of a metropolitan region to thrive and bring its “A game”.

* “Building on assets” is a trap. The only reason we have any man-made assets in the first place is that previous generations of leaders didn’t follow that strategy. Only building on assets is a strategy about defending the past, not embracing the future. It is the spending down of our urban inheritance. Yes, leverage assets, but also add totally new things to the pot for future generations.

Absolutely.

* We need to look forward, not backward. There is no more corrosive force than nostalgia. We should know where we’ve come from and what we stand for. But we can’t become imprisoned by a yearning for an imagined past that never really was.

* We need to embrace a 21st century vision of urbanism. Urbanism – Yes, but trying to copy Greenwich Village 1950 is not the answer. To find it, we must boldly re-imagine the possibilities of what a city can be and bravely identify what works today-and what doesn’t.

Yep - time to rethink Jane Jacobs.

* We don’t know where this ride is taking us. We’re at a pivotal time in America’s urban history. So much is changing, and more change is yet to come. For our own sake, we should not assume that we’ve arrived where we’re headed, or that we have the answers. If there’s one thing we should take away from the urban planning failures of the past, it is a strong dose of humility.

"Planning for utopia" doesn't work. Cities need the freedom to evolve organically.

This piece first appeared at Houston Strategies.

Higher Gas Tax Unlikely to Gain Support in Congress

Ken Orski — Wed, 28 Nov 2012 11:18:50 -0500

Although some infrastructure advocates are hoping to use the current budget negotiations to win support for an increase in the federal gasoline tax, the idea is unlikely to gain support in Congress or the Administration. While the 2010 Simpson-Bowles deficit-reduction commission proposed raising the federal gas tax by 15 cents/gallon as part of a broad deficit-reduction plan, neither House Speaker John Boehner (R-OH) nor Senate Majority Leader Harry Reid (D-NV) have endorsed the idea. Nor is an increase in the federal gasoline tax popular among the rank-and-file. Most lawmakers see the pressure to raise it as coming only from a narow coalition of liberal advocacy groups and transportation stakeholders that stand to benefit from increased federal transportation spending.

Nor is the Obama administration eager to advocate a gas tax increase whose burden would fall most severely on the middle class ---precisely the constituency it wishes to protect from the pain of any further tax increases. Given this perception, it is almost certain that a federal gas tax increase will remain off the table in the current fiscal cliff negotiations and probably throughout the next session of Congress as well.

Look instead for the states to assume a larger share of responsibility for funding their transportation needs. An early harbinger may be the state of Arkansas whose voters recently approved a half-cent statewide sales tax increase to back a $1.3 billion bond issue to fund highway construction over the next ten years. The measure has been called "the largest infusion of new tax dollars into a state transportation system in recent history." Local referenda supporting public transportation also have appeared on the ballot in numerous states. According to the Center for Transportation Excellence, last November voters approved 70 percent of such initiatives.

In addition to greater local financial participation, look for a shift in emphasis from federal funding to public and private financing of large infrastructure projects. The shift will be fueled by a vastly expanded TIFIA lending authority ---by more than 600 percent, from $122 million in FY 2012 to $750 million in FY 2013---and by a large reservoir of equity in pension funds and private infrastructure investment funds looking for attractive investment opportunities. (TIFIA stands for the Transportation Infrastructure Financing and Innovation Act).

This means an expanded role for tolling, for TIFIA and private sources of capital can only be used to finance facilities that are backed by a dedicated stream of revenue to cover interest payments on the loan and the loan repayment itself. Tolls are viewed by many as a fairer way to pay for new and reconstructed highways and bridges because, unlike the gas tax, they are paid only by the users of the particular tolled facility. In other words, drivers in Montana will not be required to pay for a road or bridge built for and benefiting mainly the residents of say, Texas.

The likely prospect that financing will replace stagnant or dwindling federal funding, dominated discussion among financial practitioners at ARTBA's Public-Private Partnership Conference in Washington on October 10-11. Participants were encouraged to hear that 19 projects worth $27.5 billion have already submitted letters of interest for TIFIA loans in the past three months. Four more projects totaling $1.9 billion have been announced since October. More applications are certain to follow as it becomes clear that the Highway Trust Fund no longer can continue to serve as a source of investment capital for transportation infrastructure.

In sum, rather than hoping for an increase in the gas tax, the transportation community should look forward to three new trends as the most likely response to the perceived inadequacy of current transportation revenue: greater financial participation by state and local taxpayers, a shift in emphasis from federal funding to private and public financing, and an expanded use of tolling.

Uniting a Fractured Republic: Innovation, Pragmatism, and the Natural Gas Revolution

Michael Shellenberger and Ted Nordhaus — Thu, 08 Nov 2012 19:41:12 -0500

Over the last four years, emissions in the United States declined more than in any other country in the world. Coal plants and coal mines are being shuttered. That's not from increased use of solar panels and wind turbines, as laudable as those technologies are. Rather it's due, in large measure, to the technological revolution allowing for the cheap extraction of natural gas from shale. By contrast, Europe, with its cap and trade program, and price on carbon, is returning to coal-burning.

Could President Obama, during his second term in office, turn this homegrown success story into paradigm-shifting climate strategy? In a speech we gave to the Colorado Oil and Gas Association yesterday, we argue that, after a season of ugly ideological polarization, politicians, environmentalists, and the gas industry have a chance to hit the reset button on energy politics.

This will require the natural gas industry to clean up its act, accepting better regulations, cracking down on bad actors, and preventing the leakage of methane, a potent greenhouse gas. It will require environmentalists to consider whether there might be a different path to significant emissions reductions from the one they have pursued over the last 20 years. And it will require Left and Right to put a halt to the tribalism that has characterized the national debate over climate and energy.

— Michael and Ted

Uniting a Fractured Republic

Innovation, Pragmatism, and the Natural Gas Revolution

by Ted Nordhaus and Michael Shellenberger

In 1981, George Mitchell, an independent Texas natural gas entrepreneur, realized that his shallow gas wells in the Barnett were running dry. He had millions of sunk investment in equipment and was looking for a way to generate more return on it. Mitchell was then a relatively small player in an industry that by its own reckoning was in decline. Conventional gas reserves were limited and were getting increasingly played out.

As he considered how he might save his operation, Mitchell turned his attention to shale. Drillers had been drilling shale since the early 19th Century, but mostly they drilled right through it to get to limestone and other formations. Dan Jarvey, a consultant to Mitchell at the time, told us, "When you look at a [gas drilling] log from the 1930s or 1950s or 1970s it is noted as a 'gas kick' or 'shale gas kick.' Most categorized it as 'It's just a shale gas kick' – as in, 'to be expected, but to be ignored.'"

As Mitchell embarked on his 20-year quest to crack the shale gas code, most of his colleagues in the gas industry thought he was crazy. But Mitchell persisted and his efforts would ultimately culminate in today's natural gas revolution.

In doing so, Mitchell upended longstanding assumptions about the future of energy. Just a few years ago, the convention wisdom was that no source of electricity could be cheaper than coal. Today, in the U.S., natural gas is cheaper. As a result, coal's share as a percentage of electricity generated went from over 50 percent in 2005 to 36 percent in 2012. While global coal use continues to rise, the U.S. is at present leaving much of it in the ground. Meanwhile, estimates of recoverable natural gas results in the United States have nearly doubled, growing from 200 trillion cubic feet in 2005 to 350 trillion cubic feet today.

The implications for those of us concerned about climate change are also significant. Leaving coal in the ground has been the longstanding goal of those of us concerned about global warming. Natural gas releases emits 45 percent fewer carbon emissions. In large part due to the glut of natural gas, U.S. carbon dioxide emissions will have declined more in the United States than in any other country in the world between 2008 and 2012 — an astonishing 500 million metric tons out of 6 billion, according to the Energy Information Administration.

While we don’t imagine that any of this is news to most of you in this audience, there is another part of the story that might be. That is the story of the ways in which both the gas industry and the federal government helped Mitchell along the way. In these intensely polarized times, when it seems that almost everyone imagines that either government or corporations are the enemy, and it seems impossible to imagine that the two might actually work together to further the public interest, there are important lessons here too.

1.
As Mitchell considered trying his hand at shale, he cast about to see what was known at the time about how to get gas out of shale. A geophysicist who worked with Mitchell recalled telling him that, "It looks similar to the Devonian [shale back east], and the government's done all this work on the Devonian."

The work Mitchell's geophysicist was referring to was the Eastern Gas Shales Project, which was started in 1976 by President Ford. The Shales Project was just one of several aggressive government-led efforts to accelerate technology innovation to increase oil and gas production. Already in 1974 the Bureau of Mines was funding the study of underground fracture formations, enhanced recovery of oil through fluid injection, and the recovery of oil from tar sands. One year later, the government funded the first massive hydofracking at test sites in California, Wyoming and West Virginia, as well as "directionally deviated well-drilling techniques" for both oil and gas drilling.

The mandate from Congress was for government scientists and engineers to hire private contractors rather than do the work in-house. This was consistent with the tradition of the Bureau of Mines, which would set up trailers around the country to support oil, coal and gas entrepreneurs. This strategy contrasted with the government's nuclear energy R&D work, which had been hierarchical since its birth in the military's Manhattan project. This decentralization proved wise, as it ensured that the information would rapidly reach entrepreneurs in the field and not gather dust inside of a federal bureaucracy.

From early on, Mitchell and his team relied heavily on information coming out of the Eastern Gas Shales project. "We were all reading the DOE papers trying to figure out what the DOE had found in the Eastern Gas Shales," Mitchell geologist Dan Steward told us, "and it wasn't until 1986 that we concluded that we don't have open fractures, and that we were making production out of tight shales."

Through the 1980s, Mitchell didn't want to ask the government – or the Gas Research Institute, which was funded by a fee on gas pipeline shipments to coordinate government research with experiments being conducted by entrepreneurs in the field – for help because he worried that he wouldn't be able to take full advantage of the investment he was making in innovation.

But by the early 1990s Mitchell had concluded that he needed the government's help, and turned to DOE and the publicly-funded Gas Research Institute for technical assistance. The Gas Research Institute, which had worked with other industry partners to demonstrate the first horizontal fracks, subsidized Mitchell’s first horizontal well. Sandia National Labs provided high-tech underground mapping and supercomputers and a team to help Mitchell interpret the results. Mitchell’s twenty-year quest was also made possible by a $10 billion, 20-year tax credit provided by Congress to subsidize unconventional gas, which was too expensive and risky for most private firms to experiment with otherwise.

By 2000, the combination of technologies to cheaply frack shale were firmly in place. The final piece of the puzzle was the sale of Mitchell Energy to Devon Energy, which scaled up the use of horizontal wells. Over the next ten years the use of this combination of technologies would spread across the country, resulting in today's natural gas glut.

Though the collaboration between Mitchell and the government was one of the most fruitful public-private partnerships in American history, it was mostly unknown until we started interviewing the key players involved around this time last year.

After our findings were verified by other researches and reporters, including the New York Times and the Associated Press, some in the oil and gas industry, like T. Boone Pickens, have tried to downplay the government's role.

But the pioneers of this technology have been forthright. "I'm conservative as hell," Mitchell's former Vice President Dan Steward told us, but DOE "did a hell of a lot of work and I can't give them enough credit… You cannot diminish DOE's involvement." Fred Julander said, “The Department of Energy was there with research funding when no one else was interested and today we are all reaping the benefits."

2.
Today marks the end of one of the most divisive chapters in American political history. There is more partisan polarization in Congress than at any time since Reconstruction. There are vanishingly few swing voters. And the ideological divide between liberals and conservatives at times appears unbridgeable.

One of the most insidious aspects of today’s political polarization is the way gross exaggerations turn into ossified caricatures. Left and Right view the other as ignorant, insane, or immoral.
From the Right we have heard that President Obama is taking the country to socialism, and that Big Government is destroying the American dream. From the Left we have heard that Governor Romney would have exported all our jobs to China, and turn Congress over to Big Business. Where this downward spiral takes us is to the conclusion that America is fundamentally broken. The two great institutions of American life — business and government — are viewed by one side or the other as corrupt and nefarious.

Few issues have become more polarizing than energy. Both sides have taken ever more extreme positions. Prominent conservatives have exaggerated both the size of Obama's clean energy investments and the number of bankruptcies. They have described global warming and other environmental problems as either not happening or not worth worrying about. Some environmentalists have taken the opposite tack, exaggerating the negative impacts of gas drilling, downplaying the benefits, and accusing anyone who disagrees with them of being on the take.

As we say in California — everyone needs to chill out. There is too much at stake for America, our environment, and our economy, for such hyper-partisanship to continue.

In our rush to point fingers and interpret everything in catastrophic terms, we have lost sight of the fact that we are the richest nation on earth, and one with improving environmental quality, precisely because the private sector and the government have worked so well together. The failures of Big Business and Big Government should be put in their appropriate historical context.

When the Colorado Oil and Gas Association asked us to give this speech at its conference the day after the election, we agreed on two conditions: that we pay our own way and that COGA invite local environmental and elected leaders to attend. We are glad to see them in the audience, because we need a common dialogue.

As two individuals who came out of the environmental movement, where we spent most of our careers, we are best known for our writings calling for reform and renovation of green politics. In particular, we have advocated that environmentalists drop their apocalyptic rhetoric, which is self-defeating and obscures the very real environmental problems we face.

And we have argued that environmentalists have been overly focused on regulations, when our focus should also be on revolutionary technological innovation, which is needed to make clean energy and other environmental technologies much cheaper, so that all seven going on 10 billion humans can live modern, prosperous lives on an ecologically vibrant planet.

But our work has also focused on reminding private investors and corporate executives of the critical role played by the government in creating our national wealth. While economists have long recognized that innovation is responsible for most of our economic growth, few realize that many of our world-changing innovations would have been unlikely to occur without government support. A short list of recognizable technological innovations includes interchangeable parts, computers, the Internet, jet engines, nuclear power and every other major energy technology.

Consider the information revolution. The government funded the R&D and bought 80 percent of the first microchips. The Internet started out as a federally funded program to connect networks of computers of government. Every major technology in the iPhone can be traced to some connection with government funding. The driver-less robot car that Google has invented relies on technologies that come out of government innovation programs.

While high tech executives who are our age or younger are unaware of the government roots of the IT revolution, the old-timers of Silicon Valley do, and frequently expresses their gratitude for it.

While interviewing the participants of the shale gas revolution, we were struck by how much respect and deference each side gave to the other. In many cases the government scientists and engineers acted as consultants to private firms like Mitchell's — "We never forgot who the customer was," said Alex Crawley, who ran the DOE's fossil innovation program for many years.

As environmentalists, we were taught to be suspicious of such cozy relationships between industry and government workers, that government could not simultaneously promote industry while also attempting to regulate it. But when it comes to technology innovation, those cozy relationships, and the revolving door between government agencies, whether DoD or DoE, and private companies like Mitchell Energy, are absolutely essential to allowing knowledge to rapidly spillover and flow throughout the sector.

And yet, there is also an important role for regulation, not only to protect the public from accidents and environmental degradation, but also to improve technologies and promote better practices throughout the industry. Wise regulation in the long run promotes, rather than hinders, the spread of new technologies and new industries, and this has never been more true than in the case of fracking. While US gas production has taken off, many European nations banned fracking for fear of the local environmental impacts and have started to return to burning coal.

Last August, George Mitchell and New York Mayor Michael Bloomberg announced they would fund a large effort by the states to establish better fracking practices. They called for stronger control of methane leaks and other air pollution, the disclosure of chemicals used in fracking, optimizing rules for well construction, minimizing water use and properly disposing of waste water, and reducing the impact of gas on communities, roads, and the environment.

You would be hard pressed to find very many Americans who would call those reforms unreasonable. They are the kinds of things that die-hard anti-fracking activists and much of the natural gas industry could agree to. And indeed, states like Colorado, and environmental groups like the Environmental Defense Fund, deserve credit for bringing regulators and the gas industry together to improve practices. By squarely addressing the methane leakage problem, and reducing the local environmental impacts, the government and the industry can make natural gas an even more obviously better alternative to coal.

And the good news is that reducing methane leakage is something the industry already knows how to do. Little innovation is required to make sure that old pipelines are not leaking, and that new cement jobs are done properly. Similarly, responsible disposal of fracking fluids is not rocket science, it is something that the oil and gas industry does routinely in other contexts. Promising efforts are also underway to develop more environmentally sound fracking fluids and to further minimize water usage.

There are costs, of course, associated with all of these efforts. But if the history of fracking proves anything, it is that costs will come down quickly. Indeed, if history is any guide, we will see great improvements to fracking technologies and techniques over the next 30 years that will be mutually beneficial to the industry, the public, and the environment, for the history of the shale gas revolution has been a history of incremental improvements to the technology. The water intensity of fracking, for instance, was originally not an environmental problem for drillers but an economic one. Only once Mitchell and others developed methods that required vastly less water to crack the shale did fracking become economically viable.

For all of these reasons, we should both regulate fracking fairly and effectively, and also continue to support innovation to improve unconventional gas technologies. Doing so will help assure a future for gas beyond the precincts in which it is already well established. We also need to support innovation in new gas technologies well beyond fracking practices to include carbon capture and storage, which is more viable economically and technologically for gas than for coal, because gas plants are more efficient, and the emissions stream much purer. In a world in which there may remain significant obstacles to moving entirely away from fossil fuels, gas CCS looks much more viable than coal CCS. As such, we need government and the gas industry to work together to demonstrate carbon capture technologies at sites around the country, similar to how we conducted the Eastern Gas Shales Project.

And the gas industry should support innovation beyond natural gas to include support for innovation in renewables, nuclear and other environmentally important technologies. Championing energy innovation more broadly would do more for the industry than the millions it is currently spending on slick 30-second TV ads and will remind Americans that supporting gas as well as renewables is not a zero sum proposition. Getting our energy from a diversity of sources is in the national interest and gas will thrive for a long time regardless of the energy mix. Moreover, until we have cheap utility scale storage, renewables need cheap gas for backup.

For all of this to happen, the gas industry and environmentalists alike must change their posture toward regulation. While it is the goal of a small number of us to rid the world of particular practices, whether shale-fracking or atom-splitting, most of the rest of us want to improve them.

Over the last 10 years, our message to the environmental movement has been that it must change its attitude toward technological innovation. Technologies are not essentially good or bad but rather in a process of continuous improvement. But there is another side to that story that industry must remember. Regulations that are often bitterly opposed sometimes end up being a boon for industry, paving the way for the broad acceptance of new technologies and pushing firms to improve those technologies in ways that make them more economical as well as more environmental.

In closing we’d like to invoke the title essay of our last e-book, “Love Your Monsters,” which was written by one of our Senior Fellows, a well-known French anthropologist named Bruno Latour. In the essay, Latour monkey-wrenches the Frankenstein fable. The sin of Dr. Frankenstein, according to Latour, was not creating the monster, but rather abandoning him when he turned out to be flawed. We must learn to love our technologies as we do our children, he concluded, constantly helping and improving them. In so doing, we too become all the wiser.

As we consider the implications of the gas revolution for the future of both our energy economy and our environment, we should commit ourselves to the larger effort of improving our technological creations. In so doing, the gas industry and the environmental movement might together update the concept of sustainability for the 21st Century. We should seek not to put limits on the aspirations of 1.5 billion people who still lack access to electricity, nor on the billions more yearning for enough to power washing machines and refrigerators. Nor should we want to sustain today's energy technologies to be used in perpetuity. Rather, we should embrace technological innovation as the key to creating cleaner and better substitutes to today's energy and non-energy resources alike so that we might sustain human civilization far into the future.

Warnings of an "infrastructure Crisis" are Meeting with Skepticism

Ken Orski — Tue, 09 Oct 2012 15:48:14 -0400

Is the "infrastructure crisis" a myth or a reality? Many within the transportation community firmly believe that the crisis is real. They point out that many of our roads, bridges and transit systems are approaching the end of their useful life and are badly in need of repair, reconstruction and modernization. They are convinced that without an ambitious program of investment ---beyond the billions that already are being spent---the transportation infrastructure will continue to deteriorate, rendering great harm to the nation's economy. They find it difficult to understand why politicians and the public do not necessarily share the same sense of urgency. They tend to blame themselves for doing a poor job of "educating" the public about the catastrophic consequences of inaction.

Even though the new two-year transportation bill has barely gone into effect (on October 1), activists already are strategizing how better, i.e. more convincingly, to present the case for higher transportation spending in the next transportation bill. As an AASHTO spokesman reminded us recently, "it is never too early to consider your strategy for making the case that the United States should continue to invest in its transportation infrastructure." "We can't afford to relax," echoed Pete Ruane, president of the American Road and Transportation Builders Association (ARTBA). "We're in a very serious struggle over the future of federal investment in transportation." Similar sentiments have been voiced in various transportation-related meetings over the past several months..

But proponents of greater spending ignore the political realities. With mounting deficits and the shadow of a $16 trillion debt hovering over all fiscal decisions, Congress is not about to vastly increase spending on transportation. Concern about deteriorating infrastructure has failed to resonate with the electorate during the election campaign. Nor did the presidential condidates care to mention transportation in their recent debate on domestic priorities, despite pleas by stakeholder groups to include infrastructure on the political agenda.

Infrastructure crisis believers decry this supposed "indifference" or "short-sightedness" on the part of the politicians and the public. But their anger is misplaced. People recognize and acknowledge the need to modernize and expand the nation's infrastructure. They simply are not convinced by the "sky is falling" rhetoric employed by the alarmists---dire warnings of collapsing bridges and crumbling roads if government does not greatly increase spending on infrastructure.

As the Washington Post editorialized no too long ago, people see no signs of "crumbling infrastructure." They trust their own eyes more than they trust the unverified claims of the experts ---and what they see is highways and transit networks that are well maintained and functioning smoothly and reliably most of the time. They suspect that warnings of catastrophic consequences if spending on infrastructure is not boosted, are overblown, self-serving, and more often than not inspired by liberal advocacy groups, lobbyists and industry spokesmen who have a financial stake in pushing for more federal spending. As one senior congressional aide confided to us, "I don't see our constituents lobbying to raise the gas tax in order to spend more money on transportation."

Moreover, the public is not sure that all of the billions of dollars that the federal government already devotes to transportation ($114 billion in FY 2012) are spent wisely, nor that more money will make the transportation system perform any better (e.g. reduce congestion). They believe that the desire to greatly increase investment in infrastructure must be tempered by the overriding imperative to get the nation's fiscal house in order.

Beyond MAP-21
The fiscal and political climate in the next few years will make the job of convincing the skeptical electorate to support higher transportation spending even harder. Funding constraints will continue to make it difficult if not downright impossible for Congress to commit hundreds of billions of federal dollars in a single legislative package, regardless of which party controls the purse strings. Unwilling to raise fuel taxes, Congress is likely to embrace short-term bills as a convenient way out of the dilemma. Short-term authorizations such as MAP-21 will require only modest transfers from the general fund ---especially if states are willing to step in with increased contributions of their own. On the other hand, a six-year bill would require an injection of nearly $90 billion in general revenue.

To be sure, some in the stakeholder community will contend that longer-term (i.e. five- or six-year) authorizations are necessary to allow for orderly planning and implementation of capital projects. They will argue that short-term bills will not provide the kind of funding certainty that major public works require. But to the extent that large capital investments still figure on State DOTs’ and transit authorities’ agendas, private capital, tolling, and credit instruments such as TIFIA and state infrastructure banks, will provide adequate alternatives to the funding stability that long-term congressional authorizations offered in years past.

The bottom line: regardless of the outcome of the November elections, do not expect a boost in federal transportation spending. Indeed, minor reductions in discretionary programs (TIGER, New Starts) are possible if automatic year-end spending cuts under sequestration are not avoided.

Why Emissions Are Declining in the U.S. But Not in Europe

Michael Shellenberger and Ted Nordhaus — Sat, 21 Apr 2012 14:01:23 -0400

It wasn't that long ago that the U.S. was cast as the global climate villain, refusing to sign the Kyoto accord while Europe implemented cap and trade.

But, as we note below in a new article for Yale360, a funny thing happened: U.S. emissions started going down in 2005 and are expected to decline further over the next decade, while Europe's cap and trade system has had no measurable impact on emissions. Even the supposedly green Germany is moving back to coal.

Why? The reason is obvious: the U.S. is benefitting from the 30-year, government-funded technological revolution that massively increased the supply of unconventional natural gas, making it cheap even when compared to coal.

The contrast between what is happening in Europe and what is happening in the U.S. challenges anyone who still thinks pricing carbon and emissions trading are more important to emissions reductions than direct and sustained public investment in technology innovation.

— Ted and Michael

Yale 360

Beyond Cap and Trade: A New Path to Clean Energy

Putting a price and a binding cap on carbon is not the panacea that many thought it to be. The real road to cutting U.S. emissions, two iconoclastic environmentalists argue, is for the government to help fund the development of cleaner alternatives that are better and cheaper than natural gas.

by Ted Nordhaus and Michael Shellenberger

A funny thing happened while environmentalists were trying and failing to cap carbon emissions in the U.S. Congress. U.S. carbon emissions started going down. The decline began in 2005 and accelerated after the financial crisis. The latest estimates from the U.S. Energy Information Administration now suggest that U.S. emissions will continue to decline for the next few years and remain flat for a decade or more after that.

The proximate cause of the decline in recent years has been the recession and slow economic recovery. But the reason that EIA is projecting a long-term decline over the next decade or more is the glut of cheap natural gas, mostly from unconventional sources like shale, that has profoundly changed America’s energy outlook over the next several decades.

Gas is no panacea. It still puts a lot of carbon into the atmosphere and has created a range of new pollution problems at the local level. Methane leakage resulting from the extraction and burning of natural gas threatens to undo much of the carbon benefit that gas holds over coal. And even were we to make a full transition from coal to gas, we would then need to transition from gas to renewables and nuclear in order to reduce U.S. emissions deeply enough to achieve the reductions that climate scientists believe will be necessary to avoid dangerous global warming.

But the shale gas revolution, and its rather significant impact on the U.S. carbon emissions outlook, offers a stark rebuke to what has been the dominant view among policy analysts and environmental advocates as to what it would take in order to begin to bend down the trajectory of U.S. emissions, namely a price on carbon and a binding cap on emissions. The existence of a better and cheaper substitute is today succeeding in reducing U.S. emissions where efforts to raise the cost of fossil fuels through carbon caps or pricing — and thereby drive the transition to renewable energy technologies — have failed.

In fact, the rapid displacement of coal with gas has required little in the way of regulations at all. Conventional air pollution regulations do represent a very low, implicit price on carbon. And a lot of good grassroots activism at the local and regional level has raised the political costs of keeping old coal plants in service and bringing new ones online.

But those efforts have become increasingly effective as gas has gotten cheaper. The existence of a better and cheaper substitute has made the transition away from coal much more viable economically, and it has put the wind at the back of political efforts to oppose new coal plants, close existing ones, and put in place stronger EPA air pollution regulations.

Yet if cheap gas is harnessing market forces to shutter old coal plants, the existence of cheap gas from unconventional places is by no means the product of those same forces, nor of laissez faire energy policies. Our current glut of gas and declining emissions are in no small part the result of 30 years of federal support for research, demonstration, and commercialization of non-conventional gas technologies without which there would be no shale gas revolution today.

Starting in the mid-seventies, the Ford and Carter administrations funded large-scale demonstration projects that proved that shale was a potentially massive source of gas. In the years that followed, the U.S. Department of Energy continued to fund research and demonstration of new fracking technologies and developed new three-dimensional mapping and horizontal drilling technologies that ultimately allowed firms to recover gas from shale at commercially viable cost and scale. And the federal non-conventional gas tax credit subsidized private firms to continue to experiment with new gas technologies at a time when few people even within the natural gas industry thought that firms would ever succeed in economically recovering gas from shale.

The gas revolution now unfolding — and its potential impact on the future trajectory of U.S. emissions — suggests that the long-standing emphasis on emissions reduction targets and timetables and on pricing have been misplaced. Even now, carbon pricing remains the sine qua non of climate policy among the academic and think-tank crowds, while much of the national environmental movement seems to view the current period as an interregnum between the failed effort to cap carbon emissions in the last Congressand the next opportunity to take up the cap-and-trade effort in some future Congress.

And yet, the European Emissions Trading Scheme (ETS), which has been in place for almost a decade now and has established carbon prices well above those that would have been established by the proposed U.S. system, has had no discernible impact on European emissions. The carbon intensity of the European economy has not declined at all since the imposition of the ETS. Meanwhile green paragon Germany has embarked upon a coal-building binge under the auspices of the ETS, one that has accelerated since the Germans shut down their nuclear power plants.

Even so, proponents of U.S. emissions limits maintain that legally binding carbon caps will provide certainty that emissions will go down in the future, whereas technology development and deployment — along with efforts to regulate conventional air pollutants — do not. Certainly, energy and emissions projections have proven notoriously unreliable in the past — it is entirely possible that future emissions could be well above, or well below, the EIA’s current projections. But the cap-and-trade proposal that failed in the last Congress, like the one that has been in place in Europe, would have provided no such certainty. It was so riddled with loopholes, offset provisions, and various other cost-containment mechanisms that emissions would have been able to rise at business-as-usual levels for decades.

Arguably, the actual outcome might have been much worse. The price of the environmental movement’s demand for its “legally binding” pound of flesh was a massive handout of free emissions allocations to the coal industry, which might have slowed the transition to gas that is currently underway.

Continuing to drive down U.S. emissions will ultimately require that we develop low- or no-carbon alternatives that are better and cheaper than gas. That won’t happen overnight. The development of cost-effective technologies to recover gas from shale took more than 30 years. But we’ve already made a huge down payment on the technologies we will need.

Over the last decade, we have spent upwards of $200 billion to develop and commercialize new renewable energy technologies. China has spent even more. And those investments are beginning to pay off. Wind is now almost as cheap as gas in some areas — in prime locations with good proximity to existing transmission. Solar is also close to achieving grid parity in prime locations as well. And a new generation of nuclear designs that promises to be safer, cheaper, and easier to scale may ultimately provide zero-carbon baseload power.

All of these technologies have a long way to go before they are able to displace coal or gas at significant scale. But the key to getting there won’t be more talk of caps and carbon prices. It will be to continue along the same path that brought us cheap unconventional gas — developing and deploying the technologies and infrastructure we need from the bottom up.

When all is said and done, a cap, or a carbon price, may get us the last few yards across the finish line. But a more oblique path, focused on developing better technologies and strengthening conventional air pollution regulations, may work just as well, or even better.

For one thing should now be clear: The key to decarbonizing our economy will be developing cheap alternatives that can cost-effectively replace fossil fuels. There simply is no substitute for making clean energy cheap.

Tampa to Orlando High Speed Rail: The Risk to Local Taxpayers

Wendell Cox — Fri, 18 Feb 2011 09:32:42 -0500

No sooner had Florida Gov. Rick Scott rejected federal funding for the Tampa to Orlando high-speed rail line, than proponents both in Washington and Tallahassee set about to find ways to circumvent his decision. While an approach has not been finalized, a frequently suggested alternative is to grant the federal money to a local government, such as a city or county or even to a transit agency.

Eliminating State Taxpayer Risks, Creating Local? In an announcing his decision, Governor Scott cited the substantial risks to Florida taxpayers from cost overruns, the ongoing obligation under the federal grant to subsidize operations and the fact that under certain circumstances Florida might even have to repay the $2.4 billion in federal grants. Any local government accepting the federal money would expose itself to the financial risks from which Florida taxpayers have been exempted by Governor Scott's action.

None of these risks is an idle threat.

(1) Capital Cost Overruns: Based upon the international experience, the eventual construction cost overruns for the Tampa to Orlando high-speed rail line could easily run to $3 billion, more than doubling the price of the project (Note on Extent of Taxpayer Liability, below). In light of the recently reported 50 percent increase in California high-speed rail construction costs, even the $3 billion estimate could turn out to be conservative. The problem is that any local federal grant recipient (city, county or transit district) would be responsible for these cost overruns.

(2) Ongoing Operating Subsidies: The ridership projections for the Tampa to Orlando high-speed rail line are exceedingly optimistic. This could well lead to a situation in which substantial subsidies are necessary to operate the trains, despite claims of proponents to the contrary. These subsidies would be the responsibility of any city, county or transit district that becomes a grant recipient.

(3) Federal Pay-Back: If, for any reason, the eventual high-speed rail service levels are not sufficiently high because of lower than projected ridership or if service is canceled, any city, county or transit district could be required to return the $2.4 billion in federal grants. Florida is already paying millions annually for a similar "transgression." In 2009, service reductions on the Tri-Rail Commuter Rail System in the Miami area led the Obama Administration's Department of Transportation to demand repayment of one quarter billion dollars in grants. Tri-Rail was saved from this obligation only by a multimillion dollar Tallahassee bailout. Proponents have claimed that this rail obligation could be negotiated away for high-speed rail. Why was the Tri-Rail obligation not negotiated away in 2009?

By rejecting the federal funding, Gov. Scott has inoculated Florida taxpayers against these risks.

However, there would be no inoculation for any local jurisdiction whose commissioners or city council accepted the expensive "gift" of federal funding for the high speed rail line. Their taxpayers would have to pay. The very financial viability of any such jurisdiction could be at risk.

The Risk Could Revert to State Taxpayers: Eventually, the risk could be again be visited upon state taxpayers as a local government facing virtual bankruptcy would doubtless seek a bailout in Tallahassee, repeating the Tri-Rail experience, though much more expensively. Moreover, canceling a half built project, which might be tempting as costs escalate above projections, would simply not be viable. The political pressure to complete the project, at whatever cost, could prove to be overwhelming.

Delusions About Private Responsibility for Cost Overruns: Some proponents claim that these huge obligations can be somehow transferred to the private builder/operator that is selected for the project. Nothing like this has ever happened in public-private partnerships around the world, and for good reason. Companies do not stash away billions of dollars for cost overruns.

Further, the winning bidder will be a consortium of other companies, established with limited liability by larger companies. The consortium would abandon a project it could not afford sooner rather than later. Any bankruptcy of the builder/operator would be limited to the consortium and would not extend to the parent companies, leaving the local taxpayers to pay.

There is no escaping the fact that the taxpayers of any city or county accepting the federal money would be providing financial guarantees to an international infrastructure industry that has left a "train" of huge and unanticipated financial obligations around the world in its wake (Note on Cost Escalation, below).

Believing in Santa Claus? Public officials, and most recently Orlando Mayor Teresa Jacobs, have indicated support for high-speed rail if private and federal funds pay for it, and state and local taxpayers aren't exposed to liability. This is a wise position, but untenable. Expect Santa Claus to arrive in the midst of a Florida summer before that, with a sleigh full of billions.

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Note on Extent of Taxpayer Liability: This $3 billion is in addition to the already committed $280 million of taxpayer funding. Proponents of the high-speed rail line have assumed that the $280 million would be the limit of taxpayer obligations. As this article shows, the $280 million could be a "drop in the bucket" compared to the likely eventual taxpayer liability.

Note on Cost Escalation: An international team of researchers led by Oxford University Professor Bent Flyvbjerg has found in Megaprojects and Risks: An Anatomy of Ambitionthat similar projects routinely cost far more than taxpayers and other funders are told. They also attract fewer riders and generate less revenue (which can require operating subsidies). The Flyvbjerg team implies that these "lowball" (our term) projections are not accidental but all are the result of "strategic misrepresentation," (their term) which project promoters employ to increase the potential that projects will be approved. The researchers also refer to "strategic misrepresentation" as "lying," which is an exceedingly strong term for academic research and is reflective of the strength of the conclusions.

The Rest of the Story on Krugman and the Economy

Bill Watkins — Tue, 15 Feb 2011 19:38:48 -0500

Paul Krugman really doesn’t like the possibility that there is a structural shift in employment, because it weakens the argument for the massive Keynesian spending spree he’d like to see the government initiate. To that end, he published this piece on his blog February 13th.

Before we go on, some readers may wonder what a structural shift is and why it weakens the argument for Keynesian spending. A structural shift is when employment permanently shifts (well, as much as anything is permanent in economics) from one economic sector to another, say from construction to healthcare.

The reason that a structural shift weakens the Keynesian’s argument is that moving workers from one sector to another takes time. They may need retrained. They may need to move to another location. Think of our construction worker moving to health care. He or she probably doesn’t have the skills to be immediately employable in health care. Some sort of education or training has to happen first.

This poses a problem for Keynesian expansionists, because their argument is that the only problem is a drop in aggregate demand (consumer spending) brought about by….well, animal spirits. Since there is no real problem, government can increase spending (it doesn’t matter what you spend the money on. You could dig holes and fill them back up), fool the consumer into thinking she is better off, and voilá, aggregate demand goes up with the government spending.

Problem solved. It’s a beautiful thing.

However, spending can’t solve the problem of unemployment brought about by a structural shift. It takes time to retrain the affected workers. There are things government can do to speed the process, but spending willy-nilly is not one of them.

Hope that clears things up. Let’s get back to Krugman’s piece.

He claims that unemployment in every sector has just about doubled since the recession began, and that this is proof that no structural shift is going on. He has a nice chart to show the increase in unemployment by sector.

There is a problem though. The Bureau of Labor Statistics—the same source that Krugman claims originated his data—reports that construction jobs fell by 2 million, or 26.7 percent, from December 2007 through December 2010, while education and healthcare jobs grew by1.2 million, or 6.5 percent.

This appears to contradict Krugman’s data, but it is possible that both sets of data are true. If they are both true, then Krugman is being no less dishonest than if he created his numbers out of thin air.
If Krugman is telling the truth when he presents a graph showing that unemployment approximately doubled from 2007 to 2010 in both the construction and the education and healthcare sector, then is must be that large numbers of unemployed construction workers migrated to being unemployed education and healthcare workers.

There is no other possible explanation.

This, of course, completely contradicts Krugman’s argument. If his data are true, he’s using data that confirms a structural shift to argue that there is no structural shift, by neglecting to disclose the jobs data I’ve disclosed above.

Krugman is not a dumb guy. He has a well-deserved Nobel Prize for his work on international economics. He has a career of looking at data, in depth and with insight. His failure to provide the entire story has to be considered something besides an oversight. We have to conclude that he’s purposely being deceitful.

I don’t know why a guy with all of Krugman’s gifts and accomplishments would use data deceitfully. It is a shame, though, that an economist at the top of his profession and with the New York Times bullhorn uses that bullhorn to confuse instead of to enlighten.

Ryan Streeter Making Poverty History: A Short History

Ryan Streeter — Mon, 08 Feb 2010 14:24:26 -0500

Former chief economist of the Organization for Economic Cooperation and Development David Henderson coined the appellation, “Global Salvationism,” to describe the kind of behavior one witnesses at gatherings such as this past week’s World Economic Forum (WEF) in Davos, Switzerland. WEF was created in 1971 so that elites from around the world could gather to “map out solutions to global challenges,” according to WEF’s website. This year’s forum is entitled, “Improve the State of the World: Rethink, Redesign, Rebuild.” WEF’s program summary explains the urgency of the task facing those gathered in beautiful eastern Switzerland this way: “Improving the state of the world requires catalyzing global cooperation to address pressing challenges and future risks.” In an effort to compound jargon with alliteration, WEF uses “rethinking” in the titles of 29 conference sessions, “redesign” 16 times, and “rebuild” 9 times, for a total of nearly one-quarter of all the sessions. With all the turmoil created by the global recession and other “pressing challenges” in 2009, the world’s elites came together this week ready to re-do about everything.

Central to WEF’s annual objectives is what to do about life’s inequities and imbalances. Hardly anything warrants “catalyzing global cooperation” more than the ongoing effort to make poverty history, reduce inequality, and correct global imbalances. WEF has announced that global development is taking center stage on the third day of the event.

How ironic, then, that just prior to their gathering, Maxim Pinkovskiy and Xavier Sala-i-Martin updated findings from their 2009 National Bureau of Economic Research paper, “Parametric Estimations of the World Distribution of Income,” on the economics website VOX. Their findings show precipitous drops in global poverty since 1970—just about the same time WEF began meeting in Davos (Mark Perry wrote about the original paper here).

Between 1970 and 2006, the global poverty rate fell nearly 75 percent. During this period, the percentage of the world’s population living on less than a dollar a day fell from 26.8 to 5.4 percent. The world’s population grew 80 percent during the same period, which makes the poverty reduction all the more astounding. The global Gini coefficient, a standard measure of inequality, fell from 67.6 to 61.2 percent, indicating a drop in inequality as well as poverty. The same trend is found in other measures of inequality besides Gini.

And when one computes a measure of global “welfare” understood in the old-fashioned sense of well-being, we find that life has gotten better faster for a larger share of the world’s population than perhaps any time in history. By deriving a calculation of well-being from GDP and inequality measures, the authors show that between 1970 and 2006, global welfare more than doubled, growing faster than GDP.

The authors also consider the World Bank’s new purchasing power parity (PPP)–adjusted measures of GDP and find that while global poverty increases overall, the rate of poverty actually drops faster since 1970 than it does under more conventional GDP measures. In other words, under the PPP model, the world looks a lot poorer in 1970 than it does using more traditional measures of poverty, but today, the poverty rate is nearly the same regardless of whether one uses the PPP or more traditional measures (see the graph below). Using the World Bank’s adjustment actually has the effect of making it look like we have been doing a better job of reducing poverty over the past three decades, despite how the world looks poorer in any given year.

(Chart available at http://www.voxeu.org/index.php?q=node/4508.)

Now, just days before Pinkovskiy and Sala-i-Martin published their VOX article, Princeton’s Angus Deaton shot to pieces the idea that one can accurately measure global poverty and inequality across countries in his presidential address to the American Economic Association. Deaton’s argument is persuasive and serves as a good reminder that economic measures across different societies are nearly impossible to establish with perfection and complete accuracy. That said, it is interesting that Pinkovskiy and Sala-i-Martin find the same drops in poverty across the various methodologies they test. Something is going on here.

One might draw the conclusion that the precipitous drop in poverty corresponds with the beginning of the WEF meetings in 1971. Maybe the elite gathering has worked! Or, one might conclude liberalization of states and economies is working. During roughly the same period covered by the authors, the percentage of free countries in the world increased from 29 to 46 percent, according to Freedom House’s annual ratings. Liberalization and economic growth go together. One might also conclude that China’s explosive growth, which has carried Asia as a whole from 19 percent to 28 percent of the global economy during this period, has had a significant impact on poverty reduction, not to mention India’s rapid rise in its share of global GDP.

Instead of rethinking, redesigning, and rebuilding the world, WEF’s best minds might consider devoting a full day to understanding what worked the past forty years and figuring out how to “repeat” it.

This post originally appeared at The Enterprise Blog at The American.

Ryan Streeter is a senior fellow at the London-based Legatum Institute and can be followed on Twitter here.

Why the feds should stay out of high-speed rail (and most transportation)

Tory Gattis — Fri, 25 Sep 2009 12:59:59 -0400

Set aside for a minute whether high-speed rail (HSR) makes sense or not on a cost-benefit basis. Regardless of whether it does or not (and some smart people are arguing not), I'd like to make the argument that federal funding has no place in HSR. Instead, it should be left to individual states or regional state coalitions.

The federally-funded interstate system was originally conceived for defense purposes - rapid mobilization - after Ike saw the German autobahns. Freight and people movement were obvious beneficiaries, over short, medium, and long distances. It is a comprehensive network that crosses state lines, which argues for federal involvement. The government made the minimal investment it had to make - road beds - and people/companies paid for vehicles and fuel. Fuel was taxed to pay for it all. If EZ-tag technology had been available at the time, I suspect they would have tolled it all instead to pay for it.

Airports followed a similar arrangement: government provides the landing strips and terminals while private companies provide the vehicles and fuel. Passenger ticket taxes pay for the infrastructure. As airports are a local decision, they are (mostly) paid for locally, although regulated federally for standardization and safety.

HSR is targeted at medium distances only, making it more of a state/regional decision (i.e. a small collection of states). It also requires huge subsidies, as the government provides the track, cars, and energy. There is nothing directly related that can be taxed to pay for it (like fuel taxes for roads and passenger ticket taxes for airports). You could try to tax the rail tickets, but if they were fully priced they would not attract nearly enough riders. So no matter how you slice it, in the end the government (i.e. taxpayers) will be paying the majority of the cost of moving each passenger. The infrastructure cost cannot be covered by direct user fees, as demonstrated in other countries.

Rather than compare HSR to the interstate highway system, the better analogy would be airports. Imagine if California said, "Feds, give us money to build a few airports in key CA cities and provide a subsidized government-run airline to provide frequent intra-state service where tickets are priced way below cost." Put that way, people would recognize the idea as absurd, and tell California to do it themselves if they think it's such a good idea.

The problem is that a simple program that made sense at the time - a federal gas tax to build an interstate highway system - has evolved into a Frankenstein monster of massive federal involvement in enlarged urban freeways, local rail transit, and now high-speed rail - areas where they simply do not belong. Local transportation planners have shifted decision making from "What are the best cost-benefit investments we can make to move people in our area?" to "How to do we grab our 'fair' share of the federal pie, regardless of whether or not the project is something we would consider with our own money?" And that is leading to a lot of boondoggles being built around the country, culminating recently in the famous Bridge to Nowhere in Alaska.

The answer? The feds need to get out of the transportation business beyond minimal maintenance of the interstate highway system (the basic four lanes - not the expanded urban freeways). Let local entities make local decisions on transportation investments, including funding, and a whole lot of waste will magically disappear.

This post originally appeared at Houston Strategies.