Pollution Taxes and an Environmental Trust Fund

We should reframe America’s approach to pollution. Instead of addressing pollution through a regulatory regime, we should use pollution charges to allow the market to allocate the scarce resource of clean air, water, and land. A levy would be imposed on polluters proportionate to their pollution.[1] Fines above and beyond the base rate would be collected on those who exceed permitted levels with especially dangerous pollution levels.

That revenue would be dedicated to support the US Federal Government’s broad collection of agencies that monitor, regulate, protect, and restore the environment, reduce the impacts of humans on the environment, and address the problems that arise when we face environmental emergencies or just dealing with the costs of day-to-day pollution. These agencies include the Environmental Protection Agency, the National Oceanic and Atmospheric Administration, the Federal Emergency Management Agency, and large swaths of the Departments of Agriculture, Interior, and Energy among other environmental programs, as well as the Health sector. Estimates of damages from pollution[2] are similar in magnitude to the budgets of the listed government agencies.[3]

As pollution diminishes, funding declines, pollution control and remediation programs would shrink naturally, since they are not needed as much. If pollution rises, the revenue increases, giving the government agencies the resources needed to address the problem and compensate those polluted upon.

A bipartisan Blue Ribbon Commission appointed by the National Academies would be appointed to recommend rates annually based on the best science and economics of the damages that pollution causes (so if avoidance is cheaper than accepting damages it will be undertaken). Any polluter could reduce their taxes by limiting their emissions. Polluters that find that cost-effective will do so. The rates would be phased in over 5 years to allow smooth and economically efficient transitions.

This proposal lowers expenditures on the discretionary budget from general revenue by pulling the listed agencies off the unified budget. This frees up budget resources that could be used for income tax reform, negative income taxes for people with low incomes, or lowering the budget deficit.

The Environmental Trust Fund, supported by a pollution tax, would incentivize the market to determine the best ways to reduce pollution, rather than relying on government regulations and industrial policies ranging from subsidies and loans to tax credits for favored sectors. Internalizing these negative externalities would reward what we want (pollution reduction) and discourage what we don’t (pollution). This would let individuals and organizations figure out best ways to reduce pollution. It would also provide opportunities for significant tax reforms on the general revenue ledger.

[1] For the purposes here pollutants are those that contaminate an environment with manmade wastes. Air pollutants include (but are not limited to) EPA criteria pollutants Pb, SOx, NOx, Hydrocarbons, CO, PM10, PM2.5, as well as ultra fine particulates, and CO2 and other greenhouse gases. Water and land pollution rules would also be established. Other pollutants as defined by the Blue Ribbon Commission would also be appropriate for taxation.

[2] Knittel, Christopher (2012) “Cleaning the Bathwater with the Baby: The Health Co-Benefits of Carbon Pricing in Transportation” estimates a gas tax on the order $1/gallon would cover the social costs of carbon from cars, and “reduced air pollution would substantially ameliorate the costs of an increased gasoline tax”. This is substantially lower than fuel taxes in many countries. In the US, current gas taxes vary by state but are on the order of $0.40-0.50/gallon (state + federal)

[3] According to the US Energy Information Administration, the US currently consumes about 134b gallons of gasoline annually. http://www.eia.gov/tools/faqs/faq.cfm?id=23&t=10. At $1/gallon dedicated to the ETF, this would raise about $134b (ignoring short run demand response, which is likely on the order of 10%). The actual rates should be determined by the Blue Ribbon Commission. Similar magnitudes of revenue could be raised from pollution taxes on from other economic sectors besides transportation, particularly electricity generation. These funds would be distinct from highway user fees dedicated to road infrastructure.

Current budgets of selected agencies (not all of which are pollution related):

Shut up and take my money – Before I board

Rather than spending decades coordinating on farecards and behind the scenes payment technologies, transit agencies, and other organizations with their own currency, should join the rest of the world and just use standard modern payment technologies. Not special edition MasterCards.  Not new consortiums of region-only standardized fare cards. Use soon-to-be run of the mill NFC-enabled smart phones, cash, and credit cards, i.e. the common forms of money already in our wallet or on our person. But for all of our sake, do it off-board.

Inside my wallet
Inside my wallet

We have credit-card-able parking meters throughout Minneapolis now. Any location worthy of being served by fixed route transit should be worthy of an off-board fare-collection mechanism (to speed boarding), as ubiquitous as modern parking meters, which can take cash, coins, pin-and-chip credit cards, and NFC. One for every bus stop.

If the bus stop doesn’t justify the capital investment of a pre-payment machine, maybe it doesn’t justify fixed route service, and some form of demand-responsive transportation (paratransit, “ridesharing”, etc.) is warranted instead.

Modern parking meters cost about $500 to $5000 to install (depending on which article you believe and the technology). Assuming bus stop collection would be similar, at 12,000 bus stops, that would be $6 million – $60 million (and let’s assume they last 10 years). Of course there are too many bus stops as well. And someone will complain they really cost more because of some obscure standard.

Shut up and take my money via http://knowyourmeme.com/memes/shut-up-and-take-my-money
Shut up and take my money via http://knowyourmeme.com/memes/shut-up-and-take-my-money

However for even $60 million we would speed up bus boarding significantly. If Metro Transit had 70,000,000 bus riders per year (not quite) for 10 years, that is 700 million rides to spread the costs over, or $0.09 per ride. If I am on a bus with 20 other people boarding before I alight (I pulled these numbers from thin air), and every person saves 5 seconds per boarding with pre-payment and all-door boarding (also thin air) (all-door boarding saves at least 1-2s per boarding if there are no alightings, pre-payment speeds this further by up-to 3s per boarding), that’s 100 seconds per trip in personal costs per rider. At $15/hour = $0.00416/second, I save $0.41 per ride. $0.41 >> $0.09 so this is surely worthwhile from a transportation economics perspective, not even considering lowered bus operating costs from an agency that can move its buses faster without on-board payment delays, and reduced costs of on-board fare collection. The faster buses will attract more riders, and thus spread the fixed costs even more widely.

Pre-payment then requires proof-of-payment on-board or pre-boarding enforcement somehow. That enforcement should be self-funding if not profitable, as if the enforcers are not raising even enough to pay their own costs, the system is over-enforced.





Chart of the Day: Climbing “Mount Auto”

 writes about our new book at streets.mn in his Chart of the Day: Climbing “Mount Auto”

Here’s a chart from the new book by streets.mn writers David Levinson and Kevin Krizek called “The End of Traffic and the Future of Transport,” all about trends that are changing how we think about transportation. I managed to get my hands on an (appropriately electronic) copy of it, and it’s full of great charts.

Here’s one from the first chapter, about the decline in driving in America from what the call “the peak of Mount Auto” (opposed against transit use):


And here’s one more, for good measure, showing the “total time spent traveling”:


As the authors describe, there is some debate over whether this driving plateau is permanent. But they suggest that it’s rooted in a large culture and demographic shift. Here’s a quote:

“Many people say the peak is similar to what happened to fixed route transit service in the US (which is now well below one-fifth of its previous importance as described in see Chapter 9). Others claim it is a brief hiatus from the steady march of increasing per capita vehicle travel that followed the same drumbeat almost continuously from 1910 to 2000. Some call the recent patterns of vehicle travel ‘trendlets.’ Many attribute the decline to the pattern to the simultaneous tanking of the US economy; these are the same people who embrace the roaring comeback of total travel in 2014 and 2015, which in terms of total travel (though not per capita) is reaching new heights, due to low unemployment and low gas prices.

But what went largely unrealized was that travel began dropping before the economy tanked. These same people suggest per capita vehicle travel would pick up on its upward path based on the previous century—a forecast possibly reminiscent of the proverbial ostrich with its sand-encased head.”

The book is accessible and wide-ranging, looking at everything from transit to road pricing to self-driving cars to bicycling. Check out the rest here.

3 Videos on public transit operations (bunching, access, egress)

Videos produced by students at McGill did last year for a Public Transit course taught by Ahmed El-Geneidy, Ehab Diab, and Dea van Lierop

Bus Egress (board from the front, exit from the rear)

Access to the metro in Montreal

Bus bunching

These issues are not unique to Montreal, and are common on many existing systems.

New Ways of Counting Pedestrians Could Change City Planning Forever | Next City

Henry Grabar at Next City writes “New Ways of Counting Pedestrians Could Change City Planning Forever” in his Science of Cities column.  Our work is discussed and Brendan Murphy and I were interviewed.

What if what we already know about the locations of homes, streets and workplaces is enough to design a function for foot traffic?

That’s the aim of three transportation scientists at the University of Minnesota, who released a working paper last month with a model for pedestrian activity. Using metrics for economic accessibility (where jobs are), “betweenness network centrality” (a design-based estimate of likely routes pioneered by MIT’s Andres Sevtsuk) and auto traffic, the researchers attempted to predict pedestrian activity at over a thousand intersections in Minneapolis.

It was a bit like your typical algebra problem, in that the team, led by graduate research assistant Brendan Murphy, already had the right side of the equation in place — Minneapolis has a smattering of pedestrian and bicycle counts on file. They had to come up with an algorithm to best correlate known and easily accessible data (like jobs) with those elusive counts.

What they found isn’t shocking: Accessibility to jobs by walking and transit, auto traffic, and certain types of jobs (education, finance) are strongly correlated with increased foot and pedal traffic. But the particular results are less important than the general validity of the concept. Adjust a few coefficients, and you could potentially take the model to cities that don’t already have pedestrian data, and produce a citywide traffic estimate with just a few hours of work.

“There have not been a lot of pedestrian data models because there’s not a lot of data to calibrate them to,” says David Levinson, a co-author and professor who also runs the blog Transportationist. But that will change, he adds, as cities become more cognizant of walkers and cyclists. (See, for example, Placemeter.)

More data makes a better model, which could in turn be used in places where data is harder to obtain, like the megacities of the developing world. “You can take this type of model and apply it to a city where you have no data,” Murphy explains, “and from that predictive model you can inform urban planning decisions much, much better.”

Are environmental regulations truly transportation bottlenecks?

I recently had dinner with Fred Salvucci in Santiago Chile, among other topics, he talked about complaints about environmental regulation. He made a point any queueing theorist could appreciate. He argued that environment regulations are not slowing down transportation projects as a whole. There is only so much federal (and state) funding, and that is the real bottleneck. Loosening environmental regulations will not make any more projects get built in any given year.

UPDATE 9/16/2016

He adds ” A further concern that I have is that many DOTs are most concerned with maximizing construction volume, so are likely tempted to skew their candidate projects towards the simpler to get through the environmental process. These projects may actually be the least important ones to actually implement, so there is likely a perverse outcome in terms of project portfolio.”

Of course it may affect the sequence of projects, projects with more environmental problems, or more social impacts which induce well-heeled people to use environmental regulations as a roadblock, may get deferred for simpler projects without such problems. But shouldn’t they in a functioning democracy?

If environmental costs are real, and we think they are, that should make projects more expensive in order to ameliorate such costs, either through avoidance of creating the damages in the first place, or compensating the losers. This higher costs reduces the number of projects that can be done with the money. So it goes. All the low hanging fruit was eaten years ago.

If those projects still pass a Benefit / Cost test after amelioration, then sure, build them. That is of course less likely than if transport investments export environmental costs to the health sector or agriculture, or property values, or anywhere else that it is not properly accounted for.

Congestion, accessibility, and the future of transportation metrics

Congestion, accessibility, and the future of transportation metrics

By Andrew Owen, Director, Accessibility Observatory

Last month, the Texas A&M Transportation Institute released its 2015 Urban Mobility Scorecard, the latest in an occasional series of reports focused on automobile congestion in U.S. metropolitan areas. Using data from INRIX, these reports estimate the costs of congestion, represented by the number of “extra” hours that automobile commuters spend by traveling at low, congested speeds instead of high, uncongested speeds. The implication is that our cities function best when they allow cars to move fast.

Similar information is available from the TomTom Traffic Index. TomTom’s global look at congestion indicates that only one U.S. city—Los Angeles—makes the top 10 list of most congested cities in the world, and only five U.S. cities make the top 50. However, methodological differences mean that results from the Urban Mobility Scorecard and the TomTom Traffic Index are not exactly comparable. It is interesting to compare the two studies as examples of different ways to represent the impact that congestion has on travelers.

Detailed congestion data are a critical component of our work at the Accessibility Observatory. But for us, automobile congestion is only part of the whole picture. We approach all of our research and evaluation projects with the understanding that all travel is motivated by a desire to reach destinations, and that no study of transportation is complete unless it looks at both the costs and benefits of travel. Traffic speeds are important not because people are happier when they can drive fast, but because speeds, along with trip distance, determine how long it takes travelers to drive to their destination. Accessibility metrics let us measure this outcome directly, rather than relying on congestion as an incomplete proxy.

Additionally, we find it valuable to take a multimodal approach to evaluating transportation systems—and that means using metrics that can be applied meaningfully across many transportation modes. Our Access Across America series of reports demonstrates how a single accessibility metric can be applied to evaluate commuting by driving, transit, and walking throughout the U.S. This allows us to directly compare the impact that these different transportation systems have in connecting people to destinations that matter.

We think that a transportation planning process that incorporates accessibility metrics will enable smarter and more effective investments and operational decisions. In our National Accessibility Evaluation project, we are partnering with organizations that are ready to look beyond congestion to develop a new national scorecard that measures what really matters in transportation: getting people where they want to go by providing access to destinations.

Many types of organizations are invited to join this pooled-fund project, including state DOTs, MPOs, county and municipal governments, and transit agencies. For information about the project or to find out how your organization can participate, use the Lead Agency Contact information provided on the official project information page or contact Accessibility Observatory staff.

Circuity in Urban Transit Networks

Recently accepted

How transit circuity declines with distance, and is lower for real transit trips than random trips, or real auto trips.
How transit circuity declines with distance, and is lower for real transit trips than random trips, or real auto trips.

This paper investigates the circuity of transit networks and examines auto mode share as a function of circuity and accessibility to better understand the performance of urban transit systems. We first survey transit circuity in the Minneapolis – St. Paul, Minnesota region in detail, comparing auto and transit trips. This paper finds that circuity can help to explain mode choices of commuters. We then investigate thirty-five additional metropolitan areas in the United States. The results from these areas show that transit circuity exponentially declines as travel time increases. Moreover, we find that the circuity of transit networks is higher than that of road networks, illustrating how transit systems choose to expand their spatial coverage at the expense of directness and efficiency in public transportation networks. This paper performs a regression analysis, which suggests that the circuity of transportation networks can estimate transit accessibility, which helps to explain mode share.

Key words: circuity, accessibility, transit networks, network efficiency, mode share, public transportation

Main Street – Grand Marais, Minnesota | streets.mn

Grand Marais (French for Great Marsh) (map), on the North Shore of Lake Superior, has the benefit of being primarily a tourist town (the “coolest” small town in America, apparently). It’s nominal population of over 13oo belies its importance as a regional hub in the summer for tens of thousands of vacationing Minnesotans. The core of the town is only a few blocks, but it abuts Lake Superior, and so most of the downtown is within two blocks of the waterfront. There is a co-op grocery, a handful of restaurants, another handful of bars, two pharmacies (that collude on their operating hours and are incapable of actually filling prescriptions — you have been forewarned), some gas stations, as well as hotels and apartments. At the confluence of the Highway 61 running along Lake Superior and the Gunflint Trail (which connects circuitously to Seagull Lake), it is the most active place along Highway 61 between Two Harbors and Thunder Bay (and arguably, more active than the latter). It is also the County Seat of Cook County, Minnesota.

There are lots of people out and about on a Saturday afternoon. The core of downtown is south of Highway 61, and is quite walkable, with preference for pedestrian, but not much traffic between the Highway and the Lake except for people parking and unparking their cars. Sven and Ole’s local pizza (Minnesota-style, in case you were concerned about too much spice) is mobbed.


Can't be a respectable Main Street without pennants livening it up.
Can’t be a respectable Main Street without pennants livening it up.
Grand Marais Liquor Store, Proudly featuring local craft beers
Grand Marais Liquor Store, Proudly featuring local craft beers
Cook County WholeFoods Co-op. Twin Citizens will feel at home.
Cook County WholeFoods Co-op. Twin Citizens will feel at home.
The Grand Marais Lake Front
The Grand Marais Lake Front
Public Parking at the Grand Marais Co-op
Public Parking at the Grand Marais Co-op
Free Parking is copious in Grand Marais
Free Parking is copious in Grand Marais
Bookstore with important dog accommodation instructions
Bookstore with important dog accommodation instructions
World's Best Donuts - Grand Marais, Minnesota
World’s Best Donuts – Grand Marais, Minnesota. Extraordinary claims require extraordinary evidence.
S. Bally General Blacksmithing. Horse-Shoeing Wagons Plows and Farm Machinery
S. Bally General Blacksmithing. Horse-Shoeing Wagons Plows and Farm Machinery
Historical Industrial Building in Grand Marais
Historical Industrial Building in Grand Marais

Cross-posted at streets.mn