Richard Mudge and Scott Belcher make a powerful case for technological advancements in transportation. The return on investment is impressive, it can spur economic growth and reduce emissions. It seems to me that there should be a national plan for transforming the system to bring it into the 21st-century in this way.

This plan would doubtless entail a dramatic boost in investment. Indeed, Moving Cooler found that scaling up deployment of intelligent technology in the transportation system would require substantial government outlays. And since U.S. gasoline demand may have already peaked, according to recent projections by Cambridge Energy Research Associates and ExxonMobil (the link is to last year's outlook but a friend assures me this year's projection won't look much different) we come back to the elephant in the room for many of our discussions: With declining gasoline tax revenues, how will we pay for all of this?

While on the topic of projections, we should remember that development patterns (and much else) could change a great deal. I was reminded of this fact when I saw Haya El Nasser's latest USA Today article, about "boomburg" suddenly becoming a misnomer in many places. I've heard John Horsley of AASHTO make this point most forcefully, saying something like "We can't build for the next fifty years like we did for the last fifty." I saw in a presentation today that Horsley also echoes a quote (author unknown) that Richard Mudge might enjoy: "We didn't prosper economically and then build the highway system. We built the highway system and then prospered economically."

We should think carefully, and deeply, about the next fifty years, and then design transportation policy that helps us achieve a preferred, more prosperous future.

Randall Pozdena’s study has aroused interest and some consider that its conclusions merit further review.

But the study should surely be reviewed on it merits, without regard to the policies of “the web site of the organization that published it, the Cascade Policy Institute”.

We try to shed light on controversial issues — if they were not controversial, Lisa would not ask us to discuss them. Is it conducive to our work to describe entities we disagree with as being “blatantly biased”?

Some of my best friends are biased, but I do not call them that, at least not in public. And I hope I try to learn from them.

The debate over the economic importance of VMT is interesting, but calls for statisticians and econometricians to help sort out the differences between correlation and causality.

I worry, however, that this debate will divert us from the broader truth – that transportation investment and our national transportation network have a vital role to play in generating economic growth. History shows this. Indeed, the economic history of the US cannot be told without the history of transportation. Examples abound, from the Corps of Engineers opening up the Ohio and Mississippi Rivers at the start of the 19th Century, to the Transcontinental railroads, the start of the modern highway movement (“get the farmers out of the mud”) and the Interstate Highway System. These examples have several things in common (they were done on a national or regional scale, large parts were build in anticipation of demand, and the business model varied widely (in terms of mode, finance, and the role of public versus private sectors). Each one also helped to generate new industries, stimulated productivity gains in existing industries, and generated long-term economic growth. Important regional examples include the early development of the subway and commuter rail systems in NY and other major cities.

Much of the debate on this and other blogs seems to come from advocates for a particular solution, who then define the problem we face as a way to justify that solution. This level of debate is entertaining but I believe we risk losing sight of the big picture. What transportation system should we build today in order to stimulate the economy of the 21st Century? For an economy and society that relies on “just in time” everything, I believe that transportation may be more important today than in the past. Reliability and predictability are key and perhaps we should look for a system that offers the user “No Surprises.” The nature of this system will not repeat past models. My personal belief is that we should build a system that integrates transportation with technology and telecommunications. This will likely combine new capacity with real-time information systems and pricing.

We also need to remember the vital role that an effective transportation network plays in stimulating economic growth. This calls for new measures of success. My favorite is to rate transportation investments and operations by their ability to improve overall accessibility to labor and jobs. Accessibility also reflects research findings in the US and Europe about how transportation stimulates economic productivity. This approach is mode neutral and reflects shifts in land use. But it also forces us to look at the reality of where people work and live today rather than assumptions about where they should live and work.

I appreciate the serious discussion. I have read through the Pozdena study exploring correlation and causation issues between VMT and GDP referred to by Greg and Emil, and look forward to comparing it to other literature.

However, based on the web site of the organization that published it, the Cascade Policy Institute, and the steeply slanted, alarmist site advertised at the top of their home page, I'm pretty certain I will want more opinions. Hopefully from less blatantly biased academic, government or other sources.

A good deal of the discussion this week seem analogous to debating how best to get a runner from second to third base in the sixth inning before the game's first pitch is thrown.

What we first need is a national transportation policy with clear goals. Such a policy must incorporate passenger and freight interests and must reflect the diversity of the U.S. and its different types of transportation: rural, metropolitan, intercity and international (and the fact that these are often interconnected). Seen in this light, while VMT is interesting to track and it can help point to important trends about vehicle use, on its own it says very little about whether or not an important mix of national goals is achieved (it might actually help achieve one--say reducing GHG emissions--while impeding another--say economic competitiveness).

In my own view, similar to Gabriel's, the best way to achieve success is to take advantage of the market's efficient pricing mechanism. By better aligning the societal costs of using transportation with the price paid for its use, many of the outcomes desired by contributors to this blog would be achieved. As testament to this point, the data debated here this week prove one thing with certainty: the price of fuel over the last year has impacted the use of transportation just as it would if we priced it more appropriately in the future.

As we consider rather dramatic reforms in transportation I believe we should focus on several key points before we debate a tactical sixth inning situation:

1. What are the goals of our national transportation policy? (e.g., safety, economic competitiveness, environment, and access)

2. As we look to pricing models, what external costs should be included in the price we pay for using transportation? (e.g., congestion, GHG emissions, accident).

3. How should we reform our planning and our process for weighing alternatives to better align local, state, regional, and national investments with our national goals? (e.g., mode neutrality, better inclusion of freight interests, mega-region planning).

4. What set of transportation responsibilities should be subsidized or borne by the public sector? (e.g., transit operations, air traffic control, rural transportation).

and 5. Where should we invest in infrastructure, operations and people to best achieve our goals?

I suspect there would be a diversity of opinions on these five points as well but I do believe the debate and any decisions arising from the debate would be more productive.

Steve Van Beek

Thanks for the opportunity to comment on this important question. It has obviously prompted a lively discussion. In that regard, we wanted to clarify a reference by Greg Cohen to a report, prepared by Randall Pozdena for the National Transportation Policy Project (NTPP) of the Bipartisan Policy Center (BPC), that dealt with the subject of VMT and economic growth (I am the Director of Transportation Policy of BPC).

Mr. Pozdena's report was prepared for NTPP, as one of several research papers that informed the final NTPP report. Mr. Pozdena's paper does not reflect the opinions of the Members or of the staff of NTPP. We did not release the paper, as a BPC publication, nor do we intend to do so. We commissioned Mr. Pozdena's research, because we wanted to learn more about the issue of economic growth and VMT, since NTPP's work emphasizes both economic growth and energy/climate change, as important goals of national transportation policy.

Mr, Pozdena's report draws very careful conclusions about the possible causal connections between VMT and economic growth. While there appears to be correlation between the two, as the author indicates, the method that he uses "does not prove causality, but it does establish a case for it." Mr. Pozdena also qualifies his conclusions by noting the data challenges that are presented.

Mr. Pozdena's policy conclusions advocate strongly for market pricing, as a solution to the climate problem and notes that such a pricing program would reduce VMT, but increase overall economic benefits. His paper does not argue that reducing VMT is bad economically in all cases, and he does not perform a comprehensive economic evaluation of every possible case.

NTPP was informed by Mr. Podzena's paper and by other research. We felt that there was a strong enough link between economic growth and VMT, so that we should not recommend VMT reduction, as a goal or performance measure. The metrics that NTPP recommended included reduction of greenhouse gas emissions and of petroleum consumption, since these relate directly to the national goals at the core of the NTPP report. Our feeling was that, if states and localities could show reductions in these areas, while also demonstrating gains in economic growth (through other metrics), it was not relevant whether VMT was increased or reduced.

The following response was sent in by Scott Belcher, president and CEO of the Intelligent Transportation Society of America (ITS America):

This question is one that should be central to all current discussions regarding the next surface transportation bill. The economic opportunity and prosperity that our nation has enjoyed since the creation of the Interstate Highway System are at risk.

Each day, congestion continues to worsen in virtually every major city and freight corridor, the number of motorists killed and seriously injured in traffic accidents remains at unacceptable levels, and wasteful CO2 emissions from cars stuck in traffic jams continues to pollute our air. Even conservative estimates place the economic cost of congestion and traffic crashes at more than $1 billion each day.

We know that we cannot build our way out of this crisis. Most urban areas simply don’t have any more space to build bigger roads and bridges, even under good economic conditions. Regardless of the various views on land use and VMT policies, I think we can all agree that we need to do a better job of managing our existing transportation system to improve efficiency and achieve greater performance results.

Technologies and operational strategies are here today that can help reduce congestion and emissions, improve safety, and achieve greater system efficiency. In addition, a range of real-time data collection technologies are available that can provide traffic engineers and the traveling public with improved traffic, transit, road and bridge condition, weather, and even parking information to improve system management, reduce maintenance costs, and provide the public with real-time travel information including multimodal commuter options.

According to U.S. DOT data, each dollar invested in technologies like synchronized or adaptive traffic signals returns as much as $40 to the public in time and fuel savings, while reducing emissions by up to 22 percent. When combined with transit signal priority systems, smart intersections can reduce fuel consumption for transit buses by up to 19 percent and bus emissions by up to 30 percent.

Commercial vehicle systems like PrePass, which electronically verified the safety, credentials and weight of more than 55 million trucks last year, were found to reduce delays by over 4.6 million hours, eliminate nearly 111,000 metric tons of emissions, conserve more than 11 million gallons of fuel, and save truckers an estimated $486 million last year alone.

An electronic toll system in Orlando has reduced delays by 57 percent for express lane customers and by 50 percent for cash customers, while decreasing the number of vehicle crashes by over 20 percent.

A smart parking system being deployed in San Francisco will help Bay Area commuters find available parking quickly using a convenient location and payment system, reducing congestion on city streets caused by the estimated 30 percent of motorists who are circling looking for a parking space.

Future systems like IntelliDriveSM combine leading edge technologies like advanced wireless communications, vehicle sensors and on-board computer processing to provide the next generation of advanced safety, mobility, environmental and e-commerce applications.

In the last transportation reauthorization bill, the House-passed version of SAFETEA-LU included funding for deployment of intelligent transportation system. Unfortunately, the funding was removed in conference and we lost a critical opportunity to provide state and local officials with resources to adopt these time-, life-, and money-saving solutions.

In the meantime, other nations are already making strong commitments to ITS technology. China, for example, is further challenging our economic competitiveness by making massive investments in highway construction and ITS solutions throughout its major cities and transportation corridors.

Congress needs to move America forward in the new transportation bill by making a greater investment in 21st Century technologies and innovations that can boost our economic competitiveness and help the U.S. reclaim its leadership role in addressing our congestion, safety and environmental problems.

The reauthorization of the surface transportation bill provides Congress with this important opportunity.

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I'm glad we're getting to the crux of the social agenda of highway opponents here. For in reality, the primary goals the anti-highway capacity crowd espouse don't seem to have much to do with the environment at all. Is the environment just a fashionable cause to hang your social reordering hat on? If the environment were the highest priority, I assume you'd spend more time talking about far cheaper, easier and less intrusive ways to reduce emissions than through federal programs to force changes in where and how people live, work, and shop.

It all makes sense now, seeing as the anti-highway crowd were arguing for similar urban planning solutions many years before the global warming issue heated up.

Given the last post, I'm greatly relieved, James et al, that these social goals are not designed to coerce people into living the way you want them to live. So you simply want to help people live the way they wanted to live all along, right?

If so, I assume you would reject policies that would limit the choice of new homes that can be zoned and built, force people to pay to park in front of their home, add high tolls to their car trips, require paid parking at suburban shopping centers, divert their taxes, and involve the federal government in local land use planning, right? Afterall, these unfortunate souls do not need to be punished for living how they were forced to live, right?

We are in total agreement in fact -- Americans should be free to live where the want to live, work where they want to work, and shop where they want to shop. And as they choose freely without armtwisting from the federal government, we should provide the transportation system that is finanically, politically, and environmentally sustainable to support that free choice. We could start our plan with the one mode of transportation that could theoretically support itself with a reasonably set gas tax paid by its users.

Let's step back a second and think about other reasons that VMT might be increasing. In fast growing western and sunbelt states, we are failing to provide enough affordable homes to meet the needs for a growing workforce. People are forced (yes, they actually do not want to be there according to most polls) to live 100 miles or more from where they work, requiring them to get up before dawn and return home past dinner. If we could get people decent and affordable housing closer to their jobs they would gladly take it. This would make them more productive employees, allow for more time with their families and communities and lower VMT. It also means more income going toward things they need rather than at the pump, effectively shipping it off to unstable regimes half way across the world. Or think about local health centers closing in small towns and all across rural America so that people have to drive further to see the doctor and seek the medical treatments they need. More VMT, less time and income spent on other things. Is that what we're after?

What's always missing in this debate is the notion that what all of us want is the stuff that the VMT helps us get - jobs, schools, shopping, health care. No one wants people to have access to fewer things, but the simple principle of efficiency suggests it would save time, money and perhaps a few wars if we could get more places without having to drive as many miles. And that's not about telling anyone where to live or promoting top-down planning. Far from it. Rather, it is about providing more choices in both transportation and housing. It's about allowing the real estate market to build more of what it knows a shifting demographic wants -- convenient housing in walkable communities with an abundance of transportation options.

It is a mistake to confuse mobility with utility, or past correlations of VMT and GDP with causality. Improving the efficiency of the existing travel system is a recipe for productivity and job growth and can unlock wasted resources and reduce pollution.

There are many ways to boost existing transportation system efficiency. The most effective combine performance-focused system pricing (such as pay-as-you-drive insurance and time and place based road user charges and parking fees), smart infrastructure and service management (such as bus rapid transit and intelligent transportation systems), people-oriented urban and street design to expand travel choices, and smart growth policies that enhance proximity and access without requiring high cost mobility. These enhance the freedom to travel by making cities more efficient. Global experience shows that these approaches can support robust economic development while slowing or capping traffic growth and saving households money.

I recently returned from two weeks in Manila, where severe congestion and lack of travel system efficiency measures curtailed my freedom to get around the city. I would have welcomed a BRT network, time-of-day road pricing, and parking management systems, along with a pedestrian environment that offered direct safe connections to nearby transit and activity centers. Instead, I was met with a transport system that emphasizes roads, flyovers without sidewalks or pedestrian underpasses, and a disconnected, unmanaged transit system. The cost of that was high – I was nearly killed crossing one highway and my eyes burned from pollution.

Compare that with Singapore, where congestion pricing has been in place since 1975, first for the city center, then for the city's beltway. With full toll automation in 1998, the city was able to reduce the tolls for many hours of the week while continuing to meet its traffic management and traffic speed efficiency goals. Today, continuous monitoring of arterials and motorways is used by engineers to adjust the tolls at over 70 charging points on arterials and motorways every several months. If traffic starts to get congested in a particular hour of the week, the toll gets raised for that hour at the right locations. If traffic flows are light, the tolls may be trimmed or eliminated for that hour at one or more locations. A world-class public transport system and investments in social housing, both funded in part by motorist fees, gives people access to jobs and public facilities without so much need to drive. While incomes have risen more than ten-fold, boosting motor vehicle ownership three-fold, congestion has not followed. Thanks to various travel efficiency policies and investments to expand travel choices, the share of trips by public transportation has grown from 40% to over 67% over several decades. Traffic in the central area remains at half the level it was in 1974. Singapore has grown into a world-class economic powerhouse, competing with the United States in fields like high technology, medical and bio-tech, and services, and drawing skilled migrants from across the world. America would do well to learn from Singapore’s experience.

Properly applied, time-of-day congestion pricing can curb pressure to build new roads by preventing the loss of up to half the throughput capacity of highways when they go to stop-and-go conditions during rush hours, delivering close to 24/7/365 reliability and travel time savings. And congestion pricing can spur use of and fund improvements in walking, cycling, public transportation, and ridesharing. Experience in Stockholm and London shows public acceptance of tolling of existing roads when it delivers significantly better performance and expanded travel choices. In both of those cities, two-thirds of resident opposed congestion pricing as it was implemented. But two-thirds came to favor congestion pricing once they experienced the benefits: a 15% to 20% drop in traffic in central areas, leading to 30% to 50% higher traffic and bus public transport speeds, with less pollution and safer, healthier, and more delightful conditions for walking and cycling. But it takes leadership to win those benefits.

It is worth focusing on how US trends have changed in the past decade compared to earlier decades. Recent real estate market research by Chris Leinberger and others shows a large unmet market desire in the US for transit accessible housing, with the market for car-oriented housing being saturated. And while VMT per person had been growing at more than 1% a year for many decades, this pattern was broken 10 years ago. US Gross Domestic Product nearly doubled between 1995 and 2008, while VMT per person remained flat starting in 1999. VMT per unit of GDP rose at an increasingly slow pace before falling in the recent economic downturn.

As I said in testimony before the Senate Banking Committee in July 2009, "Livable communities allow families to live closer to their daily needs such as schools, jobs, shopping, recreation, health care, and other services. This has a compounding effect on reducing GHG emissions by reducing the overall amount that people must drive in four key ways. In addition to allowing people to use efficient public transportation for some of their travel needs, livable communities also reduce the length of car trips that are taken, cut down on vehicle-hours of travel due to less traffic congestion, and eliminate the need for some motor vehicle trips altogether. For example, according to the Center for Transit Oriented Development, of Americans who live near public rail transit, 33 percent regularly use it, and 44 percent also regularly travel by walking or cycling."

Travel efficiency policies can help households cut transportation costs that are a large part of most household budgets. Transportation costs are lower for households in more livable communities with greater access to a variety of transportation options, including public transportation. Such households can spend less than 10 percent of their income on transportation, while households in areas without transportation options beyond auto travel can spend more than 25 percent. Moreover, inefficient land use patterns and development have been shown to increase the cost of housing by 8 percent, or $13,000 per dwelling unit.

Travel efficiency in freight systems can cut the share of empty or half-empty truck loads, boost the use of intermodal systems to shift some freight from highways to more efficient rail or water modes, and improve overall logistics and sourcing.

Such changes to freight systems and efficiency changes to passenger transportation - will flow from better information, better pricing, and better system integration and choices. Opponents of change pretend that there are calls for the federal government to impose decisions about where people can live and how they can travel, but there are no such calls anywhere in the policy realm.

Travel efficiency policies should be at the core of future federal legislation on transportation, economic recovery, and climate policy and be a key element of state and local transportation plans and programs. America can’t afford to throw scarce money blindly at new infrastructure expecting that to solve our traffic, environmental, or economic challenges. It’s time to focus on expanding travel choices and managing the systems we’ve already got for high performance, learning from places like Singapore, the Netherlands, Denmark, and Sweden, and various American regions which are growing their economies with less traffic, more intelligence, and creating more livable communities.

The correlation between VMT and GDP remains extremely tight and must be viewed by looking at rolling averages since spikes or drops in VMT do not necessarily correspond to growth or recession in the economy in the first year or two. In fact recent research done for the Bipartisan Policy Center shows that it's not simply a correlation but VMT actually causes economic growth.

The growth rate for Vehicle Miles Traveled (VMT) continues to have a very strong correlation to the growth rate for Gross Domestic Product (GDP). In general the correlation has grown stronger since 1992 until the 2008 gas price spike and the correlation in growth of VMT and GDP was nearly perfect.

Calculating a 10-year (1998-2007) Pearson-R correlation coefficient is .9679 and when squared becomes an R-square value of 93.7% (which indicates the predictive value between the two variables VMT and GDP). This is also a very strong correlation by any academic interpretation.

The temporary divergence that began with the 2007-2008 gas price spike that Mr. Winkelman calls a "decoupling" only proves that the drop in VMT preceded the economic recession that soon followed . That makes sense since VMT is proven to actual cause economic growth. In fact, less than 5% of the VMT lost in 2008 actually shifted to other modes. The other 95-97% represent travel not taken -- meaning less people working, shopping, recreating, or otherwise growing the economy. Does anyone think this loss of VMT in 2008 did not hurt the economy and that it was actually a good thing for our country? Attempting to pursue policies to reduce VMT while dismissing the impact on the economy would be extremely foolish and hurt a lot of people.

Steve has done yeoman's work during this discussion by attempting to ground it in actual data. I especially appreciate the interesting graph showing that states with lower per capita VMT tend to have higher per capita GDP. This discussion mirrors older, settled one from the energy field -- electricity use. It used to be conventional wisdom that you couldn't cut electricity use without doing the same to economic growth. But thanks in part to new policies adopted by some states and countries -- and I note that California just put in place new television efficiency standards that will save citizens almost a billion dollars annually on their electricity bills -- we can set aside this notion. We should do the same in the case of VMT and GDP.

While this is not a comprehensive cost-benefit analysis, the Moving Cooler report did look at two important components of such an analysis: Cost savings from reduced vehicle use -- fewer trips to the repair shop and gas station, for example -- and government outlays required to implement the measures analyzed (some of which are in Lisa's list above). The projections show that while substantial investment would be required, especially in the early years, the consumer vehicle cost savings soar as time advances.

Personally, I'm not surprised. After we moved to a walkable neighborhood near a transit stop the costs of driving our car plummeted. It was liberating (for my family's budget and wellbeing).

And freedom is precisely the point, at the macro and micro level. The nation can be unshackled from reliance on gasoline, and therefore oil. Individually, many more of us can be unshackled from our car once we have actual choices when traveling.

I could not agree more with Mr. Graves’s assertion that “Personal freedom is a defining characteristic of the American way of life.”

That is precisely why it is imperative that we shift the historical pattern of transportation investment in America. For the last 50 years our federal transportation policy has created a transportation “monoculture,” with driving often the only way to conveniently get from Point A to Point B. The inefficiencies of this car-centered monoculture are apparent every day: congested roads that cost us time; gasoline prices that tax our household budgets; and an over-dependence on petroleum that leaves our economy at the mercy of the world oil market. By depriving us of a diversity of viable alternatives, this monoculture has severely restricted our freedom to choose the mode of transportation best suited to our particular needs.

As we seek to build a new transportation system for the 21st century, it is imperative that we enhance the freedom of mobility of all Americans by providing a variety of options for reaching our destinations, including driving, walking, biking and public transportation.

Providing this range of transportation choices expands – rather than restricts – our freedom of mobility. And among the primary beneficiaries of this expansion of options are those who choose to drive, for the quality of their journey will certainly improve if others freely choose to avoid clogged roadways by using other modes of transportation.

If we are truly serious about freedom of mobility, we should adopt a two-pronged approach to future transportation investment. First, we must ensure that the road systems that we have already built are maintained in a state of good repair. Second, we must build-out the neglected half of our transportation system through smart investments in walking, biking and public transportation.

It is only by creating a truly balanced transportation system that we can give all Americans the freedom to travel as they choose.

Bill makes a good point that VMT and GDP have historically been closely coupled. Given this history, it's very interesting to note that the de-coupling of VMT and GDP indicated in the tail end of your graph. I've updated your graph, using more recent data and extending it out to 2008 and the decoupling trend persists.

VMT and GDP: 1960 - 2008

Data Sources: US DOT, BTS, Table 1-32: US Vehicle Miles, BEA National Income and Product Account Table, Table 1.1.6 Real GDP, Chained (2005) Dollars

This decoupling is even more apparent when we consider disposable income per capita and VMT per capita.

Indexed VMT/capita & Disposable Income/capita, 1960 - 2008

Data Sources: US DOT, BTS, Table 1-32: US Vehicle Miles, BEA National Income and Product Account Table, Table 2.1 Personal Income and it's Disposition

As we work to get out of this economic recession, it will be critical to assess how best transportation policies can optimize use of existing infrastructure and minimize future investments in maintenance and capacity expansion. Travel efficiency policies can slow growth in VMT with net economic benefits as documented in a recent CCAP paper. As CCAP will document in more detail in "Growing Wealthier," slowing growth in VMT can reduce roadway wear and tear, lower fuel use, cut GHG emissions, improve safety and reduce health costs (with more walkable communities and reduced air pollution). Now, that's bang for our hard-earned bucks.

I also point you back to the graph in my previous post showing that states with lower per capita VMT have higher per capita GDP. As states look to grow and diversify their economies, this strikes me as a rather important finding.

Finally, improving accessibility and increasing travel choices will give people more options and flexibility - sounds like a pretty good definition of freedom to me. As documented by numerous academic researchers and real estate industry experts, there is growing and unmet market demand for walkable communities, which is reinforced by demographic shifts and higher fuel prices. Transportation policy in the United States should rise to the occasion to meet this demand for more travel choices and more livable communities.

There’s no denying the need to continually improve the sustainability and efficiency of our nation’s transportation system. Current inefficiencies cost our nation dearly, both in wasted fuel and “lost hours.” However, many of the proposed solutions encroach upon our freedom of mobility and our right to live where we want. Smart growth land-use strategies are simply ways to encourage living in high-density areas offering mass transit, which counters the preferred lifestyles of most Americans. Instead of changing the transportation systems to modify our behavior, we should improve our transportation systems to match people’s behaviors and preferences.

Personal freedom is a defining characteristic of the American way of life, making us the envy of others around the globe. Enacting a plan to reduce vehicle miles traveled (VMT) is a direct attack on the freedom of American citizens, many of whom would never be able to venture beyond the confines of their job or neighborhood if subjected to VMT restrictions. Reducing per capita VMT is also a threat to U.S. productivity. There’s a very strong relationship between VMT and our nation’s GDP. Instead of limiting mobility, we must focus on improving our nation’s crumbling infrastructure, which will alleviate traffic congestion.

While billed as “travel efficiency” policies, congestion pricing and VMT tax (VMTT) are not appropriate means for financing infrastructure, and offer little environmental benefit. In London, home of the model urban congestion pricing scheme, reports show that the program has had little effect on congestion, which continues to worsen. And, much of the surcharge paid by each vehicle for entering the city’s center is spent on overhead expenses. Taxpayers can’t afford to pay high fees for a dismal return and potential declines in commerce, manufacturing and retail sales. Even the Environmental Protection Agency has called congestion pricing “relatively risky to implement” because people would have to pay for a service they were getting for free. Many people would rather endure congestion than pay more. Many low-income family bread-winners can neither pay the high fees nor reschedule their work hours to a time when congestion is lowest. Because of this it’s hard to predict how much emissions would be reduced.

A VMTT system is no more efficient than a congestion pricing scheme. VMTT is an elaborate, expensive, and environmentally unfriendly solution in search of a problem. In fact, the most efficient VMTT system in use in the world today costs 23 cents for each dollar collected, while a fuel tax costs just 1 cent for each dollar collected. Under a VMTT, a less fuel efficient vehicle like a Hummer would pay the same tax as a hybrid for the same amount of miles travelled – clearly not the best plan for the environment or the reduction of carbon.

The trucking industry strongly supports efforts to reduce greenhouse gas emissions and make our country more energy independent, but proposed anti-motorist policies create more problems than they solve. Instead of developing intrusive policies in an attempt to alter behavior and personal choices, our nation’s transportation policy must look toward improving our infrastructure and utilizing available technology to create a more sustainable system.

Thanks, Richard for raising GDP issues. The common wisdom is that policies that slow VMT growth would slow economic growth. However, VMT and economic growth began to decouple in the mid-1990s, and EIA projects that decoupling to continue (see graph below).

VMT per Dollar of GDP, 1970-2030

Source: Dan Klein, CCAP, based on data from DOT, BEA and EIA

More research is necessary to better understand this decoupling, though I suspect that structural economic changes away from energy-intensive manufacturing to more of an information and internet-based economy has played an important role. The economic benefits of travel efficiency measures at the state and local level could lead to even further decoupling of VMT and GDP.

Note that the VMT/GDP trends vary for different states and metro areas. For example, we see clear decoupling trends in California and Washington state (perhaps due to Silicon Valley and Microsoft?) and continued coupling in Florida and Missouri (perhaps due to the tourism economy in FL and more traditional agriculture and industry based economy in MO). See my presentation, "VMT & the Economy: What's Going on Here?"

A simple regression analysis shows that states with lower per capita VMT have higher per capita GDP (see graph below).

State-Level Per Capita GDP vs Per Capita VMT (2007)

Also, Richard, thanks for raising mobility vs. accessibility considerations. I'll hold off on getting into detail here, but recommend it to Lisa for a future blog topic. It's a rich and critical area as it gets to the core "why" of our transportation system and policy. One point I will raise is that given that non-work and 'discretionary' trips comprise the majority of VMT, that employment accessibility is a crucial factor, but not the only one to consider.

This week’s question contains a contradictory mix of possible actions. These include market or price-based actions (congestion pricing, for example); regulatory actions (land use controls from smart growth); and some contradictory investment options (dedicated bus lanes, for example can be very practical, but adding simple carpool lanes have a minimal impact on mode choice).

The use of the word travel efficiency appears misleading, since the real focus seems to be to decrease use of the automobile – and indeed decrease the use of transportation in general. It is not clear to me that such policies are good for our economy and they may not even decrease our overall expenditures on transportation. The only sure way to do that is to shrink the economy – witness the recent drop in transportation logistics as a fraction of GDP (see the Annual State of Logistics Report published by the Council of Supply Chain Management Professionals).

Policy is often developed based on “war stories” or one-off examples and some good ones are mentioned in this blog. But transportation is a network industry (as are telecommunications, the internet and most of public works) and the full economic and social value comes from taking a systems view – best done at the national or super regional level. Done properly, network industries are more than the sum of their individual parts. Examples include the internet, the Interstate Highway System and the NYC subway system. The reason these examples are so powerful is that they provide access to a broad array of economic and social resources along with the individual freedom to take advantage of these resources. In sum, this makes it possible to develop new ways of doing business, new markets, and new industries rather than simply making shifts along our current demand and supply curves.

The US economy has benefited from flexibility in where we live and work. While footloose industries and a mobile population create local winners and losers, overall they also create significant gains in economic productivity – as well as the benefits of personal freedom. I worry that many of the options I hear proposed as ways to improve transportation also make the implicit assumption that people will live and work in the same general areas. This strikes me as bad economics.

One final comment: this week’s question mentions improving accessibility to transportation options. This is really about mobility – or more accurately the potential to move. Having more options sounds positive, but in reality most of us use only one mode for particular trips (modes that vary depending on where and when we need to travel). Accessibility is an important concept, but I would rather see it applied in terms of access to jobs or business access to labor. This concept does not presume a single mode, but rather looks at the network as a whole – and can reflect shifts in land use as well. There is a growing list of research that shows a direct link between increased access to labor and general improvements in economic productivity (a benefit that swamps the costs and benefits of the individual examples mentioned elsewhere). It would be interesting to examine the list of ideas presented in this week’s question and those suggested by others in terms of their likely impact on overall access to labor/jobs.

Governor Glendening -

What data support your assertion that "obesity and respiratory illness are dramatically reduced in more walkable, less car-dependent communities"?

There are far too many "walkable, less car-dependent communities" whose members suffer from appalling health conditions and short life expectancy.

Are you urging the federal government to force Americans to revert to such conditions?

Gabriel

The economic costs and benefits of travel efficiency are generally discussed and understood in long-run macro terms of energy sustainability. These include national security implications and carbon reductions with global climate change implications.

Less frequently discussed are the more immediate and micro benefits. The impact on individual health and health costs is immense. Obesity and respiratory illness are dramatically reduced in more walkable, less car-dependent communities. In addition to having healthier individuals, it can also lead to lower health costs for businesses.

Smart Growth America has found that productivity goes up when employees arrive at work after a walk or transit ride, or brief automobile commute. We have all seen the stress level of colleagues after an hour commute and worries about being on time for an important meeting. Also, productivity starts to go down for employees that face a long, frustrating commute home, including concerns about being home in time for a family dinner.

The benefits of travel efficiencies impact so many other areas. Research in education, for example, indicates students who walk to school do better than those who are driven. Housing affordability is directly impacted by transportation costs. Many foreclosures are the result of major transportation costs on top of mortgages and other expenses. Transportation costs are likely to become even more dramatic once the world recession is over, when per gallon gasoline could return to $4 or more.

Yes, transportation policy will most frequently be decided on the important macro issues of sustainability and climate change. It is the impact on health, business costs, education and housing affordability that will have the most day-to-day impact on the average citizen.

Such an open-ended question is very difficult to answer, as the perspective on costs and benefits differs based on the goal you are trying to achieve. ACT generally answers this question with a focus on providing the most mobility options for the most people and goods with the least overall cost. However, data capturing those full costs and full benefits is sparse, as much of the collection would depend on individual surveying at each point in a decision tree around which trip people choose to take (or do not choose to take) and by which method or mode.

However, we can look at different measures to get a sense of what this might look like. APTA publishes a monthly calculator comparing the savings from using transit versus car usage. While this calculator does not capture the full tax costs of either the transit infrastructure or the roadway, it is a way to measure savings at an individual level. As transportation is the second largest household cost behind housing, this is certainly a legitimate approach.

This sort of user-based approach extrapolated to an entire system is best tracked in Washington State through its Commute Trip Reduction Program. Many research studies have been based on this program regarding commuter choice and cost analysis. Washington State has shown a lower rate of VMT growth than the national average since the inception of the program, which presumably would lower overall maintenance and infrastructure costs as well as reduce the consumption of motor fuels and emissions of pollutants. The Washington State investment is also leveraging a significant investment on the part of the state’s major employers, on the order of more than 18:1 (CTR Task Force 2005 Report to the Washington State Legislature). Employers reported that this investment made business sense, as it contributed to employee performance in a number of areas. This is the premise behind HR 3517, The Commute LESS Act, introduced by Rep. Albio Sires, to include employers in this overall analysis of funding and project decision-making.

Work by the Center for Urban Transportation Research at the University of South Florida as well as the Victoria Transportation Policy Institute has attempted to create this direct link in capturing overall costs and benefits. This work has done a good job of capturing the categories of costs and benefits that would need to be captured in order to have a truly neutral comparison of all travel activities. However, to date the dollars spent on highway and transit infrastructure have been so much larger than those spent on demand management activities and infrastructure that it is impossible to do anything other than looking for the potential benefits at the individual level and how those would roll up on a system-wide basis. Given the individual savings, however, it is worth including support for those measures that support individual commuting and mobility choices in any jobs bill that moves forward in the next few months as well as the eventual transportation authorization bill.

It is not easy to generalize about the costs and benefits of travel. In a command economy one can envisage the government determining what is “good” travel (e.g. walking to work; traveling by public transport) and what is “bad” (e.g. driving children to distant schools).

But societies based on free choices rely on other criteria to distinguish the fruitful from the wasteful: We generally consider acceptable those activities for which users pay all the costs, and less desirable those for which users do not pay the costs. Application of this yardstick to travel leads to the conclusion that travel for which users (or beneficiaries) cover the costs is acceptable, and travel for which users do not pay is unacceptable. Therefore, while seeking to ensure that travelers pay the costs arising from their choices can be a legitimate government objective, “reducing vehicle miles traveled” cannot be.

It follows that the measures listed in this question do not necessarily “improve the efficiency of the existing surface transportation system”. Reducing VMT increases welfare only to the extent that it reduces travel not paid for by those who undertake it. Reducing travel for which users are prepared to pay is likely to cause major harm by inhibiting employment, trade, and other activities basic to economic growth and the pursuit of happiness.

In CCAP’s recent study, “Cost-Effective GHG Reductions through Smart Growth & Improved Transportation Choices,” we found that smart growth and travel efficiency measures that increase accessibility, improve travel choices and make optimum use of existing infrastructure can slow VMT growth with net economic benefits.

CCAP is preparing a follow-up study, “Growing Wealthier: the economic benefits of smart growth,” to more thoroughly assess the net economic costs and benefits of development and transportation investments. Initial findings show that there is compelling evidence that smart growth provides significant net economic benefits via avoided infrastructure costs, leveraged private investment, increased economic activity, reduction in household travel costs, job creation, public health improvements, energy and water use efficiency.

Some examples:

• The Sacramento region’s smart growth plan is projected to reduce CO2 emissions by 7.2 MMTCO2, with $9.4 billion savings from avoided infrastructure costs. Under this scenario, transit operating costs would increase by about $120 million per year and annual consumer fuel expenditures would decrease by $380 million. CCAP calculates the net present value of the increased transit costs, fuel cost savings and avoided infrastructure costs to be $1.4 billion (yielding a net savings of $198 per ton CO2).
• In Atlanta, CCAP calculates that the Atlantic Station infill project will reduce CO2 by a total of 0.63 MMTCO2 over 50 years at a net cost savings, because municipal tax revenues from the project will be greater than what is required to pay back the initial project loan.
• A McKinsey analysis for Georgia concludes that strategic investments in transit, demand management, and freight could yield net economic benefits of over $400 billion over 30 years and 320,000 jobs over 20 years. CCAP calculates associated transportation GHG savings of 18 MMTCO2.
• The Rails-to-Trails Conservancy calculates that increased bicycling infrastructure in Portland could reduce GHGs by 0.73 MMTCO2 by 2040, with a net economic benefit of $1.4 billion from fuel and health care cost savings.
• The Center for Transit Oriented Development reports that Little Rock, Arkansas spent $20 million of public money on the Little Rock Streetcar, which helped leverage $200 million in private investment; Tampa, Florida spent $60 million in public money in the TECO Streetcar, which helped leverage $1 billion in private investment.
• A Brookings Institution study shows that shifting to per-mile car insurancepricing could cut VMT and related GHGs by 8 percent yielding insurance cost savings for two thirds of households, averaging $270/vehicle/year and annual societal savings of $50-60 billion.
• The Center for Neighborhood Technology analysis concludes that due to better accessibility and travel choices, working families in central cities spend 16-22% of their household budget on transportation, vs. 26-37% for working families residents away from employment centers, with no significant increase in housing costs.

It is important to note that infill development can result in higher upfront costs, including adding capacity (for utilities, roads, and other infrastructure), acquiring additional permits (time consuming and complex), updating zoning ordinances, and conducting associated public participation efforts. But consider the Sacramento's case: even if upfront costs were as high as $1 billion, the net savings would be $70 per ton CO2. This underscores the policy case for making it easier to build infill and mixed-use projects given their compelling net economic benefits.

Let’s keep these broad economic benefits in mind as we move forward on national climate and transportation legislation.