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Why “Green Growth” Is an Illusion

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Power Lines

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Again, found in my in box but intriguing enough for me to go and find out something about the people who sent it to me

Changing the Conversation

Economists and finance professionals still promote free market fundamentalism, shrinking from drawing even obvious conclusions about the dangers of unfettered markets. Fiscal austerity and deficit reduction continue to be watchwords of both policymakers and theorists, even as global inequality increases exponentially and unemployment equals or exceeds levels of the Great Depression in many countries. Politics chokes reforms that could bring growth and relief to millions, while the many challenges of sustainable development and environmentally friendly innovation are brushed aside.

Neoclassical economics fails to address these challenges, but the resistance to change is substantial — both inside the discipline and in the world at large.

So that in itself recommended the article to me, but there are other things right now that need my attention. So I am going to simply cut and paste the text (with the links) from the email – and expect to get some reaction in the comments below.

I will say this. During my career there was initially a sort of consensus (known as “Butskellism“) about the need for public sector investment and social programs. That was overturned by the arrival of Thatcher – and a lot of people I found myself working for, who were genuinely convinced of the integrity of the intellectual underpinnings of neoclassical economic theory. I was at best skeptical, but over time became convinced that it was simply the same old reactionary attitudes of the privileged. Yes communism collapsed, but that does not mean that Marx was entirely wrong, and anyway Leninism – and later Stalinism and Maoism – were some distance away from Marxism. Not only that but I was sure Keynes was right since I had grown up during the period when people from my background were at last seeing some benefit from his policies. At least, once we had paid off the huge US dollar loan, which the rest of Europe had escaped due to the Marshall plan. What I also saw was the sheer greed of the people who always yacked on about the Dutch “problem” (of gas revenue being spent on social welfare programs) while they gleefully stuffed their own pockets with the profits from oil and gas drilling in the North Sea and the increasingly dodgy Private Finance Initiative.

In the wake of this fall’s IPCC report on the growing dangers of climate change—including to the economy—a new paper and supplementary analysis from the Institute for New Economic Thinking (INET) find that the conventional wisdom of the dynamics between climate change and the economy actually understates these dangers. It finds that, contrary to popular belief, we cannot have it both ways: We cannot have carbon emissions reduction while also maintaining current levels of economic growth. There is instead an inexorable tradeoff between economic growth and preventing climate catastrophe. The paper is from leading economists on climate change, Enno Schröder and Servaas Storm.

Among its highlights, based on original research and a new set of data regressions:

  • “Green growth” is an illusion: Contrary to optimistic claims by Barack Obama and a host of others, you can’t grow your way to a better climate; consumption growth necessarily drives increasing CO2 emissions. The research finds that outsourcing production to other countries may hide this relationship between economic growth and emissions, but it’s not possible to de-link the consumption that accompanies rising living standards with rising emissions.
  • To stabilize the climate, future economic growth must be well below the historical income growth rate of 1.93% (1971-2015)—even with unprecedented reductions in carbon and energy intensity. The hard truth is that, based on even optimistic assumptions concerning future reductions in energy and carbon intensities, future global growth will be compromised by such climate constraint.
  • The present fossil fuel-based socioeconomic system, which was built over two-and-a-half centuries, now must be comprehensively overhauled in just 30 years, and not in a few countries, but globally.
  • To avoid a climate catastrophe, a radically different strategy—a concerted policy shift to deep de-carbonization—is needed. That means a dramatic shift from current practices: a fundamental disruption of hydrocarbon energy, production, and transportation infrastructures, a massive upsetting of vested interests in fossil-fuel energy and industry, and large-scale public investment.

The supplementary analysis I mentioned is the full debate INET is hosting on the topic. It includes analysis by Gregor Semieniuk, Lance Taylor, and Armon Rezai that reinforces many of Schröder and Storm’s findings, as well as a comment from Michael Grubb, professor of energy and climate change at University College London, who offers a more optimistic view of growth during decarbonization, and subsequent response by the aforementioned scholars.

Like I said I hope that others will take a hard look at this, particularly since I am immediately concerned about issues like climate justice – fair and equitable climate action. Plus, of course, reversing the recent rapid growth of inequality.

Written by Stephen Rees

December 6, 2018 at 3:19 pm

Book Review

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This review has been removed.

The representative of the PR firm pushing the publicity campaign for its publication  has a different view of the meaning of “Fair Use” which, if followed, would have made this review incoherent. I am not willing to do that.

 

 

 

 

 

 

 

 

 

 

 

 

 

Written by Stephen Rees

September 27, 2018 at 1:23 pm

BC Budget 2018

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You can read the whole thing on the BC Gov website or Justin McElroy on the CBC ‘s summary. Basically a commitment to increase necessary spending in the right areas which is being funded by increases in taxes on the corporations and the wealthy. So I am generally in favour.

But what is missing is a much needed correction of former BC Liberal policies which saw a giveaway of our natural resources. Once upon a time oil and gas revenues from leases and royalties made a significant contribution to our provincial budget. That is no longer the case, and ought to have been corrected by the new NDP (+ Green) government.

Two reasons leap out. Horgan retains Christy’s silly obsession with LNG, as well as Site C (which will increase GHG emissions) and, quite possibly, given the federal Liberals commitment the potential TMX pipeline expansion too. Our emissions are not going down even though it is quite clear from the state of the Arctic ice alone that this is a problem we are not tackling. Melting permafrost, with consequent releases of methane and mercury, are immediate threats, not something in the future.

But secondly the whole budget rests on a somewhat hopeful outcome of the ICBC debacle. I think the idea that somehow economic growth and a reasonable approach from personal injury lawyers is going to be enough is overly optimistic. We are going to need the revenues from oil and gas royalties and leases sooner rather than later.

But also, the whole fight with Alberta over the pipeline starts to look a bit different  when you consider how much diluting bitumen for pumping down the pipe depends on BC natural gas and its condensate. (For that thought I acknowledge the twitter feed of Eric Doherty.) The entire project is based on a falsehood, that there will be a market in Asia for dilbit at a higher price than the US refiners are currently willing to pay. It becomes less attractive to the US market (where nearly all of the exports go now) if the BC fuels it depends on have to pay some fairer share of the costs on our local environment and the fact that the resource is not renewable. There is a real reason to fear the loss of jobs at the Burnaby refinery if TMX is all about exports. We need to make sure that we are getting money for value. That isn’t case at the giveaway prices set by Clark.

AFTERTHOUGHT

Yeah, well there was something else that wasn’t in the budget. It would have been really welcome if the NDP had reversed some of Christy Clark cuts to the Public Service Pension. Of course, when these were announced they came with the message “these changes protect your pension” but what they actually meant was that the government was going to stop picking up the tab for some essential health services – so the pension paid out now has to pay for the things that are no longer covered. First up was MSP, of course, but at least that will be going if not immediately. Then there was extended health care, where coverage is now distinctly chintzy. A couple of fillings today cost me $200. And I will need either a denture (over $2,000 – some coverage) or an implant (near $7,000  – no coverage at all) soon. More of that would have been covered under the old plan.

And of course many Canadians have no dental coverage at all.


“As announced in September, starting on April 1 the carbon tax will rise by $5 per tonne of carbon dioxide equivalent emissions. It will be the first of four annual increases and will bring the price on carbon to $50 per tonne of emissions in 2021.”

source: The Tyee

Written by Stephen Rees

February 21, 2018 at 3:58 pm

Should the rich be taxed more? A new paper shows unequivocally yes

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This Guardian post from Sunday covers the ground that can’t be in a ten minute radio interview. The toll removal commitment made by the NDP was not accompanied by any discussion of how the required funds would be found. The money raised by bridge tolls will now come from the provincial budget – stayed tuned for that announcement.

The problem revealed by the toll removal is that we still have not dealt effectively with how to pay for Translink. And the probability that the Mayors’ preferred alternative – road user pricing – is now hostage to the “Toll Free BC” slogan.

But there are people who have done very well indeed from the 16 years of BC Liberals. Not the general population, of course, just the privileged. The people who already had plenty have got much more. The inequity of the policies pursued by right wing governments, and vacuity of the “policy” framework based on falsehoods such as “trickle down theory” and ” the rich are job creators”, has been widely exposed but oddly not generally accepted. The fact that people still vote for these parties against their own interests has also been widely noted.

Is it actually likely that Mr Horgan will open the can of worms that is Translink funding? Will he really bring in more progressive taxation on the super rich? Or will he decided that the over heated property market in Vancouver allows him to rake in more from property tax which is always the favourite target for provincial politicians, as that is the one source of revenue that they don’t get the blame for?

While the article I am citing above does not mention Canada or BC the general principles do apply – which I why I am linking to it. Because I think you need to read that rather than whatever bright idea someone like me could come up with. Well researched, properly cited and evidence based policy recommendations – backed by hard data – is worth far more than just opinion.

If you would like to listen to me pontificating on Roundhouse Radio 98.3FM on this subject that is now online. Just make sure if you want to point other people to that link through social media you use  @Roundhouse983 and @mornings on twitter and Instagram and ‘Roundhouse Radio’ on Facebook.

Written by Stephen Rees

August 29, 2017 at 10:09 am

BC Natural Gas Revenues

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The graph comes from a tweet by Eric Neilson.

When you listen to Carole James present her interim budget in the fall this picture is what you need to bear in mind.

Written by Stephen Rees

August 22, 2017 at 10:59 am

Book Review: “Understanding Planned Obsolescence”

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There is something very post modern about this review. I was offered a copy of this new book (out 3 January 2017) to review, but what I got was an ebook hobbled by Digital Rights Management. It expires in a month and I am not allowed to cut and paste any quotations from it. Now I may not know much about copyright but I do understand the concept of “fair use”: which includes quotation!

I am going to cut and paste what I can from  the blurb on netgalley and the publisher’s press release. (see below the line)

The reason that I wanted to read the book was my irritation at getting this tweet

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The iPad mini in question is less than two years old. I have determined by reference to the book that I am not alone in this experience, and indeed it appears to be a long established policy of Apple. Indeed within the product cycle, the life of the hardware is prescribed – and there will inevitably come a day, long before the device in question is beyond repair, when its operating system will not get updated any more. There is a case in the book of the iPod whose battery life was designed to be 18 months, and the battery could not be replaced by the user. There is also a documented legal case of an iPod mini designed and sold as an adjunct to exercise which failed when it came into contact with human sweat. Apple’s advertising showed the device attached to human bodies under exertion!

There is nothing new about planned obsolescence.  I read Vance Packard’s The Wastemakers at East Ham Grammar School when I studied A Level Economics (1964-66). Everybody knows about GM’s policy of annual model changes based simply on design as opposed to technical innovation. And the cartel of lightbulb makers who made their products fail earlier so that they could sell more of them. My Dad told me about British carmaker Armstrong Siddeley that went bust because their cars were built to last – and no-one ever bought another one having no need since the first one they got was so well made and reliable. I fully expect my 2007 Toyota Yaris to see me out – unless there is a sea change at the strata council and I could install a charger for an electric car. Or Modo relents and puts a shared car in our neighbourhood.

If you are a student then you will be comfortable reading this book. It is remarkably short – I read it cover to cover in two hours or so – and is well annotated and referenced. It does acknowledge Brexit – which will probably remove British consumers from all the EU protection offered to consumers, which is remarkably advanced compared to North America. But was obviously written pre Trump. With leaders like Trudeau and Clark we cannot expect anything other than continuing adherence to the best interests of their funders. And just as the fossil fuel industries will ignore the carbon bubble for as long as possible, we can confidently expect the 0.01% and the corporations they control to continue to ignore both the pile up of garbage and pollution and the growing shortage of critical raw materials (like rare earths) as long as their profits increase and remain largely untaxed. So acquiring this book if you are an activist and wishing to bring about some change is likely to disappointing.

But if you are really in need of an education in the theory of planned obsolescence this might be worth forty quid to you (CAN$66.45 at the time of writing). But as far as prescriptions go, there’s not much. The certainty that the “current hegemonic paradigm will not allow humans to remain on this planet much longer” – and therefore the need to “walk in search of new patterns, new models, new meanings to then build new paths, new paradigms”.

And that is about it.

 


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Written by Stephen Rees

December 19, 2016 at 3:38 pm

Canada (and BC) can grow GDP and cut GHG at the same time

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I came across this story by clicking on link bait “Something else Donald Trump is wrong about” on Vox. But I decided not to simply retweet that, firstly because we have all seen far too much about that fake tan monster and secondly this is important in both a Canadian and a BC context. (And I thought the people I wanted to reach might be less interested in that attention grabbing headline – “here’s some good news about the planet” seemed better to me!)

The Sarah Palin of BC politics currently occupying the premier’s chair is convinced that LNG is both an economic saviour and a way to reduce GHG emissions. It is, of course, neither.

Our newly elected  Liberal government in Ottawa – elected on promises to reduce GHG and committing in Paris to hold global warming below 1.5℃ – is now wavering. Not only because they allowed the Woodfibre LNG plant to go ahead, despite the very obvious shortcomings of the current (i.e. previous Conservative, Harper driven) EA process. But also because of the re-election of Brad Wall, which was obviously what Catherine McKenna must have been worried about when she started talking about national unity as being more important than the survival of life on earth.

So what Vox did was reprint a table from the World Resources Institute which shows that 21 countries have managed to reduce their GHG since 2000 while at the same time as increasing their GDP.

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By the way, the stated reduction in US emissions is has been shown to be wrong, mostly because of the way they have counted methane.

You will notice, of course, that Canada is not among them. BC, of course, had been following a somewhat different track thanks to its adoption of the carbon tax. But that progress has been slowing, as the carbon tax has been stalled, and so much attention is now devoted to exporting fracked gas. Not only is the market for LNG now swamped, so that finding a customer for BC LNG will not be easy despite our generous tax and royalty regimes, but the way that methane leakage from fracking and LNG processing is measured has been updated with better data to show that it has little advantage over coal in reducing GHG.

There is no one answer to how this decoupling has been achieved – but there are some useful pointers in the article you just have to scroll down below that big table. But also there is, in BC, at present, a really good analysis of just how BC can improve its performance. And if you suppose that it might just be possible that none of the proposed LNG plants actually get built, and we elect a government in BC that is actually serious about reducing both CO2 and CH4 emissions – as opposed to just taking credit for past success – then progress does actually seem possible. Although if we try to do both, it’s very unlikely.

At the time of writing, there is still time to make yourself heard as part of the consultation on the BC Climate Leadership Plan. But even so, the table above ought to enough to silence the people who keep talking about growing the economy and saving the environment as though they were at odds with each other.

UPDATE From The Tyee interview with Nancy Oreskes, Harvard climate professor and co-author of Merchants of Doubt

Oreskes said Canada cannot seriously address climate change while also building more giant pipelines to deliver Alberta’s oil sands bitumen or British Columbia’s fracked natural gas to proposed export terminals on both coasts.

“If Trudeau can say we’re going to do all these things,” she said, “that says to me that they have not truly assimilated what is at stake here.”

Trudeau raised eyebrows when he told a Vancouver sustainable business summit last month that “the choice between pipelines and wind turbines is a false one. We need both to reach our [climate] goal.”

B.C. Premier Christy Clark similarly promotes liquefied natural gas as a climate solution: a “bridge fuel” to help China get off dirty coal power.

Oreskes called their positions dangerously “wishful thinking.”

Written by Stephen Rees

April 5, 2016 at 4:58 pm

“NIMBYs in the twenty-first century”

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The title comes from an article in The Economist (paywalled) which discusses the work of a graduate student who has challenged the very successful book by Thomas Piketty “Capital in the 21st Century”.

I have had to return the copy that I was reading to the library: the wait list is long and the number of copies limited. If you want a good summary then Cory Doctorow has done a very good job of that.

Matthew Rognlie

On March 20th Matthew Rognlie (pictured), a 26-year-old graduate student at the Massachusetts Institute of Technology, presented a new paper at the Brookings Papers on Economic Activity. Although the paper began its life as a 459-word online blog post comment, several reputable economists regard it as the most serious and substantive critique that Mr Piketty’s work has yet faced.

Without actually quoting the whole of the article, the point I want to tackle is this. “housing wealth is the biggest source of rising wealth”

Economist graph

“Policy-makers should deal with the planning regulations and NIMBYism that inhibit housebuilding and which allow homeowners to capture super-normal returns on their investments.”

Now this seems to me to be a very familiar assertion that I have read from the same gang of dealers in secondhand ideas who like to attack government spending on transit. They have asserted more than once that the ALR is responsible for unaffordable housing in Vancouver. For instance here’s the Fraser Institute – citing Wendell Cox (pdf)

The land scarcity created by the ALR has rendered Vancouver housing the most “severely unaffordable” of any major city in the 265 metropolitan markets across Canada, the United States, Australia, New Zealand, the United Kingdom, and Ireland, as analyzed by Wendell Cox and Hugh Pavletich (2009) in their fifth annual International Housing Affordability Survey

And the same thing in almost any city that imposes an urban growth boundary to limit sprawl.

Dr. Shlomo Ange of the Stern School of Business (NYU) Urban Expansion Project puts the issue simply in his introduction:where expansion is effectively contained by draconian laws, it typically results in land supply bottlenecks that render housing unaffordable to the great majority of residents.

The Economist of course does not have to reference these reports since, as we learned recently, the marketplace of ideas has adopted this notion unquestioningly. Or has it?

The argument stems from the idea that markets are better at determining everything than policy makers. Except that markets can only determine the level of use of those things that are priced. And most of the things that are of real value – breathable air and clean water for instance – are not priced. Land capable of producing food is priced far below what it would be as land designated as suitable for development. Smart Growth seeks to protect this land from development by ensuring that land within the growth boundary is better utilized.

Smart growth planning allows us to create new housing choices that are more affordable. We need to:

  • make better use of existing land and buildings (for example, by filling in vacant lots and allowing homes to be built over stores)

  • allow a mix of home types in every neighbourhood, like secondary suites, granny flats, and single- and multi-family dwellings

  • provide a mix of homes with commercial in the same neighbourhood

  • carefully add new homes in existing neighbourhoods, such as units in the basement or above the garage (to increase rental supply and provide extra income to help with the mortgage)

  • provide easy access to jobs and transportation choices, so households can save on transportation costs

In fact the very idea of “affordable housing” might be misleading because it fails to encompass travel costs. Indeed the old saw about buying a house was “drive until you qualify”. The amount you can borrow to buy a house is controlled (in our case by the rules of CHMC) but no-one controls the amount of time and money you spend commuting. This idea is encapsulated neatly in the last of those bullet points. It is also the case, of course, that in markets like Vancouver, many people cannot afford to buy and renting is increasing in popularity even if the supply of rental housing may not be responding as we might like.

It also ignores all the evidence that the conventional model is unsustainable. All the infrastructure that is needed to support sprawl makes it financially unaffordable – as Charles Marohn admirably demonstrates at Strong Towns. The US congress has been arguing for years how to patch up the crumbling interstate system, given their refusal to even contemplate raising the gas tax which funded its construction but not its maintenance. And the bits which are usable fill with traffic congestion which building more roads has never relieved. This makes for very unhappy commutes (see Charles Montgomery “The Happy City”) but again human happiness is another one of those externalities which markets ignore. Prices were supposed to be based on “utility” but every study shows that simply piling up more cash fails to make anyone happy.

Indeed the greatest failing is that the inequality puts more resources in the hands of those who pay politicians to adopt policies that are disastrous to human existence but are good for their short term profit.

What bothers me about the Economist piece  is the nonchalance which goes along with omniscience. It goes without qualification what policy makers must do. Because all we are talking about is inequality and where wealth comes from. So none of those dull externalities need get considered at all.

And all of this it seems to me has been covered by others more able and capable than I, but that work does not seem to get cited when I go looking for it. I am actually not too dissatisfied by this piece, but at one stage I was seriously considering crowdsourcing it. I am sure that my regular crew of commentators will be piling in but if you know of other articles which deal with this particular debate (“the impact of growth control on housing affordability” gets 54,700 hits) in particular with reference to either this region or the Pacific North West, by all means let me know.

Afterword

Just how unaffordable is Metro Vancouver – and how will that change? VanCity has this forecast

Of course, there is a policy that could deal effectively with affordability, just as there is a policy that would end Homelessness. It simply requires the provision of subsidised housing. Of course those who oppose taxes on the wealthy will howl with rage. But all that we have to do to free up some resources is stop subsidizing fossil fuels – and rethink our agricultural subsidies too, while we are at it. It is ridiculous that corn and sugar production is subsidized when we are dying from diabetes, obesity and heart disease. All of which are also strongly associated with sprawl. Utah – hardly a radical liberal sort of state – eliminated homelessness by simply housing the homeless, which turned out to be cheaper than making them stay on the streets.

Written by Stephen Rees

March 25, 2015 at 4:08 pm

The Cost of Energy

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The recent IPCC report has been very clear about the need to get out of fossil fuels. They are also realistic in predicting that it is going to take a while to turn things around. What surprises me is the continued reluctance of the elite to absorb the message – but maybe there is an easier way to get across to them.

There has already been a significant change in energy markets, not just because the price of renewables (solar, wind and so on) has been dropping rapidly. The rush into fracking for oil and gas in North America has depressed oil prices.

Screen Shot 2014-11-04 at 8.10.26 AMNow it may be argued that this is merely short term volatility and that OPEC could cut back its output to prop up prices. But equally, OPEC may be getting concerned about losing market share and needing to protect its revenue stream. Sales at lower prices being better than no sales at all.

I have already been arguing in other fora – such as twitter and facebook – that the dropping oil price ought to be a much bigger consideration for opponents of increasing fossil fuel dependence. The current crop of LNG projects in BC seem to me to be the most obvious candidates. British Gas has already pulled out of Prince Rupert: can Squamish be far behind? The provincial government has already dropped its revenue estimates, even though it was already willing to pretty much give away the resources through low royalties, it has recently cut the tax regime too. I do not understand why they continue to pursue projects which offer very little in terms of employment (relative to other energy opportunities) and now little revenue, especially in the near term. “British Columbia’s auditor general says doing business with the oil-and-gas industry has cost the province’s coffers about $1.25 billion in royalties even before most of the product has been pulled from the ground.” Vancouver Sun

But the pipeline projects that are essential to expanding the tar sands and getting diluted bitumen to oil refineries also  seem to be not only deservedly unpopular, but increasingly unnecessary. The tar sands are already heavily subsidized, but even so “ninety percent of future oil sands projects at risk from eroding oil price” according to a new report from Carbon Tracker.

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I have long argued that the only thing to do with difficult to extract fossil fuels is to leave them in the ground. For one thing it is now clear that we have more than enough geothermal energy resources available to meet all our needs. While not strictly speaking “renewable” it is not likely that the earth’s core is going to cool down rapidly if we exploit these resources anymore than putting up solar panels to capture sunlight risks dimming the sun. The good thing about geothermal is its constant availability which makes it really useful to provide power when sunlight and winds are not available.

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The problematic thing is that transportation, especially in North America, is still heavily dependant on energy dense liquid fuel. Even though batteries are getting better, and energy efficiency improvements such as hybrids are helping reduce demand for gasoline, much more attention is being directed – quite properly – to the fall in car use. I think that is much more to do with the falling buying power of consumers than secular change in transport demand. The grab of the 1% has gone much too far, and the economic impacts of the impoverishment of the rest of the population are now becoming more apparent. So far the knock on effects into social unrest have been relatively weak, but that cannot continue indefinitely, absent a change in policy direction from most national governments. Obviously austerity is not working and cannot work. The changes in mode to walking and cycling can be achieved in some urban areas, but in most suburbs significant shifts in land use are needed to put origins and destinations in better proximity.  That is going to take some time to achieve.

Politicians Discussing Global Warming

Written by Stephen Rees

November 4, 2014 at 9:24 am

How could they get it so wrong?

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There’s a very entertaining piece on the Port Mann Bridge by Neil Salmond on Strong Towns. It is all about what people do when faced with a choice between a fast, tolled route and a slower, untolled route. Or rather, what they say they will do. Apparently in Ohio drivers said they would drive out of their way to avoid a toll. Which, of course, is exactly what they are doing here: driving over the Patullo instead of the Port Mann. Even though the extra cost in gas alone is often going to be about the same as the toll, as demonstrated by a neat little gizmo put together by Todd Littman and the Sun. There’s also the fact that traffic forecasts in general seem to have made a fundamental error by simply extrapolating from the past. Just like steering a ship by staring at the wake, this method has some fairly obvious shortcomings. When circumstances change, so should expectations.

This blog has often berated transportation models – and modellers – for the shortcomings of the standard models. This particular issue is one that is often key to making decisions about choices for the future. How do you assess the willingness of people to choose a new route or mode which is currently not available?  Two methods are in use: Revealed Preference (RP) and Stated Preference (SP).

The first one, RP, makes some generalizations about trip behaviour as a combination of time and money known as “generalized cost”. Data is collected about trip making and this is examined in terms of the trips made and the way they get distributed between routes and modes. This gets quite sophisticated as we know that travel time is not valued by users the same way in different modes. People prefer to be moving rather than waiting, and prefer to be seated and  in vehicles under most sets of circumstances. So the values ascribed to time are different: people who are stuck in traffic or waiting for a bus are conscious of wasting time. People riding comfortably as passengers on public transport can use that time to do other things – read, use their cell phones and so on.  With enough data about trip making on different routes and modes, it is possible to extrapolate what the new route/mode will be worth to its users in terms of time savings or greater comfort and convenience. It’s not hard, for instance, to compare High Speed Trains to airlines for city pairs and come up with a general rule that shows the threshold at which one will be preferred over the other. RP is only reliable for as long as the values assigned to the parameters do not change between the time the data was collected and the new project opens.

SP uses consumer surveys to get people to consider alternatives and tell the surveyor which one they prefer. It is widely used for all kinds of decision making – the appeal of new products and services, or even political preferences. And again it can get quite sophisticated in getting people to make comparisons and choices which are largely conjectures based on synthetic alternatives. And has a varied track record in accuracy of forecasting what choices get made in the real situations.  In a region where there were no road tolls, it is quite surprising to me that the reported response to tolls for a bridge in Ohio were so negative. When people who used the free Albion Ferry were asked if they would be willing to pay a toll for a bridge, they said yes. And given the multiple sailing waits experienced at peak periods, the value they put on their time could also be measured in terms of the length of the trips they would otherwise have to make – crossing the old, congested Port Mann or the much more remote Mission Bridge. In any SP survey, people want to impress the surveyor with their rationality and decision making ability. In good ones, this well known issue is taken into account.

The traffic forecasts for the new Golden Ears Bridge were wildly optimistic. Traffic has so far failed to meet the expectations of the bridge builder/operator. A similar mistake was made with the Port Mann. And this being BC where we design P3 projects to shift money from the pockets of the public to private sector companies, we now pay through taxes for these errors. The bridge builder/operator faces no revenue risk.

In the case of the Port Mann there was already a good reason to doubt the traffic forecast. There was no bus service over the old bridge. It would have been easy to provide one, that would avoid the congestion of the bridge approaches by using bus lanes on the shoulders of the freeway. The 555 could have been running years ago – but that was avoided as it would have reduced the perceived “need” for freeway widening. And actually much potential new transit traffic could also have been won by running a direct bus between Surrey and Coquitlam instead of relying on an inconvenient, out of the way combination of existing SkyTrain and bus routes.

There has been a secular change in perceptions of the value of time and willingness to pay tolls that has not been taken into account by the forecasters. And that is that real personal incomes have been stagnant or declining for a long period of time. Moreover, the expectation that things will get better in the future – which seemed common for most of the post war period – has evaporated. Tax cuts have benefitted the wealthy disproportionately, since they have been replaced by all sorts of fees and charges which are levelled instead: they are applied with little or no consideration of ability to pay. The toll across the Port Mann Bridge is the same for the office cleaner and the CEO.

The other thing that has to be noted is the reliability of the data that is being collected. I have observed many times how this region collects far less travel data in terms of sample size than other cities: and this is orders of magnitude difference. But some of the most reliable data on trip making came from the census – at least for the journey to work mode choice over a very long time scale.

And then there is this

“The workplace has been overwhelmed by a mad, Kafkaesque infrastructure of assessments, monitoring, measuring, surveillance and audits, centrally directed and rigidly planned, whose purpose is to reward the winners and punish the losers. It destroys autonomy, enterprise, innovation and loyalty, and breeds frustration, envy and fear. Through a magnificent paradox, it has led to the revival of a grand old Soviet tradition known in Russian as tufta. It means falsification of statistics to meet the diktats of unaccountable power.”

http://www.theguardian.com/commentisfree/2014/aug/05/neoliberalism-mental-health-rich-poverty-economy

 

 

 

Written by Stephen Rees

August 6, 2014 at 9:39 am