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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

Making the wrong choices

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“No matter what they say, no country is going to take actions that are going to deliberately destroy jobs and growth in their country.”

Stephen Harper (source: CBC)

This post is inspired by an email from David Suzuki “Here’s to a radical Canada Day!”

Stephen Harper’s statement is willfully misleading.

Many countries are taking actions to tackle climate change. The record to date is that they are performing better in terms of jobs and growth than the very few (like Canada and Australia) who have decided to destroy the environment on which all life depends. Countries like Germany, that have far less sunshine than we do but make half of their electricity from it now. Solar power is now cheaper than electricity made from fossil fuels.

The tar sands have long presented a possible source of energy, but for a very long time they remained untapped simply because there were so many other sources which were easier to extract. Usable fuel from tar sands was simply too expensive to make. What changed that was the willingness of the Canadian government to pour billions of tax dollars into its extraction and processing. The subsidies to the fossil fuel industries are unconscionable. If these were cut – in the same way that so many other public expenditures that Canadians actually need and care about have been cut – then other sources would have been much more competitive much sooner. We have been burning money mining a nonrenewable resource that is causing widespread carnage in terms of its impact on local water and air quality as well the long term effect of increasing carbon and methane emissions at a time when all sorts of tipping points in climate change were passing. The only reaction to the melting of the polar ice cap seems to be a willingness to immediately seize this as an opportunity to open up yet more oil and gas exploration.

Canada has huge untapped reserves of energy – sunlight, wind, waves, tides, geothermal – which are not going to be utilized in time to save life as we know it, because our governments are obsessed with oil and gas. Yet we get very little from oil and gas in terms of jobs, or revenues or even economic activity. Unless you are the sort of economist who seriously advances the notion that cleaning up oil spills is good for economic growth.

Norway continues to  extract oil from underneath the North Sea. This was also regarded as a very expensive, risky option at one time. Yet Norway did not respond with tax breaks and subsidies. On the contrary it has some of the highest royalty revenue stream per barrel of any oil economy. And the money did not go to income tax reductions for the rich but into a wealth building fund  that will continue to serve the best interests of Norwegians in general long after their oil reserves are exhausted. BC, of course, is currently pursuing a highly risky fracking and LNG export path based on reducing royalty payments that are already low.

The other day I was in Squamish. I once again heard that the name comes from the First Nations term for “place of the winds”. It is apparently a world class sailboarding destination due to the strength and reliability of the winds. I could just about hear what the guide was saying over the roar of the diesel generator. He was telling us about how the new Sea to Sky Gondola is taking care of the environment.

Of course, wind and solar are not “reliable” in the sense that power is not available all the time. But this energy storage problem is close to being resolved. There always has been the option of pumped hydraulic storage (used in North Wales to store otherwise useless electricity produced by a nuclear power station which cannot be shut off at times of low demand). Now there are promising new battery storage technologies like vanadium and sulphuric acid, readily scalable and with very long life, and ideal for solar and wind power storage.

We sit on huge reserves of geothermal energy – but the only use we make of them is for a few hot baths, here and there.

We could have already replaced thousands of gasoline powered passenger trips by existing electric transport technologies – trams, trolleybuses, trains – but we chose instead to invest in highways, despite evidence of declining car use! There are many more potential jobs operating public transport than there are in freeway maintenance!

When I first got into greenhouse gas action plans, I decided that we should not be concerned about climate change as a selling point. There was already a cognitive dissonance in the message: the planet is heating up, so you should check your tire pressures more often. We simply concentrated on the economic/financial message. Twenty years ago, when hydro was still cheap and even gas prices looked reasonable, basic energy efficiency measures were still attractive with two to three years payback on projects which had potentially much longer lives. I still adhere to the notion that it is utterly pointless to argue with climate change deniers. But even they cannot argue that something isn’t happening that is – increasing wildfires, floods, tornadoes – and that remediation and essential protection for the future is costing us a fortune. The basic cost benefit calculations can be assessed in real dollars – without getting into any arguments about the value of life or time. The economy and job effect of energy efficiency by itself is worth having. Switching to renewable energy is even better in terms of rate of return on capital employed.

The carbon tax is working. It would have worked even better if it had not been frittered away on being “revenue neutral” but invested in sensible activities like increasing transit supply where there is already excess demand. Better still if the amounts had continued to increase and not been foolishly frozen.

Canada’s Economic Action Plan, on the other hand, manifestly is NOT working. Throwing money at billionaires is a very silly idea indeed. It does not trickle down nor are they any more willing to pay low taxes than they were to pay high taxes. Employing people to chase fugitive income and capital gains is a lot more productive than attacking the poor for trivial sums.

The actions we need to take will not destroy jobs or growth. What they will do is heavily impact the fortunes of the fossil fuel companies and those who remain invested in them. Stephen Harper does not actually care very much about Canada, or Canadian values. He does care very much indeed about holding on to power. And to do that he needs a steady flow of cash from the oil companies. And he is very unlikely indeed to insist that they leave their reserves in the ground. But if we are to stay below the 2℃ target that is what has to happen. The costs of missing that target are horrendous, no matter how you count them.

Footnotes

In a comment below I am (quite properly) chided for the lack of data in this opinion piece. Here are some routes where those who are curious can follow up on my assertions

http://www.desmog.ca/2013/05/10/just-how-much-exactly-are-you-paying-subsidize-fossil-fuels – points to an IMF study

Tackling Climate Change while growing the economy http://www.oecd.org/environment/cc/44287948.pdf

http://www.europeanceo.com/business-and-management/2014/06/germany-breaks-solar-power-records/ – “Over 50 percent of the country’s energy was generated from photovoltaic panels” for a short period recently

But the there is also this: http://inhabitat.com/german-state-to-reach-100-renewable-power-this-year/

investments in renewable energy and energy efficiency would create more jobs than the same amount of investment in fossil fuels. source: http://bluegreencanada.ca/node/175

https://www.policyalternatives.ca/publications/reports/petro-path-not-taken – compares Norway to Canada and Alberta

See also http://www.progressivepress.net/us-fiscal-debate-could-learn-from-norway/

http://nextbigfuture.com/2014/06/vanadium-redox-batteries-could-balance.html

http://thetyee.ca/Opinion/2014/03/12/BCs-Carbon-Tax-Shift/

Written by Stephen Rees

June 27, 2014 at 10:04 am

The Natural Gas System is Leaky and in Need of a Fix

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The first thorough comparison of evidence for natural gas system leaks confirms that organizations including the Environmental Protection Agency (EPA) have underestimated U.S. methane emissions generally, as well as those from the natural gas industry specifically.

That’s a really neat summary of a new study from Stanford. The mainstream media is reporting this – often behind paywalls – so the link I have posted is to the original not them. It also seems that they have decided the story is to be about buses. That’s in the report but a ways down

the analysis finds that powering trucks and buses with natural gas instead of diesel fuel probably makes the globe warmer, because diesel engines are relatively clean. For natural gas to beat diesel, the gas industry would have to be less leaky than the EPA’s current estimate, which the new analysis also finds quite improbable.

“Fueling trucks and buses with natural gas may help local air quality and reduce oil imports, but it is not likely to reduce greenhouse gas emissions. Even running passenger cars on natural gas instead of gasoline is probably on the borderline in terms of climate,” Brandt said.

At first this was the item that made me think I should blog about it. I have long been critical of the way that in BC we have glommed onto to NG as an alternative transportation fuel and have so often found it wanting. I won’t repeat that here.

What struck me was much closer to the top of the story

Natural gas consists predominantly of methane. Even small leaks from the natural gas system are important because methane is a potent greenhouse gas – about 30 times more potent than carbon dioxide. A study, “Methane Leakage from North American Natural Gas Systems,” published in the Feb. 14 issue of the journal Science, synthesizes diverse findings from more than 200 studies ranging in scope from local gas processing plants to total emissions from the United States and Canada. [emphasis added]

“People who go out and actually measure methane pretty consistently find more emissions than we expect,” said the lead author of the new analysis, Adam Brandt, an assistant professor of energy resources engineering at Stanford University. “Atmospheric tests covering the entire country indicate emissions around 50 percent more than EPA estimates,” said Brandt. “And that’s a moderate estimate.”

So instead of me ranting about buses I am going after the more significant target. Our Premier’s obsession with LNG, and how this is going to be both our fiscal salvation – and will help other countries wean themselves off dirtier fuels like coal.

The problem with natural gas – methane – is that is far more powerful as a greenhouse gas than CO2. As noted above “30 times more potent than carbon dioxide” which means while burning methane is cleaner than burning coal, if just small amounts leak unburned then the advantage in terms of impact on climate is negated. Since the leaks have been underestimated up to now, that means we now need to rethink some of our strategies. I think it is very common for the people who promote fracking to downplay the destructiveness and carelessness of their activities. So the phrase “some recent studies showing very high methane emissions in regions with considerable natural gas infrastructure” is striking even though in context it is stressed that these levels are not characteristic of the continent as whole. The frackers keep secret the chemicals they add into the water – and deny that these chemicals damage the water supply of people downstream. Rather like the way the tarsand developers prefer us to not pay attention to what happens to the water supply people who live near the operations depend on.

Even though the gas system is almost certainly leakier than previously thought, generating electricity by burning gas rather than coal still reduces the total greenhouse effect over 100 years, the new analysis shows. Not only does burning coal release an enormous amount of carbon dioxide, mining it releases methane.

But I do not think that justifies a strategy that throws LNG in as the be-all and end-all. Recent developments in solar power, for instance, are showing that the competitiveness of this source of electricity has been greatly improved. BC has all sorts of renewable energy sources that remain virtually untouched. Geothermal energy, for instance, seems to be mostly confined to a few spas and hot tubs. Wind and wave energy generally is ignored, despite our location on the shore of the Pacific.

There are also very real doubts about the viability of some of the proposals being floated for LNG plants, which seem to me to based more on wishful thinking than clear headed analysis of the realities of a market place that has recently seen a flood of new production for a product that is difficult to package and transport to market. It is still the case that what I was taught in that CAPP course all new employees of the Ministry of Energy were required to attend, that what comes out of the ground is either oily gas or gassy oil. And what the market demands here is usually liquid fuel, and the gas is flared. About half of the volume produced I’m told. Using lots of energy to liquify the gas and then ship it around the planet to be sold at competitive prices to places that can pipe gas in from much closer locations does not seem very likely to be viable.

But mostly I am very tired of this administration pretending to care about the climate (because we had the carbon tax implemented before other places) while doing their very best to undermine the limited success we have had in reducing our own ghg. Which may not be entirely due to good management but simply reduced levels of economic activity.

An Evening with Robert Reich

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This SFU Public Square event was part of their 2013 Community Summit “Charting BC’s Economic Future”. It was live web cast . I would hope that it will be available as a recording on line but I can not find any commitment to that. I am linking to the Public Square site in the hopes that you will be able to find your way to it eventually but I will come back and check.

The Orpheum Theatre was pretty well filled, and according to the organizers it became a trending event on twitter the evening. I have made a storify using the hashtag #sfups. His theme was inequality and is tied in to his new movie which is not yet available here. But there is, of course, a web site.

UPDATE Very much to my surprise the entire text of his speech is now on the Georgia Straight.

He is a very engaging and entertaining speaker. The format chosen was that there were lots of introductions and plugging of sponsors, a short address and then a very easy interview with Anna Maria Tremonti lobbing very soft questions and even some pre-recorded questions from a carefully chosen and quite unrepresentative sample of people. But all good stuff and well worth your time, once the webcast is available.

What really surprised me was the number of people who left before the end of the event. I do hope that those people did not get the free bar of chocolate.

RR Chocolate Bar

Written by Stephen Rees

October 3, 2013 at 9:58 pm

Posted in Economics

Tagged with ,

That new bridge

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I apologize for driving you to a paywalled article. Francis Bula is reporting on what Geoff Freer (executive project director for the Massey project) says about replacing the tunnel and why transit won’t meet that “need”

60 per cent of the commuters are travelling to Richmond or Surrey, the U.S. border or the ferries – so are unlikely to use transit anyway.

The chutzpah of this statement takes one’s breath away.

It is not as if the Canada Line was not already changing travel patterns in Richmond. And the introduction of useful inter-regional connections to the transit system (over many years since it was entirely focussed on downtown Vancouver) with direct service to Metrotown and Newton shows that when the transit system actually looks at how people are moving, as opposed to used to move, even ordinary bus services can be successful. When I first arrived in Richmond and had to commute to Gateway in Surrey I initially tried the #410. Then it was infrequent, with a huge one way loop through Richmond wand was always very lightly loaded. Over the years it has become one of the busiest bus services in Richmond and the only one in the Frequent Transit Network.

The other huge change was when Translink backed off the long held belief  that it ought not to compete with Pacific Stage Lines and run a direct bus between the ferry at Tsawwassen and downtown Vancouver. The new service they introduced initially required a transfer to the B-Line at Airport Station, and now requires a transfer to the Canada Line at Bridgeport. It coincided with increased vehicle fares on the ferry so that walk-on traffic grew exponentially. (BC Transit had long met ferries with an express bus from Swartz Bay to downtown Victoria). The #620 now requires articulated buses and frequent relief vehicles. Just like the express bus to Horseshoe Bay.

Artic unloads at Bridgeport

As for cross border services, it would be easy to set up a “walk across the line service” at Peace Arch, with connections to Bellingham. There are just much more pressing priorities – mostly getting students to post secondary institutions thanks to UPass. But bus service across the line has seen significant commercial traffic with both Bolt bus and Quick Shuttle in head to head competition. Some of the casinos down there run their own shuttles too. The best thing that has happened so far on this route has been the introduction of a morning Amtrak train departure for Seattle.

What is actually needed is transportation planning that looks at the future pattern of development in the region, and integrates land use planning to meet population growth and travel needs. Strangely the desire of Port Authority for deeper draft for vessels in the Fraser River is not the first and foremost consideration. Port expansion is not a driver of economic growth. It is path towards calamity, since it is driven by the desires of a few very rich people to export yet more fossil fuel at a time when anyone with any sense recognizes that we as a species have no choice but to leave the carbon in the ground.

I think that one of the great benefits of rail transit development would be protection of the last bits of highly productive agricultural land left after the ruinous performance of the BC Liberals to date. People riding on trains get fast frequent service through areas which see no development at all, because it is concentrated around the stations. What part of Transit Oriented Development do you NOT understand, Mr Freer? Expand the freeway and sprawl follows almost inevitably.

Trains like this one serve the region beyond the Ile de France, and provide fast direct services for longer distances. The much faster TGV serves the intercity market.

It is perhaps a bit hard for people here to understand the idea of fast frequent electric trains that are not subways or SkyTrain, but they are a feature of most large city regions – even in America. As we saw in yesterday’s post even LA is bringing back the interurban. West Coast Express is not a good model as it only serves commuting to downtown on weekdays. All day every day bi-drectional service demands dedicated track – or at least the ability to confine freight movements to the hours when most people are asleep.

New Jersey Transit provides statewide services to the suburbs and exurbs of the New York region

Transit to Delta and South Surrey has to be express bus for now, just because there is so much catch up in the rest of the region. But in the longer term, really good, fast, longer distance electric trains – which can actually climb quite steep grades equivalent to roads over bridges – must be part of planning how this region grows. It requires a bit better understanding of the regional economy than just assuming that somehow coal and LNG exports will secure our future, when they obviously do no such thing.

We’re not the only ones

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The Guardian reports this morning “Glaswegians revolt over ticket changes for ‘Clockwork orange’ subway system”. Like the Translink issue, the problem is that the new stored value “smart card” (in Glasgow called “Bramble”, in Vancouver called “Compass”  and in the Guardian compared to London’s “Oyster”) is being introduced at the same time as a significant fare increase.

some passengers have been angered by the withdrawal of 10 and 20 journey tickets, which took place in June, arguing that the new system will leave them paying considerably more for their journeys.

This is precisely the same issue we have with Compass.  It really surprised me that the (paywalled thus not linked) Sun actually produced a pro-Translink editorial on the subject. Indeed, I think this must be a first for that organ. It reads like a Translink press release, except that is criticizes those who use other media to voice their opinions. Because they differ from the official line, and the Sun, and, of course, in some respects with each other, they must be wrong.

The Guardian concentrates on the withdrawal of fare discounts. There is not quite the huge penalty for cash use for some kinds of trips as here – but there are definitely incentives to use the smart card. The problem is that these incentives are not nearly as good as earlier incentives to use transit more frequently. Paying up front for a bunch of tickets helps the organization’s cash flow. Not everyone makes two trips every weekday, so passes are not a universal answer. Monthly discounts work well for commuters, not so well for people who have a more varied trip pattern. The point about Oyster was that did not matter as the system would ensure users got the best deal going no matter how many trips they made. The policy in London at the time of its introduction was to encourage people to use the transit system.

Translink made two fundamental errors. The first was to use the introduction of Compass to raise fares in general. At the same time it has been forced to cut service in many places, to meet overcrowding elsewhere. It has not been able to do enough for the most crowded routes and at the same time it has caused considerable inconvenience to users who were already putting up with slow and infrequent services. The second was to ignore the lack of provision in the new system to open gates with existing magnetic media during the changeover period, which was going to have to be years not months due to the need to replace bus fareboxes that could not issue Compass tickets for cash. Due to the omission of this facility in the specification of the system, and the lack of funds to replace not yet life expired bus fareboxes, one type of “seamless” journey (cash on the bus transfer to SkyTrain and SeaBus) would not be possible. It is possible to buy magnetic readers for fare gates – or for ticket vending machines. It may have seemed expensive at the time, but in the context of a hugely expensive and uneconomic (it cannot ever pay for itself) crackdown on fare evasion, balking at the last few million having lashed out $170m of public funds seems obtuse. And by the way, Compass itself will allow for new kinds of fare evasion.

I frankly doubt that the idea of making people pay twice for one direction of travel really was thought of as a good incentive to switch to Compass. It sounds to me like people covering their rear ends after discovering an omission. And – to correct the false information in the Sun’s editorial – it was not “leaked”.  The bus operators were concerned that the passengers who found out about the need to pay twice would take it out on them. The operator is, after all, the most visible and vulnerable face of the organization. I have always preferred the cock-up theory of history to the conspiracy theory. That does not mean there is not evil in the world, just that bad things happen more often due to mistakes than deliberate malevolence. For reasons that we need not discuss here, Translink has long been incapable of admitting error. Yet it is run by people and therefore mistakes are inevitable.

The most egregious error now is that the view that Translink is using fare policy to deter ridership is gaining credence. The transit police in particular have taken to tweeting (and other communications) in ways which have convinced many that bus transfers will not be accepted anywhere on the system.

It is too late now to roll back the fare increases slid through as part of the Compass system. It cannot now be made to look like something that every transit user will welcome. It is not about being convenient. It is simply a worse deal than transit users now get. And Translink should admit that. The discount for ten rides is not nearly as good as with ten tickets. Don’t pretend that we should be happy with that. Translink could move back the day when the gates close until something can be done for those with bus transfers. Or operators could simply inform cash payers that they will have to pay at the station (not on the bus) to get the gate to open. After all, unless a fare boundary has been crossed, there is no revenue loss. Compromise is a solution that dissatisfies all equally. Translink  cannot now expect to win everything it wants. The ease of transfer is essential. We always have had an integrated fare system and retaining that ought to have been a prime objective in adopting any new system.

This is not to damn Translink and all its activities. This is not part of a “hate on” against this or any institution. This is pointing out that a mistake has been made and must be corrected. Pretending otherwise is simply not good enough.

Written by Stephen Rees

August 26, 2013 at 9:05 am

Free Coffee at Translink

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For reasons that seems fairly silly to me, there has been a lot of attention paid in the last few days to the “news” that Translink staff get free coffee at the office. As it happens, I know why that is, as I was personally acquainted with the person who made that decision. And it was based on purely financial concerns. There was previously the usual arrangement of staff collecting money from their colleagues and buying the necessary supplies. There was a significant amount of time spent, during working hours, administering this system and collecting the money in cash. The calculation was quite simple. If the employer took over the administration of the coffee supply, then the time saved more than compensated for the cost of the coffee. By having a contractor deliver the supplies, and having one for all the offices, there was also real saving in the cost of those supplies compared to retail prices: but it was the staff time saved that clinched the argument.

Written by Stephen Rees

April 24, 2013 at 3:35 pm

Posted in Economics

Tagged with ,

BC’s Regressive Tax Shift

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This post is not about a new report. In fact the data comes from something published in June 2011. It was drawn to my attention by a Green Party of BC tweet. So it is timely in the sense that the BC Liberal government is using your money to buy air time for adverts that tell you how well off you are thanks to their taxation policies. And what they say is a Lie. Since the BC Liberals came to power what had been a slightly progressive taxation system has become regressive. Poor people in BC pay more tax than rich people.

The Report is subtitled “A Decade of Diminishing Tax Fairness, 2000 to 2010” and is available as pdf from The Canadian Centre for Policy Alternatives. It was written by Marc Lee, Iglika Ivanova and Seth Klein.

This report examines changes to the provincial tax system over the last decade.
We look at the total provincial tax rate for households at different income levels
(the actual tax bill as a share of household income for all personal provincial taxes
combined—income, sales, carbon and property taxes, and MSP premiums).

We find that together these changes have created a tax system where the rich now
pay a lower total provincial tax rate than the rest of us.
• In 2000, most BC households paid about the same total tax rate, with
households in the top 10% and top 1% paying a little more.
• By 2010, however, the tax system had become regressive, with the richest
20% of households paying a lower total tax rate than the rest of us.

This regressive tax shift was driven by the following:
• Large income tax cuts primarily benefited upper-income earners, both in
dollar terms and as a share of income.
• Combined, tax cuts delivered an average of over $9,200 per year to the
richest 10% of BC households, and more than $41,000 to the top 1%. In
contrast, lower income households received an average tax cut of $200 per
year, and those in middle got just over $1,200.

• Between 2000 and 2010, the share of provincial government revenues coming from personal income taxes dropped by nearly one third.
• The province now collects more revenues from sales taxes (28% of revenues) than from personal income taxes (27% of revenues).
• BC families now contribute more in MSP premiums than businesses contribute in corporate income taxes.

Screen Shot 2013-01-16 at 2.06.13 PMScreen Shot 2013-01-16 at 2.08.35 PM

This morning the Premier held a press conference where she defended the government ads as means of building consumer confidence in the economy against BC NDP cynicism (according to Ian A Bailey of the Globe and Mail).

I know that I have been accused of cynicism more than once, but in the face of the current pre-election propaganda assault – which we are paying for – I cannot think of a more appropriate response. Except mine is not NDP cynicism.

MSP premiums went up again this month. At one time those were paid by the BC Government to those of us who drew Public Service (and teachers’) Pensions. No longer. We also have to pay for the Blue Cross premiums: the so called “Fair Pharmacare” programme does not actually pay out anything at all for the four figure annual prescription cost I have to pick up  that neither Blue Cross nor the public sector covers. The same government of course sent me a letter reassuring me that the value of my pension had not been reduced. They were just not letting me keep as much of it but were clawing it back through fees. And the sort legal gymnastics that the healthcare insurance industry has perfected in the US to avoid paying out much of the claims made against policies they write.

So no I do not have more disposable income, which as far as I know is about the only thing that “promotes consumer confidence”. I suppose she means that it is necessary to get more consumer spending going to increase the size of the economy . But the only way that can now happen, given the most of us now have less in our pockets, is that we borrow more to boost our consumption. I cannot see that has helped to build a sustainable economy – and was a contributing factor to the 2008 crash. It also seems to me that the increased reliance on sales taxes must have had some influence on the growth of cross-border shopping which has been so helpful to Whatcom County.

On the whole the idea that the BC Liberals are a party that can be trusted to run the economy properly does not seem to have been borne out by experience. Yet they will still have a very significant number of people who will vote for them. Hopefully, not enough to get them re-elected.

 

Written by Stephen Rees

January 16, 2013 at 2:33 pm

Posted in Economics, politics

Tagged with ,

Can We Count On Toll Revenue Forecasts?

with 4 comments

Clark Williams Derry on Sightline Daily (a really useful resource that I recommend you subscribe to if you don’t already)  has a very useful series on declining traffic. No 37 in that series picks up a story from the Orange County Register which he headlines “Southern California toll road debacle raises questions for the Northwest”.

The reason for this contribution to the discussion is that he apparently thinks that the states of Washington and Oregon are all that makes up the North West – and we in BC actually have a slightly different reason for caring. So read what he says first and then come back, because while what he says is all well and good for them, our very peculiar P3 system  – and the even weirder Port Mann set up – makes this a much more immediate concern. We have an election this spring and here is further reason to change our provincial government, if we didn’t have reason enough already.

Here’s the pictures

San-Joaquin-275x275 Foothills-275x262

The conclusion drawn from this data

The toll route is generally free-flowing, but drivers prefer parallel, toll-free alternatives, even if they’re clogged with traffic.

That is very important  but entirely consistent with what we have seen on the Golden Ears Bridge.

The traffic forecasts for the Southern California roads were made by the same consulting firm—CDM Smith, formerly Wilbur Smith—that performed the investment-grade bond study for Washington’s SR-520. And that firm was recently contracted for similar study on the Columbia River Crossing connecting Portland, OR with Vancouver, WA. CDM Smith has a good reputation—but that didn’t protect them from producing projections that went badly awry.

Now this is where we part company with “The North West”. Our projections are done by a different company, but while I have not looked in detail how either forecast was done it does not matter. As Jeff Tumlin pointed out, four step transportation models are no better than tarot cards at forecasting anyway. Or, as Clive Rock who looked after traffic forecasting at the GVRD and Translink liked to say, “You can’t steer the ship by staring at the wake”. They do this with personal finance too – past performance is no guarantee of future performance – is the caveat entered in every prospectus. But that is way all traffic forecasts are still done.

We do not fund transportation expansion by raising bonds the way they do in the States. Equally, we do not transfer risk to the private sector the way they have done in Australia. This got them some very large bits of infrastructure for free when the contractor operators (DBMO = design build maintain operate) went bust. The people who owned the companies’ shares and debts caught a cold, but the public sector was not on the hook. Here, if a DBMO gets the forecasts wrong, the risk is transferred to the tax payers. So we are now picking up the lost revenue on the Golden Ears. As we will on the Port Mann – which is no longer a P3 as no-one was daft enough to want to lend that turkey money, and the government was forced to admit that public sector borrowing was cheaper than private sector borrowing. As it always is, when the taxpayers can be expected to back the debt.

So we can now add the Port Mann “widest bridge in the world” to the long list of public sector projects that were supposedly safe in BC Liberal hands but have proved to be financially disastrous. BC Hydro was doing very well – until it had to subsidize run of the river private sector projects. BC Rail actually had been making money but was sold to CN (the “lease” idea is simply spin) for much less than it was worth. BC Ferries thought they could raise fares without worrying too much about price elasticity. PAVCO had to replace the roof – and never thought it needed a business case – which was just as well as there is no business model where that kind of investment makes any sense financially. Even well run stadia are subsidized – usually on the argument that it brings free spending punters to the area. Even casino operators now recognize that this mostly just cannibalizes other enterprises. The tv adverts currently running which talk about the economic models of unspecified other places assert that somehow BC has a different model. Actually, this is just another lie. Public sector spending and the running up of the debt of the public sector has been out of control CORRECTION A reference here to the Auditor General has been removed due to this tweet from the CBC “Christy Clark asks AG John Doyle to stay on 2 more years”

Please understand that I have no problem at all with using the public sector to stimulate the economy when that is required. Trying to balance the budget was what caused the Great Depression of the 1930s – and all of FDRs programs only mitigated that slightly. It was only the huge public spending of the second world war that got America working again. It was only the Marshall Program that resurrected Europe – and the reason the UK fell so far behind was that it was not covered by that plan and had to pay back all the dollars it had borrowed before trying to start repairing the damage. BUT that does not mean I support public sector spending on any and all projects. Indeed, as an economist working in or for the public sector for all of my career, reviewing forecasts and critically examining “business cases” (then called cost benefit analysis, which looked a bit further than just profits for banks) project selection was always the most important task to get right. What project – and where – and how its done, were all looked at carefully and objectively. Only when I came to BC did I come upon a system which said, in effect, the current political party has a bee in its bonnet about some idea or other, and your job is to make this idea look good. Actually that is not fair . As a consultant, I found that it was also the practice of at least two banana republics and one religious hegemony. Just substitute that words “current political party” with whatever they called their leaders at the time.

But what we have now – and what the US has had and to some extent still does – is a right wing party that says it will balance the budget, control spending and reduce the debt, but actually does exactly the opposite. And does that not because stimulating the economy and providing growth will make the population as a whole better off (“the rising tide floats all boats”) but simply to funnel ever larger sums from the public coffers to their friends and supporters – mostly corporations who owe no loyalty to any jurisdiction they operate in.

No we cannot count on toll revenue forecasts, but the corporations can indeed count on tax revenues collected for them by a compliant government.

Written by Stephen Rees

January 15, 2013 at 9:53 am

Sex, Neuroscience and Walkable Urbanism

with 6 comments

Jeffrey Tumlin at SFU City Program

Eight simple, free transport solutions for healthier, wealthier cities

This talk was made possible financially by a contribution from Translink. The blog post was updated on February 15 to include two videos, one of the talk and one of the Q&A session.

It is worth stating out the outset that Tumlin sees Vancouver as the future for the rest of North America. The talk he gave was clearly one designed for the average American city. He stated that he felt he was “visiting the future” by what has been done in the City of Vancouver. The problem for most places is that they bought into the lie that having a car will bring you more and better sex. “Where have you been told lies?” And, how can we use their methods against them.

The first series of slides illustrated the startling growth of obesity by state in the last thirty years. The Centers for Disease Control have data that shows how this problem has grown

The animated map below shows the history of United States obesity prevalence from 1985 through 2010. Unfortunately the way WordPress has imported this graphic has lost the animation but it is well worth following the link above to see the trend.

map26

Americans are no longer able to have a significant amount of walking in the daily lives. This is due to civic policies – the rules, metrics and performance standards – that make it illegal to build anything but auto oriented suburbs.The statistics for traffic fatalities per 100,000 residents show that sprawl = death.

“Road rage is a clinical condition”. When you observe a crowded sidewalk you notice that pedestrians do not run into each other. We learned a large number of essential social signals in order to hunt in packs. In cars these social signals are blocked and the brain chemistry shuts down social behaviour, because instead of co-operating the way pedestrians do, the fight or flight instincts have been triggered [by andrenaline]. Traffic is literally driving us crazy and leading to permanent changes in the brain. We are less able to think, to predict the consequences of aggression and therefore become more antisocial. Tea Party membership is positively correlated to the absence of sidewalks.

Policy ought to recognize the limitations of humanity and what makes us happy. That translates in urbanity to the sidewalk suburbs of two to three story buildings. The suburbs we built in the 1920s and ’30s were leafy, walkable and auto optional. We have to increase the number of walkers and cyclists, not just build things for the “hard core lifer crowd”. See D Appleyard “Liveable Streets” [the link goes to Amazon, but this book is very expensive – look in your local library first].

The speed and volume of traffic on residential streets determines who you know and how well you know them. If the traffic is fast and heavy, there will be far fewer people who you are likely to give your keys to, for use in emergencies. Social cohesion and participation in democracy increases when residential streets have less and slower traffic, making it safe and easy to cross the street.

There is a direct casual relationship between mental health and outdoor exercise. Oxytocin “the cuddle chemical” that is released during breast feeding and orgasm is also released by human eye contact and outdoor exercise. It is different to dopamine, endorphins and morphines as it lasts longer.

So now we have has established that driving makes us  fat and angry, while walking and cycling makes us happy and sociable, what can we do?

1 Measure What Matters

We need to “measure transportation success in a less stupid way.” Transportation is not an end in itself but allows other things to happen – and it is those activities that we need to facilitate – the benefits come from accessibility not mobility. Movement of itself doesn’t serve a purpose. Instead of measuring Level of Service on  shopping streets we should look at retail sales per square foot. We are obsessed by congestion, which means currently we aim to reduce vehicle delay when what we should be looking at is quality of service. A busy shopping street (he cited Market St in San Francisco but Robson Street would be our best case) looks “bad” from the point of view of the traffic engineer (LoS F) but successful to the economist – lots of people spending money.

Make walking a pleasure for all types of people at all times of day.

2 Make traffic analysis smart

[Four step transportation] “Models are no better than tarot cards at predicting the future.” Traffic forecasting is much better seen as a branch of economics than of engineering. What we see all around us are the unintended consequences of model based planning. Making it easier to drive makes it difficult to do anything else. The “solutions” (more road) create the problem they predicted.

We should fix the four step model as it fails to incorporate  induced and latent demand. We also need to better understand how land use affects travel – not simply import data from observations of trip generation made in Florida in the 1970s.

Fortunately, only small changes in traffic demand are need to release it from congestion. You will frequently hear people saying “You can’t expect everyone to take transit”   but you do not need to. All you need to do is persuade 10% to change mode – and you can persuade 10% of the people to do anything!

3 The best transportation plan is a good land use plan.

4 Adopt the right street design manual

Much of current traffic engineering practice comes from rural highways. Wider roads, better sight lines wider turns accommodate driver error – but this only improves safety in rural areas. In urban areas instead of speeding traffic, drivers must be made to slow down and pay attention. Do not give them a false sense of security. And there is now plenty of data that shows what people predict (“you’re gonna kill people”) doesn’t happen. see nacto.org

5 Plant trees

But note that the costs cannot accrue to the traffic department but the property owners along the street if the trees are to be cared for properly

6 Price it right

Congestion pricing in Stockholm

“Poor people place a high value on their time”. The price elasticity of demand means that it is actually very easy to get enough [vehicle] trips off the road to produce free flow. The right price is always the lowest price that equates demand with supply.

7 Manage parking

Read Donald Shoup “The High Cost of Free Parking” (free pdf).

In urban centres, 30% of the traffic is looking for a parking spot.

The price for parking has to vary by location and time of day – popular places at peak times must cost more. The target price is that which produces enough free spaces to reduce driving. The reason for charging for parking is not to raise money. Invest the parking revenues in making the place better – give it to the Downtown Improvement Association!

Unbundle and share parking, and separate the cost of parking from the cost of other things. Don’t force people to buy more parking than they need and create “park once districts” – rearrange the land use to facilitate walking. So for a series of trips drivers can pay, park and leave the car but visit several different types of activity (work, school, play, shopping).

8 Create a better vision of the future

We are still trying to live in the future that GM displayed in Futurama. Disneyland is an orgy of transportation. The imagineers have yet to come up with a new vision of the city of the future. We are still stuck with the Jetsons.

The new vision has to be based on Maslow’s Hierarchy of Needs

1 Walking is a pleasure for everyone, everywhere, all the time

2 Cycling is comfortable for people of all ages – that means separated cycle facilities

3 The needs of daily life are a walk away

4 Transit is fast, frequent, reliable and – above all – dignified.

Everyone knows and loves their neighbourhood whereas the big region is impersonal. We need a sense of belonging. Food and energy are local and precious, and social networks are fostered.

“On a bus I can use my smart phone. I can’t do that while driving”

“Young people move to cities to get laid.”

Flirtation is actually more valuable than the activity it is aimed at getting. Informal lingering and eye contact is what makes this possible. We should apply the same factors that retailers do in the shops to the pubic realm. Beauty is ubiquitous. The brain is hard wired to appreciate beauty [insert slide of Brockton Point view of downtown]

He also has a [very expensive] book Sustainable Transportation Planning

Q & A

Use of malls to encourage walking by seniors in poor weather?  – fantastic

Use fruit trees in urban areas? – city concerns are fallen fruit mess and risk of slipping

Can’t we just use nostalgia instead of a powerful vision of the future? – no humans crave novelty, nostalgia is not enough

Buildings without Parking? – The cities fear that someone will park in front of someone else’s building, and impose minimum parking standards that are excessive. There is an over provision of space = huge subsidy to motordom. Abolish the minimum parking standards. Impose very low maximum parking standards but provide shared cars everywhere.

How do we address the concerns of the Fire Chief? – respectfully. Emergency response time matters but we need to focus on net public safety. There are more ways than one to cut response times, including more stations, smaller trucks, traffic signal priority, grid of streets to provide more routes to the fire. Over professionalism is a widespread issue and we all need to care more about what matters to other people

“I saw you” ads seem always to refer to transit. Can we capitalize on that?  – Leave it to the French. look at Strasbourg trams – no wraps, low windows. In the US there is a prevailing attitude that transit is the mode of last resort. Transit is like the dole – you have to be made to suffer to use it.

“Dignify transit” How do you do that on a bus? – provide a comparable level of investment as you would for rail. Very hard for financially strapped transit agencies faced with the “Sophie’s choice” between better buses or more service. There is now a program of providing basic mobility for those who have no choice. To move beyond that we have to ensure that the benefits of better transit accrue to the system provider not the adjacent land owners. Benefit capture pays for more transit [and creates a beneficent spiral]

To make bus transit more comfortable you need more transit priority measures – bus stop bump outs, bus lanes, signal priority

Zurich – all surface transit since local funding requirements meant that subway building was not feasible. Streets are narrow – treasured ancient urban fabric – so very little road space allowed for cars despite extremely wealthy population 80% of whom use transit simply because it is more convenient than the car – no hassle of parking.

Orange Line BRT in LA exceeds all ridership forecasts because there are no forced transfers. And service quality offers “basic level of dignity”.

Boulder CO has very high rates of transit use – all bus service, all low density development – very high service standards

REACTION

None of this should be of any surprise to readers of this blog. I have been saying the same things here – and for many years previously. I just have not had the fortune to be able to say it with such charm and charisma – and often with less supporting data.

For instance, when BC Transit (as it was then) was designing what became the 98 B-Line Glen Leicester (then head of planning) insisted on the forced transfer from local service (“It’s just like SkyTrain”) despite the very convincing data from the Ottawa transitway that this was the wrong thing to do. The service had to be redesigned three months after it started.

I have been banging on about Richmond’s use of private parking provision in the town centre for years. And only the “hard core lifer crowd” would think Richmond’s cycle network was adequate. The dyke is for recreation not transportation. Only No 3 Road has separation – and that is far from satisfactory.

I felt, when listening to him talk about parking, or pricing, as though I was hearing myself. The good news is that he does it so well that more people listen.

The talk was oversubscribed – and there was a wait list for seats. But even so there were plenty of empty seats when the talk started and no-one moved to the front. Please, if you reserve a seat, but realize you won’t be going, cancel your reservation so someone else can go.

ASIDE

I am now aware of some Car2Go issues – and for two of them, users can do something. Do not leave the car open but keep the key with you. Seems obvious, may just be absent mindedness, but is truly annoying. Just like the lady who takes the car2go to her gym, parks the car in a private locked underground garage (gym members have access, the public doesn’t) and ends the rental. This saves her money but makes the system show it as “available” when it isn’t. She also has her ride home guaranteed.

It was that thing about not unreserving your seat for a City Program talk that reminded me.

Don’t be thoughtless – or selfish.

And while we were waiting for the #16 on Granville St I used my smart phone to find the nearest Car2Go. By the time it had done that, the bus came. This may be more useful than real time next bus information.