Krugman has a penchant for making simple calculations that make
policymakers uncomfortable. In the early 90's he caused a stir by
showing that most of the rise in incomes in the U.S. over the past
decade went to the top 1% of earners. Here he turns his attention to
sprawl, estimating the amount that a single individual's decision to
drive costs other people just in lost time.
NATION IN A JAM
Originally published in The New York Times, 5.12.01
When asked whether Americans should make any changes in their
lifestyle to address energy problems, Ari Fleischer, the White House
spokesman, waxed eloquent: "The American way of life is a blessed
one. We have a bounty of resources in this country. What we need to
do is make certain that we're able to get those resources . . . into
the hands of consumers so they can make the choices that they want to
make as they live their lives day to day."
So now we know how they're going to play it. Over the next few months
Dick Cheney and friends will insist that their con
servation-is-for-wimps energy policy isn't about defending business
interests; it's about freedom and anyone who disagrees is an
elitist who doesn't trust Americans to make their own choices.
But you don't have to be an elitist to think that the nation has
lately been making some bad choices about energy use, and about
lifestyles more generally. Why? Because the choices we make don't
reflect the true costs of our actions.
Consider, for example, the problem of traffic congestion.
Last week's Urban Mobility Report by the Texas Transportation
Institute got a lot of well-deserved press attention. The report
showed that it's not our imagination: traffic really has gotten much
worse over the last few years. What it didn't say, but clearly
implied, was that there is a growing disconnect between private
incentives and public consequences.
When you or I decide to drive during "congested time" what we used to
call "rush hour," but which now lasts about six hours every day
we make that congestion a bit worse, and thereby impose a cost on all
the other people who are trying to get somewhere. (And they do the
same to us we are all both perpetrators and victims.) That's a
very real cost, in time and money; but it's a cost we as individuals
don't take into account.
How big is this hidden cost? I've made some rough calculations for
greater Atlanta, which has come to epitomize urban sprawl. In 1999,
the average Atlanta resident lost 53 hours to traffic delays,
compared with only 25 hours as recently as 1992. Over all, traffic
congestion cost Atlanta $2.6 billion in 1999; had delays been no
worse than in 1992, that cost would have been $1.4 billion less.
Why did Atlanta's traffic get so much worse? The main answer is that
despite billions spent on highway construction, the roads have been
clogged with ever more cars: between 1992 and 1999 vehicle
registrations rose by 550,000. Not all of those vehicles were used
during congested periods; I would guess that an extra 400,000 cars
were actually driven during peak times. Those 400,000 cars were
responsible for the extra congestion cost.
Do the arithmetic and you find that each individual's decision to
commute by car in Atlanta imposes congestion costs of $3,500 per
year, or $14 per workday, on other people. These are costs over and
above the costs actually paid by the driver himself that is,
they are costs that drivers don't take into account. And this number
does not take into account environmental impacts (air quality in
Atlanta is steadily deteriorating).
Suppose for a moment that anyone who chose to commute by car in
Atlanta actually had to pay $14 per day for the privilege. No doubt
some people would still choose to live in distant suburbs and drive
long distances and that would be their right. But as it stands,
driving in Atlanta and to a lesser degree in every other
American metropolitan area is in effect heavily subsidized,
because people don't have to pay for the costs they impose on others.
Which brings us back to the administration's energy policy.
George W. Bush, according to Mr. Fleischer, "believes that the
American people are very wise and that, given the right incentives,
they will . . . make their own right determinations about how much
they can conserve. . . ." Unctuousness aside, he has a point. Right
now, however, our system doesn't give people the right incentives. So
you might imagine that an administration seriously concerned about
the nation's future would give a high priority to getting those
incentives right to making Americans take into account the
costs their actions impose on other Americans.
Oh, never mind. Cost economic and environmental is no
object when you're defending a blessed lifestyle, especially if it
means burning more fossil fuels.