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Krugman on some externalities of sprawl

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  • erik_rauch
    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
    Message 1 of 1 , Mar 2, 2002
      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.

      -Erik Rauch

      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.
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