Greetings from the United States, where I’ve been helping a friend get married and generally visiting friends and family. Along the way, I got to visit Denver, where one of my two brothers now lives. Here’s a picture of all three of us hiking in a state park near the city. I’m the one in the middle:
A few weeks ago, I wrote a bit about Denver’s relatively new and expanding light rail system. The city seems to be growing and changing. It’s also seeing a fair amount of spillover from the overheated Californian real estate market. So I was interested to see what the place was about.
A couple of random impressions.
Like most other American cities, Denver is built around the car. It’s big, and there are a whole lot of big roads like this:
This is a pretty typical American suburban landscape, but there are some Colorado-specific elements to it. Due to the fact that the state legalised marijuana in 2014, marijuana dispensaries seem roughly as common as liquor stores. Here’s one tucked between a brunch place and a Mexican restaurant in a neighbourhood shopping centre – the “Lucy Sky” dispensary:
At least in the older parts of the city, Denver’s residential suburbs are about as pleasant as American suburbs get. Lots of street trees, modestly-sized, attractive standalone houses, decent sidewalks, and an extremely functional street grid system. (Once you get to the places that were developed in the last few decades, it all dissolves into cul-de-sac mush, unfortunately.)
Here’s what it looks like from the air:
And here’s what it looks like on the ground. Note the absence of driveways at the front of houses – cars are either parked on-street or in driveways off rear lanes. That’s smart:
We went to Washington Park, the big park in the map above, one afternoon. It was packed full of people playing pretty much every sport imaginable. It’s a very fit city by US standards – Colorado has the nation’s lowest obesity rate – and so it was a bit surprising that cycling wasn’t better catered for on streets. I saw a few sharrows and painted bike lanes, but no serious effort to make it safer to cycle.
That being said, the street grid creates a lot of low-traffic back streets, so it’s probably possible to cycle around without spending much time on high-traffic arterials.
Lastly, the rail system. I was kind of curious to see how this worked, so I took the train to the airport when leaving. Basically, it does seem to be working. Even though I was travelling after the peak, a reasonable amount of people seemed to be riding.
One of the weaknesses of the system, I think, is that it often runs alongside motorway corridors. Although rights-of-way can be cheaper here, the ambiance is somewhat lacking. This was where I caught the train: In a darkened cave next to a motorway trench:
However, on the inner stations, where the rail lines deviate from the motorway, it is very apparent that Denver’s light rail system has been a catalyst for redevelopment. There are midrise apartments clustered around a number of stations. I particularly liked these ones a few blocks away from Union Station, which sits off to the side of downtown:
And these, immediately around Union Station and the underground intercity bus terminal (!!!).
The transfer to the airport line was pretty straightforward, and the train passed through the city’s industrial belt and then a whole bunch of empty paddocks before arriving at the airport. Which is, incidentally, home to a terrifying statue of a demon horse that killed its own creator, along with a variety of other conspiracy theories.
There were a number of odd things in the report released several weeks ago by the New Zealand Council for Infrastructure Development (NZCID), a lobby group. Matt has already reviewed the report in detail. Perhaps the oddest part of it was this sentence:
NZCID presents this as a factual statement – or perhaps an article of faith? – but does not attempt to justify it or offer much supporting evidence.
From an economic perspective, this is an odd statement because transport infrastructure does not and can not generate economic activity. Roads are a means to an end, rather than an end in themselves. They can enable some economic activity, by allowing people to make journeys that otherwise wouldn’t have been possible, but they can’t actually generate it themselves. (Unless you think that the roads physically lift themselves up off the ground and start moving around and working in factories and stuff, in which case I recommend a psychiatric evaluation.)
Consequently, we must ask: Is there evidence that past motorway investments have raised productivity elsewhere in the economy?
Although the NZCID hasn’t cited it, there is relevant empirical research that addresses this question, including in New Zealand.
Before I get on to that, here’s some macroeconomic data. The top graph, sourced from OECD data, shows New Zealand’s investments in roads in dollar terms. Observe how it started to rise sharply after 2003 – that’s approximately when we started building more motorways.
The bottom graph shows Statistics NZ’s labour productivity index for the measured sector – a measure of changes in GDP produced per worker. Observe how there has been absolutely no change in the productivity growth trend, in spite of a threefold increase in the amount of money being spent on roads.
Correlation is not causation, but an absence of correlation is often evidence for a lack of causation.
This graph makes me doubt NZCID’s assertions about motorways and economic activity. For one thing, if building motorways truly was an economic panacea, shouldn’t tripling roads spending since 2003 be observable in the data by this point?
Fortunately, we don’t have to guess at the effects of motorway spending on economic output. Three OECD researchers, Balázs Égert, Tomasz Koźluk, and Douglas Sutherland, have taken a look at the issue. In a 2009 paper entitled “Infrastructure and growth: empirical evidence“, they examined the impact of infrastructure investment on economic growth using data for 24 OECD countries from 1960 to 2005. They looked at how investment (or disinvestment) in roads, motorways, rail, electricity generation, and telephone networks flowed through into subsequent economic growth.
Importantly, Égert et al found that the effects of infrastructure investment varied between countries – investments that had a positive impact on growth in one country can have a negative effect on growth in another. This could reflect differences in, for example, economic structure or quality of investment decisions.
Their key findings for New Zealand (from Table 1) were that:
This is, again, the exact opposite of what NZCID have asserted. Transport investment in general appears to have had a positive impact on economic growth, but motorway investment in particular was a drag on growth.
Moreover, the authors considered the possibility that the returns from further investment changed over the course of the period. This is a reasonable hypothesis – after all, in 1960 many OECD countries were undergoing rapid economic change, and trying to build new infrastructure networks to keep up with it. Today, they are largely investing in incremental improvements to existing road and rail networks.
When Égert et al modelled the effects of infrastructure investment over the last decade or so of the period – around the time New Zealand was thinking about ramping up road spending – they found that:
Again, not great news for NZCID’s argument that motorways generate economic activity. If the OECD researchers had simply found that past motorway spending in New Zealand had an ambiguous or negligible effect on growth, I’d be willing to accept the possibility that we could achieve more positive outcomes from further spending. But their finding that past motorway spending has been a drag on growth makes me worried about NZCID’s policy prescriptions.
There is, in short, a risk that NZCID is confidently recommending the wrong strategy for New Zealand. A strategy that has little robust empirical evidence to back it up, and which could easily backfire and reduce our growth prospects.
What could a responsible lobby group do differently?
First, rather than arguing for an increase in the quantity of investment, it could argue for an increase in the quality of investment. We know that this is a challenge for current transport spending. For example, a Ministry of Transport review that I covered last year (parts 1, 2, 3, 4) found that benefit-cost ratios for new and improved state highway have fallen significantly over the last decade:
Second, it could consider the role of transport investment in improving the choices available to people. As I’ve argued in the past, cities are diverse places, and the people living within them don’t all want the same thing. Some people love the big car and the big house – which is great, as long as they pay for the carbon pollution and don’t run anyone over. Others would be happier living in an urban neighbourhood and getting around on foot, bicycle, or public transport – and that’s also great.
Having more choices raises individual and social wellbeing. Unfortunately, transport policy has historically been “one size fits all” rather than “made to measure”. As there’s no real evidence that motorway spending has a positive effect on economic growth in New Zealand, wouldn’t it make more sense to invest in improving transport choices instead?
Motorways and economic growth: What do you think?
One challenge in writing about hyper-local issues like transport infrastructure and urban planning policies is that it’s easy to lose sight of the big picture.
Planet-wise, the big picture is climate change. As California Governor Jerry Brown said in a recent interview, our environmental impact increasingly has an “uncompromising gravity”: climate change is a potential extinction event for the human race. This is difficult to comprehend:
The impact of anthropogenic greenhouse gas emissions can readily be observed in the temperature record. For example, climate scientist Ed Hawkins recently made this mesmerising and worrying animated gif of 156 years of temperature deviations:
As Jerry Brown notes, durable investments like transport infrastructure, electricity generation, and the built environment in general lock in future emissions. The things we build today will shape our behaviour and constrain our options in the future.
That’s one of the reasons why it’s so important to build cities that give people the opportunity to live in proximity to jobs and urban amenities, and which offer people abundant and attractive transport choices. The alternative is travelling ever-longer distances by car, and emitting ever-more carbon dioxide.
In the long run, electric vehicles might make this tenable for the climate, but it ain’t going to happen quickly. The NZ government’s current expectation is that EVs will make up at most 2% of the fleet in 2021. (I would love to be proven wrong about this!)
However, sticking with the “big picture” theme of this post, urban form isn’t necessarily the biggest problem we face – or the biggest opportunity to do better. A consistent global approach to carbon pricing would be fantastic. More rapid uptake of carbon pricing at a national level would be almost as fantastic.
Or how about a really radical idea: Stop subsidising fossil fuel extraction and use.
The costs of fossil fuel subsidies are large, and probably outweigh the total value of carbon taxes levied on burning them. New research from UK economist Radek Stefanski suggests that subsidies for fossil fuels cost a total of 3.8% of global GDP, or $1.82 trillion per annum.
Because consistent data on fossil fuel subsidies is hard to come by – many subsidies are buried in obscure expenditure categories, or disguised as distortions in the tax code – Stefanski develops an innovative estimation technique. He observes that emission intensities – carbon emissions per dollar of GDP – follow a predictable “inverted U” shape, as shown in the following chart.
But some countries deviate from the trend: their emissions are higher than predicted by their development level. Stefanski uses that to identify the degree to which governments must have intervened in order to make fossil fuels artificially cheap.
Interestingly, this results in a lower estimate than previous studies using alternative methods, e.g. focusing on variations in prices for fossil fuels. This suggests that, if anything, Stefanski’s estimate of $1.82 trillion in fossil fuel subsidies is on the low side.
The disturbing thing is that there has been an increasing trend towards subsidising fossil fuels over the last 15 years, in spite of the fact that the evidence on the ill effects of burning them is increasingly clear. That’s illustrated in the following chart, which illustrates variations between countries that “tax” fossil fuels and those that subsidise them. Essentially, the taxes have grown smaller and the subsidies larger.
The Oceania region has also moved towards offering substantial net subsidies to fossil fuels. As Stefanski doesn’t provide a country-by-country breakdown, it’s not clear whether this trend is driven by Australia’s fetish for coal mines, or whether New Zealand also participates in the madness. But it’s not good.
Lastly, it’s worth considering what the optimal tax on fossil fuels might look like in the aggregate. (It’s almost certainly not a $1.82 trillion subsidy!)
Credible estimates of the social cost of carbon dioxide emissions range from around US$37/tonnne to US$220/tonne. (There is significant uncertainty about exactly how bad climate change will be for human civilisation.) Globally, we emit around 35.7 billion tonnes of CO2 from burning fossil fuels.
That implies that burning fossil fuels imposes a social cost – which will be experienced primarily by young people and future generations – in the range of $1.3 trillion to $7.9 trillion.
Basically, instead of subsidising fossil fuel extraction and use to the tune of 3.8% of global GDP, we should tax it a similar amount. That’s a measure of how bad current global policies on climate change and fossil fuel use are.
Something to keep in mind…
Welcome back to mid-week reading, which is (happily) becoming a more intermittent feature. One of the most interesting things I’ve recently read was Jonathan McCalmont’s exploration of anarchist scholar James C Scott’s arguments about the way that governments interact with their people: “Seeing like a state: why strategy games make us think and behave like brutal psychopaths“:
Second, on a different note, Tim Watkins (Pundit) reflects on the government’s reaction to the Auckland housing crisis. While the article’s a few weeks old at this point, Watkins’ points are still worth considering:
Watkins also highlights infrastructure as a key problem:
Third, the Economist offers a good analysis of the opportunity that current low fossil fuel prices offer for policy reform:
Lastly, new evidence from New York shows that protected cycle lanes, in addition to being safer and more enjoyable for people on bikes, can also improve life for people in cars:
I’m back to a mostly normal post-writing schedule, but mid-week reading will continue as an intermittent feature.
One of the most interesting things I’ve read recently was Jim Newton’s long interview with California Governor Jerry Brown (in UCLA Blueprint). Brown served two terms as governor in the 1970s and 80s, left politics for a while, and ultimately returned to serve another two terms as governor. In the 1970s, he was known as a prescient environmentalist (“Governor Moonbeam”); today, he’s had to address major long-term challenges, including a brush with fiscal meltdown in 2008-2012, responses to climate change, and a poorly functioning housing market. He also inspired the Dead Kennedys’ song California uber alles.
One of the reasons I keep a close eye on California is that it’s often at the forefront of change. And while that throws up occasional perversities, like Los Angeles’ car-based sprawl and congestion or the San Francisco housing market, it also tends to develop solutions to those problems.
Speaking of technology and solutions to long-standing problems, The Age transport reporter Adam Carey reports on a pilot programme for road pricing. Transurban, a major Australian toll-road operator, has been gathering data on the behavioural implications of road tolls. They recognise that existing funding sources – principally petrol taxes – will come under pressure as electric vehicles enter the fleet… and, furthermore, that this will offer opportunities to price to manage congestion:
As it happens, Australia’s already got a funding problem – petrol taxes haven’t kept pace with roads spending:
It is a time of transition, here and elsewhere. In Idealog magazine, architect Blair Johnston writes about “how higher density is Auckland’s destiny“… and how design must respond in order to enable that.
Johnston goes on to identify four other ways in which design must be tailored to the Auckland context, in response to our desire for privacy in our private spaces; our need for usable public spaces; our demand for flexibility in our living spaces; and the affordability challenge.
Lastly, I highly recommend reading lawyer Andrew Geddis’ summary of Parliament’s 2014 election review (on Pundit). As local body elections are coming up, we must consider how our democratic processes work, and how they don’t. The election review is a good place to start.
Unfortunately, as Geddis notes, the Parliamentary committee didn’t reach any agreement on concrete actions to overcome the youth turnout problem:
That’s it for the week. Post any other articles of interest in the comments!
Parking policies are frequently bizarre. Parking is, after all, a private good – it is both rivalrous (two cars can’t park in the same space at the same time) and excludable (if you don’t want someone parking in your space, you can keep them out). In that respect, it is more like a refrigerator than a public park.
But unlike a refrigerator, there are all sorts of public subsidies and regulations affecting parking. Although refrigerators are arguably more of a necessity of life than parking, councils don’t impose minimum refrigerator requirement for homes and offices. Central government doesn’t provide a tax subsidy for employer-provided refrigerators. And councils don’t invest in (or subsidise) public refrigeration facilities.
And if they did, it would almost certainly result in some perverse outcomes.
A recent NZ Herald story provided an example of how parking subsidies can lead to odd outcomes. (It was also a fine example of meaningless “gotcha” journalism, but never mind that!)
Here’s the jetski in question:
The article implies that the panel member in question is rorting the system or acting unethically by using their employer-provided carpark to store a jetski. But, if you think about it, it’s actually a good illustration of the poor logic behind many existing parking subsidies.
Let’s back up a step: what subsidies are we talking about, exactly?
In the Auckland city centre, carparks have a market value, which is a good thing. The removal of minimum parking requirements in the 1990s led to an increase in the price of parking – and also to increased development as new buildings weren’t encumbered by the need to provide unnecessary but costly carparks. At present, Auckland Transport is leasing downtown carparks for between $110 to $490 a month – although the cheapest ones are fully sold out. Private operators seem to be supplying them at around $250-$300 per month.
So an employer-provided carpark in the city centre is likely to be worth somewhere in the range of $3000-$6000 per annum. Because fringe benefit tax isn’t levied on carparks, this is worth the equivalent of $4500-$9000 in salary for people paying the top marginal tax rate (33%). (As the panel members probably do.)
That’s a large public subsidy for a small bit of concrete!
In theory, the rationale for the tax subsidy on employer-provided carparks is that it makes it less costly for people to commute to work, and hence encourages people to enter the workforce. But the panel member’s jetski illustrates the absurdity of that approach.
For one thing, people have (or should have) a range of choices about how to commute. Some prefer to drive. Others may take the bus, train, or ferry, or walk or cycle to work. Consequently, a significant share of commuting trips don’t end in a carpark. Based on Census data, around half of the people working in the city centre in 2013 didn’t drive to work. A bit over one in four workers throughout Auckland didn’t drive to work.
Consequently, trying to subsidise commuting by subsidising parking is likely to be a distortionary and inefficient policy. Some people will change transport modes in response to cheaper parking, resulting in additional road congestion in peak periods. Others will be left with a subsidised parking space that isn’t much use to them.
The panel member who used their parking space to store a jetski probably falls into the latter category. They might walk to work, or take the bus or train. This leaves them with a bit of costly concrete that they don’t need to store a car – so why not use it to store another vehicle instead? I can’t blame them for that.
The jetski has apparently been removed from the parking space, but the policy distortions that led to it being there in the first place remain. So what could we do about that?
The key is to realise that our ultimate aim is to enable mobility, not to simply provide carparks, and make policy accordingly.
For some people, mobility means a monthly public transport pass, or a bicycle and access to a shower at work. But current fringe benefit tax policies discourage employers from offering those solutions to their employees – an employer-provided PT pass would be taxed as regular income, while a carpark is exempt from tax. We need to level the playing field.
The best way of doing so is by removing the fringe benefit tax exemption for carparks, but if that’s not political possible then a good alternative would be to exempt PT passes from FBT, as the Green Party has proposed.
Another alternative would be to offer people the option to “cash out” employer-provided carparks. It’s especially bizarre that employers aren’t required to offer this choice, as the current government changed employment law to allow people to exchange one week of annual holiday for the equivalent in cash. Why not adopt the same approach for carparks, which could easily be worth more than holiday pay for many workers?
Lastly, we also need to make some choices beyond how we price and subsidise parking. Getting a great range of transport choices will often require us to use existing road space differently. Sometimes the only way to get a dedicated bus lane or a safe, separated cycle lane is to remove a few on-street carparks. We need to look at those choices in a holistic way – i.e. do they improve overall mobility and access to destinations – rather than simply insisting that all carparks must stay in place.
How do you think we should address parking subsidies?
Auckland Transport have confirmed they’ll move into the current Vodafone building on Fanshawe St at a saving of $1 million per year
I know a lot of their city based staff catch PT in to the city and due to the distance most would probably want to transfer to a bus to get to the office. As such I wonder if this will move will expedite improvements in transfers in and around Britomart as well as pedestrian facilities on Fanshawe St. And with their buddies at the NZTA in the HSBC building the move will make perhaps they could even have a fleet of bikes for staff moving between the two locations making use of their new Quay St cycleway.
It will also likely be a good llocation for them if they build light rail as planned
Hi, and welcome back to Sunday reading. Starting off here is an interview with one of my favourite urban observers, Christoper Hawthorne with the Los Angeles Times. Hawthorne has been actively documenting the transformation Los Angeles has been going through over the last decade. Hawthorne has framed the story in a historical perspective calling the current era, the ‘3rd Los Angeles’. Here he is interviewed by Jon Christensen for Boom magazine.
As part of the public conversation about the future of Los Angeles Hawthorne runs a lecture series at Occidental College that seems comparable to our Auckland Conversations. It’s admirable to see a writer having the range and latitude to contribute so meaningfully to the public conversation.
It seems the urban conversation is not as sophisticated in New Zealand and Australia as it could be. Here is an interesting study that looks at how newspapers cover local intensification projects in Australia. The findings conclude that writers sensationalise the issues with dramatic references and emotive language. Katrina Raynors, “Media picture of urban consolidation focuses more on a good scare story than the facts“, The Conversation.
Speaking of rolling back decades of past mistakes, Matt had some great posts this week on the recent NZCID policy dump. This comment on road pricing by MFWIC is worth mentioning:
Jane Jacob’s 100th anniversary was celebrated this weeks with lots of adoration, some critiques and a fair amount of misunderstanding. Biographer Peter Laureance provides a useful summary of what was debated last week over the innertubes with links to several articles. Peter Laureance, “How best to use, abuse, and criticize Jane Jacobs” Archpaper.com.
I found this bit particularly interesting:
While Jacobs was battling motorway expansion and superblock modernism a quite distinct history was unfolding in Copenhagen. Athlyn Cathcart-Keays, “Story of cities #36: how Copenhagen rejected 1960s modernist ‘utopia’“, The Guardian.
The US Feds took a fact-finding tour of the Netherlands to figure out how they have achieved such a high level of bicycle use. The report concluded, surprise!, that “much of the Dutch design approach can be adapted to US context”- US Bicycle Network Planning & Facility Design Approaches in the Netherlands and the United States, FHWA. Here are some takeaways from the report:
Of course we can’t so easily translate best practice cycleway design in NZ. Here Bike Auckland raises the serious issue of our current road rules and standards of practice. Tim Duguid, “Ride, Interrupted – the Stop-Start Bugbear“, Bike Auckland.
Please share your links in the comment section.
I’ve written before about the increasing problem of cars parked on footpaths, often completely blocking them and forcing pedestrians out on to the road to get past. From what I can tell a couple of common reasons seem to be
Yet while we have campaigns telling pedestrians to be careful, we’ve never had one about this menace. So perhaps Auckland Transport could copy this idea from the UK highlighting some of those who suffer the most from when people park on footpaths.
How about it AT?