Monday, December 29, 2008

good news from oregon

gov. kulongoski proposes replacing the gas tax with a VMT fee.
[link thanks to drudge, who undoubtedly posted it because of his fears that the satellite data could somehow be used by the state government for illicit purposes.]
[woo, another one: san francisco jumping on the bandwagon with a similar, but different, proposal to charge a congestion fee for entering parts of the city, similar to london and singapore.]

funny quote from the nytimes piece:
“The devil is in the details,” said a spokesman, Nathan Ballard. While Mr. Newsom supports congestion management, Mr. Ballard said, “Given the challenging economic times, we would hate to impose too heavy a burden on commuters.”
i'm pretty sure that it doesn't follow that in an economic recession, charging people for the true costs of their travel would be a "too heavy" burden. wouldn't building up public systems of transportation be ideal during periods where gasoline prices are low? (lower gas prices mean that drivers do _not_ pay the full costs of travel, and are likely to overconsume as a result...relative to the "optimal" balance between supply and demand that would result from properly pricing travel).

the question is: when is it a bad idea to make people pay full costs? it seems like, at root, the wider financial crisis is related to failing to account for true costs (in this case, the costs of risk). i'd like to see or do a study on this...additionally, the obvious (to me at least) benefits associated with pricing far, far outweigh any burdens imposed on commuters. health benefits from exercise (and, probably vastly reduced stress, judging by how san francisco drivers act behind the wheel), occasional face-to-face interactions with people on *gasp* trains and *gasp* buses and maybe at an intersection! (scary stuff, i know.) over the long term, maybe a change in urban forms to accommodate more pedestrians, transit users, and cyclists. air quality benefits, climate change benefits, fewer deaths...what's holding us back?

Americans have “a very parochial mindset” about driving, said Mr. McGoldrick, whose wife is English.

“It’s hard for people to envision anything else,” he continued, “because this is such a car culture.”

ah. THIS IS WHAT POLICY IS FOR. presumably policy-makers at the level of society understand external costs better than individual decision makers. legislate it and forget it. the benefits over time will far outweigh the costs.

some issues re: VMT fee.
you change the incentive from the amount of fuel you consume to the amount of distance that you drive. on its face this seems like a poor decision since you no longer incentive fuel economy, but this could be tackled with increasing the CAFE standards (also, the price of gasoline already incentivizes its efficient use).

a per-mile charge (or VMT fee) tells people that they'll derive a direct financial benefit for every mile of travel they forgo or for which they use an alternative mode.
this puts the right kind of behavior on the table at every decision to travel. once people pay large lump sums (on insurance) they'll tend to want to "get their money's worth". in this sense the best policy would be to shift all the costs of driving to a per-mile basis. why leave insurance as a lump, and charge a fee for everything else? align *all* of the incentives, oregon, and you'll have a first-best policy. until then, this is a step in the right direction.

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