Wednesday, November 12, 2008

Electric Grids, Gas Taxes and Transit Expansion

David Roberts has a post up on how a gas tax isn't enough. He's right. There is no way we can ever raise enough money for anything we really want with just a gas tax. Especially if we really want to reduce VMT and increase walking, biking and transit. Well as usual, I'm going to do some thinking out loud and let you all shout me down or make the thought better.

What if we got rid of all those laws that pushed apart electric companies and transit companies? Some comments have been made about just getting people on transit instead of changing the vehicles. But honestly, I feel like San Francisco is a better urban place because bus exhaust is not flowing in my face when I'm walking down the street. One thing I noticed this weekend in Charlotte was that the bus terminal is going to lead someone to cancer. The downtown bus center has buses idling under a canopy at all hours creating a smell that means particulate concentration can't be very good.

In any event, with the electric grid needing a serious upgrade, how much more would it really cost to bring overhead wires to the most traveled routes and tie them into the new grid? Some of these could be light rail, some could be trolley buses, and other could be streetcars. But all could be easily adapted to alternative energy if they were using electricity to start with. But also, how could this be a mutually beneficial relationship?

Some thoughts I came up with:
  • Use power rates as sort of a business carbon fee. Businesses paying the tax would directly benefit because infrastructure is used to get to work and retail spaces. Bikes, transit, even roadways would benefit from such funding mechanism.
  • Transit could get a lower power rate as part of the power company. This means operations could be less expensive meaning more service and if enough transit vehicles are running, perhaps cheaper energy because of power equalization during greater off peak power consumption.
  • If we improve the grid and transit is a part of it, charging your plug in hybrid or scooter would pay into the transportation fund as well generating funding for the transport agency as well.
  • If we have a business power fee, could it allow us to get away from the sales tax?
  • This type of fee would reward more efficient building practices.
Any thoughts on this? Does anyone have any other crazy fundraising schemes?


Alon Levy said...

Roberts doesn't provide any evidence for his position that gas taxes don't work. There is, however, evidence that they do - for example, France, where taxes have put the cost of gas at $7-8 per gallon, has twice the average fuel economy of the US.

Pantograph Trolleypole said...

Yes Alon if you jack them up to $7 a gallon you'll have all kinds of money. The problem is people see their addiction as a sacred cow. If we can change the political will to do such a thing more power to us, but right now gas taxes aren't going to help us if we continue down the same path.

arcady said...

The other problem is that as people start driving less, gas tax revenue falls, and if this happens due to a price increase, then there is strong political pressure to lower the taxes, rather than raise them at this point.

I also think the idea of plug-in hybrids and electric personal automobiles in general is a bad one. It takes our current relatively cheap and stable price of electricity and ties it to the rising and very volatile price of oil. I don't want people burning our still reasonably cheap electricity on lugging around two-ton metal boxes with all the implications thereof. I'd much rather it was used for more efficient purposes, like powering transit systems.

Anonymous said...

If you let the electric companies run the electric-powered transit, the utility companies will eat you alive. They will make the case that the city needs to pay for transit (farebox won't recover 100%) and they will just keep pushing up the price that they charge the city.

Maybe this could work in places with municipal (government-owned) utilities like Sacramento and Los Angeles, but I really don't think you know what you are getting into by having the electric company operate a major consumer of electricity. The utilities are powerful political creatures; don't think the desire of governments to be thrifty will stand a chance against them. They're good at extracting returns, and if you give them the streetcars, they will extract returns just like they did before PUHCA in the 1930's.

ChiefJoJo said...

Obviously, we need a national strategy for energy, carbon reduction, and infrastructure investment that would seamlessly guide all our decision-making. Part of that would be either a carbon tax or at least a cap & trade bill... this will have all sorts of good outcomes, not the least of which would be higher fuel costs and incentives for electrified mass transit. The renewable energy sources as power for the smart grid will come eventually through innovation if a cap avoids loopholes. Obama & co have their work cut out for them.

I've also heard Thomas Friedman talk about a gas price floor of say $4-5. The tax would be variable such that prices remain steady and relatively high. Neat idea, but I would prefer a graduated increase in the gas tax over time, so that infrastructure investments and automobile technology could keep up with the rising prices, say +$.25/gal/yr for 6 years... but that's pie in the sky.

Alon Levy said...

Arcady, the energy-efficiency of plug-in hybrids isn't much worse than that of subways, if at all.

arcady said...

alon, per pax-mile, plug-in hybrids might be as efficient as subways, the problem is that when you have everyone get around by car, you suddenly need lots of space for those cars to travel, and lots of space to store the cars for the 95% of their lives that they're not moving. And that results in lower density, which results in a high number of passenger-miles travelled, and makes the built environment an automotive wasteland.

Anonymous said...

Now that the economy is tanking, the people at Cato & Reason can put up big banners on their buildings saying.


Alon Levy said...

Arcady, you're only right up to a point. Car-centric locations achieve medium densities given enough space constraints - for example, Los Angeles. I also think plug-in hybrids will make it easier to rezone for smaller front yards and small garages, and build high-rises by the freeways, simply because they make less noise than traditional cars.