Disagreeing With The New Yorker On Stimulus Vs. Sustainability

Eustace Tilley Considers Electric Cars
Eustace Tilley Considers Electric Cars

I’m a big fan of the New Yorker, and read most issues cover to cover. Their politics usually align with mine, and I always enjoyed Hendrik Hertzberg sticking it to the Cheney administration. But I have to take issue with some of their economic opinions. In particular, David Owen’s Talk of Town, Economy Vs. Environment, in the March 20 issue got me hot and bothered.

Owen’s basic position seems to be that to be sustainable we can’t spend, and if we spend we’re not sustainable. Therefore, the stimulus package and a long term goal for sustainability are incompatible. (With the subtext, apparently, that stimulus is more important.)

I have several issues with Owen’s position. For example, Owens doesn’t say much about spending on sustainability – there $15 billion of that. Much of that, because it’s focused on energy efficiency, will result in improved productivity. It turns out you can get a lot of productivity from sustainability improvements. It’s one of the magic tricks – called the “triple bottom line” – you spend less or the same up front, you save more, and you’re healthier and more productive. In this case sustainability is actually directly improving the economy.

But the bigger issue, it seems to me, is statements like this:

How do we persuade people to drive less—an environmental necessity—while also encouraging them to revive our staggering economy by buying new cars? The popular answer—switch to hybrids—leaves the fundamental problem unaddressed. Increasing the fuel efficiency of a car is mathematically indistinguishable from lowering the price of its fuel; it’s just fiddling with the other side of the equation.”

I agree that the popular answer is – while not wrong – incomplete at best. And of course, [intlink id=”622″ type=”post” target=”_blank”]as I pointed out the other day[/intlink], individual action is not going to save us. Instead, we need structural changes, such as incentivizing people to move back cities, where using public transit to get to work is reasonable. Or we need to enable people to telecommute more. If I telecommuted one day a week, it would save me at least $8 out of pocket (gas and tolls), plus over an hour of time in the car. Time people spend commuting, except for those few who can do business by phone while driving, is basically unproductive. So reducing commute times, or eliminating commuting altogether, actually improves the economy’s productivity.

In fact, Owen makes the opposite claim – that more efficiency will actually cause people to drive *more*, offsetting the savings:

Electric cars are not the panacea they are sometimes claimed to be, not only because the electricity they run on has to be generated somewhere but also because making driving less expensive does nothing to discourage people from sprawling across the face of the planet, promoting forms of development that are inherently and catastrophically wasteful.

I will agree that electric cars are not a “panacea,” although I don’t think anyone is saying that’s the case. But are electric cars, or hydrogen cars, or some kind of car that doesn’t run on fossil fuels, a legitimate part of a sustainable solution to both the climate problem and the poor economy?

Well, yes. There are two problems with Owen’s argument against them. One is that a key part of it is wrong. There’s been quite a lot of research on the question of whether higher gas mileage will cause people to drive more. The assertion is called Jevon’s Paradox, and it turns out it’s not really true.

Just as a simple thought experiment, assume my car suddenly got twice the MPG that it does today. Would I start driving twice as far to get to work? Hmmm, don’t think so. When I decide to get away for the weekend, would I decide “Santa Cruz is not good enough, because it’s *too close* – I think I’ll drive to Salinas instead?” Of course not. We drive where we drive because we want to go there, not because we have $X to spend on gas. The same is true of choosing a new place to live. Am I willing to spend an hour each way commuting just because my car gets twice the mileage? Of course not. I may choose to move farther away for other reasons (in the Bay Area it was because that was where the affordable homes were, for example), but being able to keep my gasoline use constant would not be one of them.

But there’s another fallacy in the argument as well, which is that sprawling development is determined by the gas mileage of our cars. This isn’t true. (Some people would say sprawling development is an experiment that didn’t really work.) Sprawl is a structural issue – it’s not caused by one thing or another, but by a combination of decisions, incentives, and disincentives. For example, there’s been a strong disincentive in the U.S. for mixed-use development – such as mixed retail and residential – particularly outside cities. As Nicolai Ouroussoff said in his article “Reinventing American Cities: The Time Is Now” in the March 29 NY Times Sunday Magazine article.

With their crowded neighborhoods and web of public services, cities are not only invaluable cultural incubators; they are also vastly more efficient than suburbs. But for years they have been neglected, and in many cases forcibly harmed, by policies that favored sprawl over density and conformity over difference.

I was at a new mall in Fremont yesterday, which is all retail and no residential. Of course, to get to this mall, people have to get in their cars. The place is pretty much dead after about 7pm. I suspect that Fremont’s zoning rules actively prevented this mall from being mixed-use, and even if that’s not the case (I’d have to research it) I’m sure they don’t have incentives in place for developers to create mixed use environments. Simply thinking about the possibility of mixed-use puts that mall in stark contrast to what might be.

So, we can use structural means (zoning, incentives, nudges, etc.) to help people drive less over time by making sure they can live near where they work, that they can use public transit, that they can telecommute, and so on. This will have multiple benefits – the famous triple bottom line. People will spend less on driving. There will be less pollution. And people will be more productive, if only because they’re not commuting so long.

But there’s no getting around the fact that people are going to drive sometimes. I still want to go visit Mount Rushmore, or visit my in-laws’ in Southern California. (Note: I already do this in my ordinary car anyway, so it’s not like I’m going to do this *more* necessarily.) This is where the benefits of the electric or hydrogen or biofuel car come in.

So my bottom line: Let’s build more cars, but let’s also change our zoning so that people don’t have to drive as far. No one will mind if the new freeways are less crowded.

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