Clearing the Air on Smog Without Clearing Out Jobs
To traditional Keynesians, inflation and employment were Siamese twins: You couldn’t have a lot of one without the other.
That idea has since fallen into disrepute. Can the same now be said for the notion that smog and jobs go together?
For California, the question is crucial. Businesses that leave often cite environmental regulations, and the jobs most threatened by clean-air requirements tend to be in manufacturing, which are important for a state that is so magnetic to immigrants.
Fortunately, Californians needn’t choose between clean air and jobs. Better yet, we needn’t wait decades for improved air. The realization is dawning that market pricing for commodities traditionally considered free--water, for example, or breathable air, or even a rush-hour place on the Ventura Freeway--can save jobs and the environment simultaneously.
The realization is also dawning that 60% of the region’s smog is caused by driving, and that while business is reaching the point where relatively large expenditures yield only small reductions in pollution, enormous gains per dollar are still available from cars.
Consider: Steve Gould of the state Bureau of Automotive Repair, which runs the smog-check program, figures that the dirtiest 10% of cars statewide emit 25% of the hydrocarbons and 50% of carbon monoxide. Thus, a huge improvement in Southern California’s air could be had for less than $1 billion--the likely cost of buying and junking all those cars.
That’s a pittance; the region’s latest clean-air plan, which regulates everything from business to barbecuing, is expected to cost nearly $1 billion for each 1% reduction in smog, or $4.8 billion a year through 2010.
Junking cars might be 25 times cheaper, but even if these figures are exaggerated tenfold, the benefits are still impressive.
It’s summertime, and the breathing is wheezy. Southern California’s perennial veil of smog offers an ideal opportunity for market-based programs to show their stuff, and an odd coalition of forces is lined up to support these ideas. It includes the liberal Environmental Defense Fund, the construction industry and the Claremont Institute, a conservative think tank.
The basic idea is that, like phone lines, roads and freeways represent a large capital investment with a finite capacity for which demand varies widely but predictably. The question is, how to allocate the resource?
Phone carriers use price. For example, a residential call from Los Angeles to New York on AT&T; typically costs nearly twice as much during the business day, when demand is heaviest, than on a weekend.
Amazingly, as much as 43% of peak-period driving is by people who aren’t going to work. And while the roads routinely reach their capacity of cars, they can still move far more people, because nine out of 10 cars out there contain just one person.
The good news is that the South Coast Air Quality Management District is considering a basketful of market-oriented plans. For example, because it’s cheaper for some businesses to curb pollutants than for others, the agency may let firms buy and sell pollution credits. It may even let businesses use credits acquired by buying and junking pre-1975 cars.
You could buy most of the dirtiest 10% of cars in the SCAQMD--about 750,000--for less than $1 billion. Unocal, in a clever pilot project, managed to buy 8,400 such cars for $700 each. The cars would have to be running, of course, and registered in the district for at least, say, a year. And no more such cars could be allowed in.
The SCAQMD has already adopted such a rule for the aerospace industry, which can offset productive pollution from coatings by eliminating unproductive pollution from old cars.
Politically, buying up old cars and trading the resulting pollution credits is the easiest market-oriented anti-pollution pill to swallow, but it can’t work by itself. In declining order of palatability, here are some others:
* Jitneys: Regulatory barriers now prevent van services such as Super Shuttle, the airport carrier, from springing up to serve commuters cheaper than taxis and better than buses.
* Smog fees: Auto registration fees could be based on emissions; drivers of clean cars would get rebates funded by levies on dirty cars.
* Fast lanes: A three-per-car lane on the San Francisco Bay Bridge ignited spontaneous ride-sharing in Oakland. Drivers in need of passengers picked them up on the street; a whole etiquette developed, and local authorities have sanctified pickup points with signs.
* Parking: Free parking would be replaced by a parking allowance. Employees who car-pool could keep most of the money instead of renting space. “When an employer at the Warner Center increased employee parking fees from zero to $30 per month, the share of solo drivers dropped from 90% to 46%; average vehicle occupancy rates increased from 1.08 to 1.55,” writes Michael Cameron in the EDF study.
* Peak pricing: Rush-hour freeway users would have to pay. Cheap modern technology--already working on San Diego’s Coronado Bridge--enables a computer to read bar-codes on speeding cars. Motorists could be billed monthly by mail. Of course, car pools would divide the cost. The revenue could be used for better transit.
“All the proposals I’ve seen for air quality and congestion give consideration to the equity issue,” says Bruce Devine, an economist at the Southern California Assn. of Governments, adding: “I think they would be effective.”
These ideas are catching on now because there’s little alternative. Society can’t afford new roads or more pollution; the EDF study notes that from 1966 to 1986, California’s population rose 42% and real personal income rose 103%, but real transportation spending fell 35%. And Southern California already has America’s dirtiest air.
As Cameron notes, the point is to allocate to people the true cost of their behavior and then let the market work its will. He cites an estimate of at least $7.4 billion annually for the health and other costs of pollution in the region, plus congestion costs of perhaps $9 billion annually in time, fuel, insurance and wear and tear.
Reducing congestion would also cut stress and accidents and save lives. Consider Southern California without smog and traffic. To paraphrase John Cheever: Oh what a paradise it would seem.
