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Greenbacks Über Gridlock
REACH Task Force Shows L.A. How to Save Billions
in Smog and Congestion Costs

by Ward Elliott
Professor of Government
Claremont McKenna College


In recent years, air pollution and congestion have cost the average household in the Los Angeles Basin about $4,000 a year -- about $16 per workday. Since 1990 the average household in the South Coast Basin has lost four 40-hour workweeks a year to traffic delay. By 2010, if official models are right, smog costs could stay the same or decline, but congestion costs will rise to $2,850 a year per household, roughly $11 per workday. The average household in the Basin would then lose ten workweeks a year in traffic delay. California smog control planners have run low on cost- effective conventional controls for smog and congestion. In 1997, after two years of deliberation and $1.5 million worth of study, Reduce Emissions and Congestion on Highways (REACH), a blue-ribbon California policy Task Force, unanimously recommended that full-scale emissions charges and congestion charges be studied and developed for the long run, and HOT (high-occupancy/toll) lane demonstration projects for the short run. Subsequently both recommendations were unanimously adopted by the Southern California Association of Governments, the area's regional planning agency. This article represents the author's analysis of the Task Force's studies and findings.

REACH's models suggest that a combination of high-resolution emissions charges averaging a penny or so a mile, and congestion charges of 10-30-cents per peak-traffic mile could produce smog reductions worth more than $200 million a year. Depending on coverage and modeling assumptions, congestion charges could also save up to three or four billion dollars a year by reducing travel delays. This could save the average household in the Basin about $2-3 per workday, $6-700 per work year. See Appendix. In the process, it appears that some of the combinations would generate more than enough revenues to replace all 1991 transportation taxes, fares and fees, or, alternatively, to replace two-thirds of 1991 property or sales taxes. 90 percent or more of the benefits would be from congestion relief.

Until the late 1990's emission, and especially congestion charges have not been popular with the general public, but, if the models and the Task Force's attitude surveys are right, adopting some combination of the two seems to be a "no-brainer" compared to all other alternatives, including doing nothing.


I. The Costs of Smog and Congestion: about $4,000 per household per year and rising?

Southern Californians have been struggling for more than 50 years to control smog and congestion. On smog they have been gaining, but they still have a long way to go. The Los Angeles Air Basin has long had the worst air and heaviest pollution costs in the country.

For many years, smog cost estimates for the South Coast Air Basin have tended to range between $10,000 and $20,000 per ton; so have the South Coast Air Quality Management District's (SCAQMD's) cost cutoffs for regulatory pollution controls (See Appendix Fourteen of longer, more documented version available from the author on request). The South Coast (Los Angeles Basin) Air Quality Management District's estimates still seem to be in this range, but more recent USEPA estimates are much higher (Appendix Fourteen of longer version). The REACH Task Force's Strategy Committee, which did not have access to the USEPA estimates (because they had not been published), used estimates of $9,000 per ton of Volatile Organic Compounds (VOC), $10,000 per ton of Oxides of Nitrogen (NOx), and $21,000 per ton of Particulate Matter (PM10), based primarily on cost cutoffs in the 1994 South Coast Air Quality Management Plan. Regulatory cost cutoffs in the 1999 AQMP, the most recent, are somewhat higher, but these older estimates, though necessarily tentative, still seem as serviceable as any others available. If every ton of VOC, NOx, SOx, and PM10 in the Task Force's 1993 baseline inventory did $10,000 worth of damage, total 1993 smog costs in the Basin would have been about $11.5 billion a year, or about $2,200 per household per year. Under these assumptions, smog costs would be about six dollars per household per calendar day, six cents per average vehicle mile traveled. By several different reckonings, about 80 percent of the damage costs from mobile sources in the South Coast Basin were from ozone and its precursors (See Appendix).

As for congestion, Southern California was already in the slow lane when the Task Force met -- and it has been getting much slower if measured by the growing traffic density on city streets and freeways, and somewhat slower if measured by trends in average trip time. Average travel time to work in the Basin, after holding steady for many years (Meyer, 1994; Gordon and Richardson, 1994), started rising in the mid-1980's, increasing from 23.6 minutes in 1980 to 26.4 minutes in 1990 (L.A. Times, Nov. 27, 1996, p. A5 c. 4). Before, during, and, no doubt after this slight increase, the commuting public managed to offset much of the catastrophic, density-based gridlock projected by transportation professionals by moving farther into the suburbs, often drawing jobs with them. Some may continue this sprawling process in the future -- as long as there is room for them to do so.

But, for a sizeable minority of 1990's commuters, maybe a third, commuting already involved billions of dollars worth of delay, and most planners expect the situation to get steadily worse. Measured by traffic density, Los Angeles has had the worst congestion in the country for more than fifteen years. In 1991, according to Cameron (1994), the average household in the Southern California Association of Governments (SCAG) area lost the equivalent of four 40-hour workweeks a year to congestion delay of private autos only -- plus more weeks if you count delay for commercial traffic. At an assumed time value of $6.80 per person hour, the resultant costs in delay and lost productivity have been estimated at about $7.7 billion for 1991 -- $9.4 billion, if you also count the extra cost in fuel, maintenance, and accidents (Calculated from 1996 SCAG Draft RTIP, Table II-12, for cars, and, for all traffic, 1991 TRIPS Origin and Destination Survey, summarized in Cameron, 1994, p. 7; SCAG, 1988, Table B-5, cited, Cameron, 1994, p. 8, n. 22; see Hanks and Lomax, 1990).

These imply 1990's congestion costs on the order of $26 million per calendar day, and of nine cents per average mile, 23 cents per peak-hour vehicle mile, and two cents per off-peak mile, assuming that 36% of the VMT and 85% of the congestion delay take place during peak hours. For the average household in the Basin, total congestion costs in recent years would be about $1,800 per year, $7 per workday. Half of the congestion is recurrent, half varies with weather and "incidents," (though "non-recurrent" congestion is still overwhelmingly concentrated in peak hours) and could be somewhat harder than recurrent congestion to control with economic incentives of the type discussed here. But recurrent congestion alone cost the average family in the Basin $900 a year in the 1990's, and "non-recurrent" peak-hour congestion another $630 or so. Both could be substantially reduced with congestion charges.

By 2010, most studies project two- to threefold increases in auto traffic delay even if tens of billions of dollars worth of additional roads and rail lines are built by cash-strapped Los Angeles and Orange Counties (Wilbur Smith Associates, 1996, p. 8; SCAG 1996 Draft RTIP, Table II-12). If the new facilities are not built, traffic delay would increase by three- or fourfold. (SCAG 1996 Draft RTIP, Table II-12). The average round-trip commute -- now about 53 minutes -- could easily be an hour and a half longer a few years later in this century. If auto delays increase by, say, threefold, the average household, which now loses the equivalent of four workweeks a year to traffic delay would lose 12 workweeks a year to traffic delay, a loss exceeding $3,200 a year with no allowance for additional fuel, maintenance, accident costs, or time loss costs for commercial traffic.

These numbers are approximate because planning documents do not always make it clear whether they are counting calendar days or workdays, private traffic only, or all traffic, freeways only, or all roads, how they define peak hours, and so on. Many of these conversion problems, and some field-expedient ways of coping with them, are discussed in the notes to the Appendix. There is much room for debate about the projections -- whether and when the tens of billions of dollars of assumed expansion will take place, and whether people will continue to find ways to sprawl and adjust their way out of the worst forms of gridlock. And, as we have seen, there always has been much room for debate about smog costs.

It is one thing to acknowledge that there is room for debate at the margins, but quite another to ignore the massive, undeniable problems at the core. By the best available midrange estimates, the average household in the Los Angeles Basin seems to lose about $4,000 a year in life, health time, and productivity, and no one thinks that the losses, due to congestion at least, will decrease in the foreseeable future. These losses are not far from what the average household now pays in yearly property and sales taxes combined, but with one big difference. You do get something back for your taxes. But you get nothing at all back for your lost hours of time, life, health, and productivity.

With such high stakes, it is not surprising that the SCAG, the SCAQMD, and an industry consortium called COALESCE set up a 75-person community task force to Reduce Emissions and Congestion on Highways (REACH), and that the task force spent two years of research and deliberation, and a million and a half dollars of research funds, looking for better ways to reduce this heavy burden.

The Task Force considered a wide range of incentive alternatives, ranging from simple, low-resolution ones like gas taxes or dirty-car ownership fees, to more complex, high-resolution ones like time- and place-specific congestion charges and emissions charges based on each vehicle's actual emissions characteristics (see below). In the end, it recommended the highest-resolution strategies available -- emissions charges and congestion charges -- for mid- and long-term implementation throughout the Basin. It also recommended HOT lanes, a high-resolution congestion-charge variant, for early study and adoption in selected corridors (REACH Task Force, 1997, pp. 3-4).

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