Both sides are to blame for pain at the pump

It's been a while since I've written anything on here- life has been pretty busy lately. Between the Amtrak trip, starting a new job, and moving into a new apartment in Downtown Cleveland, there hasn't been a whole lot of downtime. Now that I am all settled into the routine of being an urban dweller, I hope to post more frequently.

"Gas pump entertainment" by MarkinDetroit is licensed under CC BY-NC-SA 2.0.

Here, I want to discuss something that has been on my mind for some time now- multimodal transportation- or more specifically, the lack thereof. To me, a multimodal transportation system means that you are able to easily and safely utilize multiple transportation methods to carry out the needs of life. This includes transit, walking, biking, scooters, inter-city rail travel, air travel, and anything else. Yes, this includes driving as well.

As it stands currently, our transportation system is extraordinarily unimodal. We drive everywhere.  Indeed, 76% of commutes in the United States are made by car (Tomer, 2017). If you're from the Midwest or anywhere other than New York, Chicago, Boston, DC, or the Bay Area, the percentage of people communing by car is MUCH higher- in Columbus, for example 82% commute alone in automobiles (Marbury, 2022). 

"London goes multimodal (transport, that is)" by D1v1d is licensed under CC BY-NC-ND 2.0.

This system is no accident- it was the result of deliberate attempts by the federal government to artificially sustain economic growth after World War II. The suburban experiment, and the terrible government policies that accompanied it, are to blame for this. 

The system as we have created it is dangerously oil dependent. Since the overwhelming majority of Americans drive, they need gas. Yes, there are electric cars, but gas still dominates the market. This oil dependence and auto dependence is a massive impingement on our freedom.

Pain at the pump

It is no secret that gas prices are at a record high, and many Americans are feeling this pain at the pump. I'm a little conflicted on this. High gas prices personally don't impact me, because I don't drive. As an urbanist, I love the jolt that higher fuel prices gives to other, more sustainable transportation modes. As a student of economics, I love how Americans are paying closer to the price that is socially optimal. But as a human, I don't like to see people suffer. 

While this shock in gas prices is due to a lot of factors, mainly global supply chain issues, our two political parties like to boil it down to two main causes. The Republicans blame Joe Biden, as if he unilaterally sets global oil prices. Democrats blame greedy oil companies. However, both sides fail to acknowledge that our lack of a robust, multimodal transportation system, and the failure to invest in such, is a massive culprit of this pain Americans are feeling. 

We have never learned our lesson. This is not the first time in history gas prices have been unacceptably high. Think of the early 1980s, the period from 2008-2014 or so. Gas prices were extremely high, and Americans were feeling pain at these times too. We could have taken these prior events as lessons and made multimodal transportation a priority. But we didn't.

The lack of other options, the lack of transit, safe cycling and pedestrian infrastructure, the lack of inter-city rail, means that Americans (outside of New York, Chicago, DC, and Boston) often do not have a choice but to eat the high cost of gas. They do not have the freedom to get on a bus to save their hard earned cash. They don't have the freedom to bike to work. They don't have the freedom to walk.

Think about a German city of similar size as Columbus or Cleveland. Because Germany invests in transit, cycling, trains, and walking, if Germans don't want to pay the high price at the pump (and yes, gas prices are at record highs in Germany too), they can get on the bus that stops at the end of their street. They can cycle to the train station. They can walk to the train station. They have freedom. More options equals more freedom.

A multimodal transportation system gives people freedom- the freedom to move as they see fit. The freedom to not be held hostage by the oil industry. The freedom to not be financially ruined by fluctuations in extremely volatile oil prices. 

The cloudy, nonsensical, and somewhat dystopian policy response

I am going to grill the Democrats here. I generally hate both American political parties, because neither represent my beliefs very well, at least when it comes to transportation. In any case, the Democratic majority is scrambling to find a way to reduce gas prices, and this has become a major goal for the Biden Administration (as evidenced by this tweet). At one point in time, President Biden was considering a federal gas tax holiday (Ferris and Cancryn, 2022). The federal gas tax of 18.4 cents per gallon that is already too low (it hasn't been changed since 1993, and inflation has all but eaten it all away), the 18.4 cents per gallon that does not provide sufficient funding to maintain our already crumbling infrastructure (Muresianu, 2022; Fritts, 2019). 

First, some economics. Gas has been way too cheap for way too long in the United States. In economics, we say that something is efficient if the consumer bears the full cost of the good they consume. This includes both the upfront monetary cost as well as external costs- the costs placed on other people. This is not the case for gas. We do not pay for the costs we place on the environment, the risk to life and limb, or the cost of maintaining infrastructure. As a result of having gas be so cheap, we implicitly subsidize driving. The market is not in equilibrium. Cheap gas is not socially optimal. Some economists believe that to have people drive at the socially optimal level, a gas tax of over $2 per gallon would be necessary (Mankiw, 2016).  A German economist even calculated that the optimal gas tax in Germany is $3.72 per gallon (at current exchange rates)(Tscharaktschiew, 2014). The combined gas tax in Ohio is 56.9 cents per gallon. That's how much we subsidize driving. It's like someone hands us $1.43 for every gallon of gas we consume, assuming $2 is the optimal gas tax. I don't know if this is true, but the point is we are essentially handing a pretty good chuck of change to Americans for every gallon of gas they consume.

Here is where I have a problem. The Democrats, just like Republicans, are extremely hypocritical. The Democratic Party is supposed to be the party of curbing climate change and protecting the environment. This is all well and good. However, it is clear that Democrats and Republicans alike can't get enough of cheap gas. We need cheap gas. But, it is impossible to support cheap, heavily subsidized gasoline usage while also saying we care about the environment. If we keep implicitly subsidizing the crap out of driving, we will continue to drive and burn gas at a level that is much higher than what is socially optimal.  We cannot possibly protect the environment while encouraging people to drive more. It's almost like people don't realize that driving pollutes the air. 

Democrats like to play the card of "we are helping society" card- we are "helping the poor". We cannot be helping society if we continue of the path of extreme oil dependence. Black Americans are much more likely to face the burdens of this auto dependence- Blacks are more likely to die in car accidents, disproportionately likely to live in areas near major roads, and are disproportionately exposed to transportation related air pollution (Raifman and Choma, 2022; Clark et al, 2020). Living near a busy road is also associated with asthma and other lung issues (Health Effects Panel, 2010). Living near busy roads means more exposure to noise pollution, which can have negative health effects such as stress induced illness, high blood pressure, sleep disruption, hearing loss, and more. (EPA, 2021).  Poor Americans, regardless of race, suffer similar fate. By encouraging more driving, we are making it worse for Black and poor Americans. Catch 22, Democrats.

"U.S. Capitol building" by Gage Skidmore is licensed under CC BY-SA 2.0.

So, to summarize, we support cheap gas, and therefore, we encourage driving. But we also want environmental justice, climate resilience, and social equity. It is not possible to achieve all of these goals. They can say all they want, but they are just perpetuating the existing condition. It makes no sense to me.

I understand that if we taxed gas heavily, it would disproportionately impact the poor. However, there are ways to mitigate the impact. This is why it is so important to have a robust, multimodal transportation system. If gas becomes too expensive, in principle, people should and could be able to switch to another mode without sacrificing too much. If we really want to curb global warming and promote equity, we have to raise the gas tax so people drive at the socially optimal level (i.e. less than current levels). Using the revenues raised, we must invest in safe cycling infrastructure, walkable communities, and transit. Doing so will give everybody more freedom, curb greenhouse gas emissions, and right some of the wrongs of the past. With a multimodal, sustainable transportation system, we will have the freedom to breath cleaner air and to not be screwed by fluctuations in gas prices. 

Sources

Clark, L. P., Millet, D. B., & Marshall, J. D. (2017). Changes in transportation-related air pollution exposures by race-ethnicity and socioeconomic status: Outdoor nitrogen dioxide in the United States in 2000 and 2010. Environmental Health Perspectives, 125(9), 097012. https://doi.org/10.1289/ehp959 

Environmental Protection Agency. (2021, August 12). Clean Air Act Title IV - Noise Pollution. EPA. Retrieved July 31, 2022, from https://www.epa.gov/clean-air-act-overview/clean-air-act-title-iv-noise-pollution#:~:text=Noise%20pollution%20adversely%20affects%20the,sleep%20disruption%2C%20and%20lost%20productivity. 

Ferris, S. and Cancryn, A.  (2022, June 21). Biden announces a likely doomed gas tax holiday. POLITICO. Retrieved July 31, 2022, from https://www.politico.com/news/2022/06/21/biden-gas-tax-holiday-00041244 

Fritts, J. (2022, March 1). How are your State's roads funded? Tax Foundation. Retrieved July 31, 2022, from https://taxfoundation.org/states-road-funding-2019/ 

Health Effects Institute Panel on the Health Effects of Traffic-Related Air Pollution, Traffic-Related Air Pollution: A Critical Review of the Literature on Emissions, Exposure, and Health Effects. Health Effects Institute: Boston, 2010. Available at www.healtheffects.org.

Mankiw, N. G. (2016). Principles of microeconomics (8th ed.). CENGAGE Learning Custom Publishing.

Marbury, D. (n.d.). Decreasing the 82 percent SOV rate in Columbus. Smart Columbus. Retrieved July 31, 2022, from https://smart.columbus.gov/playbook-assets/future-mobility/decreasing-the-82-percent-sov-rate-in-columbus#:~:text=Columbus%20roads%20are%20becoming%20more,to%20their%20jobs%20in%20SOVs. 

Muresianu, A. (2022, June 21). Suspending the gas tax is a mistake. Tax Foundation. Retrieved July 31, 2022, from https://taxfoundation.org/suspending-gas-tax/#:~:text=In%20the%20context%20of%20recent,is%20not%20indexed%20for%20inflation. 

Raifman, M. A., & Choma, E. F. (2022). Disparities in activity and traffic fatalities by Race/Ethnicity. American Journal of Preventive Medicine, 63(2), 160–167. https://doi.org/10.1016/j.amepre.2022.03.012 

Tomer, A. (2022, March 9). America's commuting choices: 5 major takeaways from 2016 census data. Brookings. Retrieved July 31, 2022, from https://www.brookings.edu/blog/the-avenue/2017/10/03/americans-commuting-choices-5-major-takeaways-from-2016-census-data/ 

Tscharaktschiew, S. (2014). Shedding light on the appropriateness of the (high) gasoline tax level in Germany. Economics of Transportation, 3(3), 189–210. https://doi.org/10.1016/j.ecotra.2014.06.001