Updated Report Shows CAHSR’s GHG Reductions Less Costly Than Thought

UCLA’s Lewis Center revised some of the estimates in its recent report comparing the costs of reducing greenhouse gas (GHG) emissions using California high-speed rail to those of bike, pedestrian, and local transit projects. The report’s authors found that high-speed rail is not as expensive as an emission reduction as they first thought.

Lewis_yellow_box_REVISED_copyThe update makes several adjustments to the analysis, which compared CAHSR to Los Angeles Metro’s Gold Line light rail and the Orange Line bus rapid transit route, as well as the bikeway that runs parallel to it. Originally, the report found high-speed rail to be a much less cost-effective way to reduce GHGs than any of the three urban transit options. While the new cost-benefit analysis for high-speed rail looks much better, it’s still not quite on par with local transit investments.

The new comparison of costs among high-speed rail, light rail, bus rapid transit, and the bikeway is shown in the table below. As discussed in our previous story on this report, the authors consider anything less than the current price of a metric tonne of emissions under the cap-and-trade system (about $11) a cost-effective way to reduce greenhouse gas emissions. The lower the cost, the greater the cost-effectiveness.

The UCLA authors’ new cost/benefit estimates.

The new estimate for CAHSR is -$335 per metric tonne, compared to the previous $361. Those estimates are the full public cost plus user savings (in the case of high-speed rail, that’s the price of a ticket compared to the cost of driving or flying). However, the bus rapid transit, light-rail, and bikeway are still more cost-effective at -$676, $1,233, and $3,569, respectively.

Here’s why the numbers changed:

  • The new analysis restates all costs in 2012 dollars, rather than year-of-expenditure values, as was done in the first analysis. This allows a simpler comparison of costs from year to year.
  • The new estimated capital costs to the public were lowered after CAHSR Authority’s 2012 Business Plan estimates of $9 billion in private capital and revenue from operations were incorporated.
  • The report now derives the average expected ticket price from expected revenues and annual passengers rather than using CAHSRA’s stated average fare, which applied only to trips between San Francisco and Los Angeles. These long-haul trips are only expected to make up roughly 1/3 of all high-speed rail trips.

The real story here may not be known until a completely new analysis incorporates estimates from CAHSRA’s 2014 Business Plan, which projects fewer people will shift from planes to trains and more will shift from cars to trains, with shorter trips comprising a greater share of the trips affected.

  • AJ

    Still irrelevant for policy making until it factors in associated land use impacts

  • Juan Matute

    Agreed that land use impacts are important. I’d love to have funding for that study.

  • 42apples

    I’m not sure what type of analysis this is. I’d like to see a comparison of total system costs, not necessarily user fees, which are somewhat arbitrary and heavily subsidized. I would rather look at costs as operating expenses, maintenance, and construction costs plus environmental costs (emissions, potential water impacts, land-use issues). And then benefits of taking cars off the road, possible health benefits (directly from cycling, indirectly from transit reducing local pollution).

  • Kenny Easwaran

    I think it would be useful to publicize the information on just the first half of this. Ignore the question of greenhouse gas emissions – what this analysis shows is that all of these investments end up saving users more money than they cost the taxpayers. Given that the public sentiment right now seems to think that CAHSR is an expensive boondoggle, noting that it will save more money than it costs should be an important point to make.

  • Juan Matute

    Kenny,

    With discounting of future costs and benefits, as is typically done in benefit-cost analysis, only the bike project fares particularly well, because the up-front costs are minimal. I don’t discount GHG reductions in the paper because it’s hard to make inter-generational wealth transfers to compensate future generations (the premise behind discounting) when the magnitude of climate impacts are so uncertain and there’s no mechanism to transfer payments to those who will be most impacted (and I cite the paper that makes this argument).

  • DrunkEngineer

    Kenny,
    You are not understanding the concept of Opportunity Cost. Even if CAHSR were to save users’ money, it is still taking funds from more cost-effective projects (like bike paths).

    Note also this revised estimate for CHSRA includes dubious assumptions about $9 billion in private investment and operating surplus.

  • ☼ Even better comparisons would be with 1) cars, of course, and 2) the air travel that CAHSR would be competing with the most.

  • Kenny Easwaran

    The general concept of opportunity cost is definitely an important one. But if the net cost of each of these things is negative, then shouldn’t we be able to pay for these things entirely with borrowing, in a way that doesn’t interfere with the ability to construct the others? In other words, when your cost is non-positive, there shouldn’t be any opportunity cost associated with it either.

    I suppose at some point the amount of borrowing gets large enough that the market for debt gets saturated. And the fact that these costs are only negative when you count averted user fees suggests that you’d need to do something to monetize that consumer savings while still maintaining that usage rate.

  • Shira

    This article is ridiculous. It’s basically saying it’s too expensive to fly to Asia so we should all just swim. Obviously, BRT, light-rail, and bikeways are more cost-effective, but they are not long distance options.

  • MaxUtil

    Sure, we “should” be able to do this, but that’s not what’s being discussed. The cap-n-trade program is spitting out funds that are supposed to be spent on reducing GHG emissions. The debate is how to spend those funds.

    There are a lot of considerations that should go in that decision. But at the end of the day, the current proposal is to spend a lot on the least cost effective means of reducing GHG and little to nothing on the means that is more than 10 times more effective.

  • MaxUtil

    No, that’s not what it is saying. It is saying that if you are going to invest funds specifically with the goal of reducing GHG emissions from transportation, different project will have different impacts on emissions per dollar spent. No one is saying that bikes are a replacement for planes and GHG’s are just as bad if they are releasing when doing a local trip as they are flying to China.

  • ArnoldPalmers

    DrunkEngineer,
    Your not drunk, but high or maybe not very smart. You do not understand the concept of comparing apples with apples or maybe a beer with other beers. Your comparison of the CAHSR to bike paths isn’t just dubious it’s preposterous.

    This blog is supposed to be about streets, yet it seems that the most common denominator by the commentators and bloggers is that it always boils down to bicycles and is not a very holistic viewpoint.

  • Juan Matute

    All GHG reductions come from mode shift to these projects from cars or air travel.

  • Kevin J

    Why is HSR being compared to local projects? The LA projects will reduce driving and cut pollution, and that’s great, let’s get a move on!

    But only HSR cuts the GHGs it takes to fly down there from the Bay Area. These are Apples and Oranges that address two different kinds of trips.

  • Kevin J

    Forgetting the projects that only help LA,

    What are the comparative costs and GHG reductions from expanding airports and highways instead of building HSR?

    None of the LA transit projects even connects to LAX, so there’s the GHGs from rental cars which can be eliminated with HSR going into downtown and connecting with four subway lines.

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