How California's High-Speed Rail Pays For Itself

One development in my home state of California that caught my eye while I was living in New York for a few years was voters’ approval in 2008 of nearly $10 billion in bonds to build a high-speed rail network. In the face of the worst economic outlook in decades, Californians (52 percent of them anyway) saw that issuing debt for the project was a worthy investment in clean air, reduced emissions, less traffic, and better health outcomes for the state.

Nearly two years later, a new report is out, from the Institute of Transportation Studies at UC-Irvine, detailing some of the new rail network’s attributes. Among the findings were that a train trip will produce twenty percent of the emissions, per passenger, of a car making the same journey, and ten percent compared to commercial aircraft—while creating 320,000 permanent new jobs.

Although the rail authority has been beset by problems resulting from poor management, the report demonstrated clear benefits from the project, which is to be powered 100 percent by renewable energy.

But opponents of investment in clean energy never let the facts get in the way of their argument, and comments from the Howard Jarvis Taxpayers Association (the same group that led the gutting public education funding in the state, with predictable results) showed this time would be no exception.

“The fare box revenue won’t cover a fraction of the operating costs,” executive director John Coupal told California Watch, a nonprofit website of investigative journalism.

So we shouldn’t have clean transportation because the public might have to pay for some of it, is what he’s saying. This reasoning is typical of so-called conservatives’ arguments against investment in public transportation and renewable energy: It’s a dishonest accounting. The economic benefits of projects like the California high-speed rail network don’t end at the bottom line of the projects themselves.

Each year, 18,000 Californians die prematurely due to poor air quality. Aside from the fact that this, you know, kind of sucks for those people, the deaths create huge additional burdens on the health care system. These costs are paid by everyone else in the form of higher health insurance premiums and higher taxes to fund government health programs like Medicare. Moreover, people who get sick and miss work because of foul air cost their employers money, which means less corporate tax revenue for the state, and they often aren’t earning money on sick days, generating yet more costs. Apart from health, much of the time people spend stuck in traffic amounts to lost productivity, lowering GDP.

So even if you don’t give a damn about people’s health; even if you don’t care that, since the brunt of the effects of global climate change will be felt in the poorest parts of the world, emissions caused by our luxurious living standard create problems for about billion people living on a dollar a day; even if all you care about is money, which is the sense I get from a lot of opponents of clean energy investment, these investments still make sense. The opponents don’t even know how to argue their own point—we need to save money—effectively.

It’s called positive externality, and it’s the flip side of what makes pollution so difficult to combat. In the case of coal-fired power generators, oil companies, and any other emitters (that means you and me), the costs of the pollution aren’t borne by the polluters; they’re paid for instead by people breathing smog, suffering the effects of global climate change, and losing the many, tangible, and accountable benefits of healthy ecosystems. That’s negative externality, and it’s what cap-and-trade climate policies (and, more directly, a carbon tax) seeks to remedy.

In this instance, the benefits of the rail network don’t all go to it per se in the form of Mr. Coupal’s all-important fare box revenue. They’re felt, too, by thousands of kids who won’t get asthma thanks to the auto traffic the trains will displace; by the dirt farmers in the Sudan who won’t be quite as screwed by drought as they would be if the rail passengers were driving or flying instead; and by the economy of California and the US, which will be more productive and generate higher tax revenues.

In Europe and Japan, they realize that spending public funds on effective rail transportation pays the public back in other ways. I’m glad to see that California, and the scientists at UC-Irvine, understand this too.

Photo credit: Eisenbahner via Flickr