Economix blog: Is High-Speed Rail a good investment?

Vacation means scoping out a new city, beautiful mountains and extra time to read all the news I’ve missed. Because of this great free time, I caught a four-part series on the NYT Economix blog by Edward Glaeser about the economic calculus of a high-speed rail investment (thanks Transportationist). The second part, (the first is really an intro, but a good read) is an abbreviated cost-benefit analysis of a hypothetical 240-mile line between Dallas and Houston.

The bottom line? Bad news for HSR in his estimation. Costs are six times greater than benefits. Even with a ridership level equivalent to the Northeast corridor, costs are three times greater. Glaeser argues that this math is tough to beat, and I would agree given the limited number of benefits he is analyzing. What he labels “passenger benefits” only include monetary ones, not congestion and not environmental benefits, which he promises to tackle next time.

I took a stab at quantifying the greenhouse gas pollution savings.  Read on to find out if this benefit can make up the difference.

Here’s my initial figuring on the carbon savings portion. If you assume something like a carbon tax of $1.31 per gallon of jet fuel to internalize the cost of CO2 emissions, and you assume 0.5 miles per gallon over the 240-mile trip, you get 480 gallons or $628 additional cost per one-way flight. On a full plane, that works out to $5.11 per passenger trip of additional costs. To double check my math, I plugged the Dallas to Houston flight into the Terrapass flight offset calculator and got $5.95 as the cost to offset the CO2 emissions.

The additional cost for a similar tax on diesel fuel for the trains is harder to estimate since I’m unsure what kind of fuel efficiency the train will achieve.  However, it seems likely that the carbon cost for the plane ride will be significantly greater than that of the train.

So does this one additional area of environmental savings make up the difference between Glaeser’s anticipated benefits and costs? Not really.  With the hypothetical carbon tax, benefits are $73/trip (rather than $68) which equals $109 million for 1.5 million trips (Glaeser’s estimated ridership).  Costs are still 5.9 times the amount of benefits.

But fear not, rail lovers, some questions remain: how will Glaeser calculate these and other environmental benefits?  Will he include costs such as the expansion of airports to accomodate demand anywhere in the calculation?  What kinds of congestion effects will be included?  And last but not least, how can we possibly calculate a high-speed networks contribution towards a city-wide land use pattern that reduces automobile dominance of the transportation system?

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