The tragedy of urban roads: saving cities from choking, calling on citizens to combat climate change.

AuthorIaione, Christian
  1. Roads as "Common Goods": The Tragedy of Urban Roads II. A Tragic and Costly Ride III. The Underlying Causes of Road Congestion A. Americans Drive Too Much Because They Do Not Pay Enough! B. I Love My Backyard. Let's Sprawl C. The Financing Structure of U.S. Transportation Policies and Funding: A Public Choice Tale IV. The Regulatory Toolbox A. Price Versus Quantities as Applied to Road Congestion 1. Efficiency 2. Equity and Political Economy B. A Case-Study Analysis 1. Price Instruments: Congestion Pricing Schemes a. London b. Singapore c. New York d. Milan 2. Quantity Instruments a. Tradable Permits i. Singapore Vehicle Ownership Quota Scheme ii. Rome Driving Permits Scheme b. Tradable Mobility Credits i. Car Cash-Out Programs in the United States ii. Genoa V. Law, Economics and the Policy of Urban Congestion A. Land Use Tools B. Public Transportation Policies C. The E.U. Integrated Approach Conclusion I. ROADS AS "COMMON GOODS": THE TRAGEDY OF URBAN ROADS

    Streets and plazas are, by definition, public space. Public space is a locus of meeting, both physical and virtual, of individual interests that were formed within private spaces.

    Streets and plazas therefore represent a "common good" exposed like any other common good to the Tragedy of the Commons. (1) In 1968, Garrett Hardin contended that if everybody deems unlimited her or his right to use a common good, its unrestricted demand will ultimately exhaust the finite resource through over-exploitation. Indeed, in tragedies of the commons, users over-exploit a resource and impose mutual externalities upon each other. Tragedies of the commons therefore fall within the broader class of large-group externality problems. The characteristic that differentiates tragedies of the commons from the rest of the class is that self-destructiveness is absent in other large-group externality problems. Pareto superior (2) policy moves have to be different for tragedies of the commons from those undertaken in other large-group externality problems. Governmental intervention or regulation is always needed in tragedies of the commons to save the resource users from themselves and their mutually-imposed harms.

    Many citizens in western countries believe that they hold an unlimited right to invade streets with their automobiles. Automobiles have taken over public spaces. In turn, these spaces are not only deteriorating from an environmental point of view, but are losing their original function of loci of life and meeting of humans (which is problematic from a social point of view). The vanishing of public spaces is leading to the vanishing of many aspects of urban life: cohabitation, encounters, and the unplanned and uninstitutionalized confrontation of diverse lifestyles, habits, cultures, and stories. These aspects of urban life have historically made cities the preferred place for cultural development and innovation. (3) Alternatively, the automobile projects the characteristics of private life by closing people in steel bodies. (4)

    Traffic congestion represents the perfect showcase for the tragedy of the commons, a collective action problem in which a resource held in common-urban streets and roads--is subject to overuse and degradation. (5) All users undertake and benefit from driving their own vehicles, congesting urban streets and releasing greenhouse gases ("GHG"s), but bear little of the congestion-related and climate-related costs of their own driving. They have little or no incentive to take into account these externalities in making the decision to drive. (6) Traffic congestion illustrates why mutuality entails the persistence of an externality. All drivers face the same decision environment. Also, non-coercive solutions are not viable because of the high transaction costs. Negotiations among commuters are in fact impossible. Finally, traffic congestion illustrates the effects of over-utilization of a resource (e.g., roads) that is rivalrous in consumption. Like other tragedies of the commons, resource users inflict losses upon themselves as a group in terms of the ability to use the resource, by lengthening commute times and degrading the transportation resource. Externalities are also imposed upon non-users, the air-breathing public, in the form of pollution.

    The traditional solution to traffic congestion, typically driven by frustrated drivers rather than advocates against air pollution, has been the expansion of roadway capacity. (7) This has proven to be a self-defeating strategy. The expansion of roadway capacity reduces transportation costs and generates new demands by new users. For example, new roadway capacity provides an incentive for new residential development. (8) This solution ignores the second-order effects, those which are easily seen once one appreciates the nature of the externality. For example, in the tragedy of fishing, even if it were physically possible to respond to over-fishing by stocking the fishery with more fish, this would only attract more fishermen to come in and participate in the tragedy. (9)

    Garrett Hardin, in his seminal article Tragedy of the Commons, suggested two main solutions to commons problems: privatization and regulation. (10) Hardin categorized these as the "enclosure" of commons. (11) He noted that historically the problem has been first addressed through the use of all resources as commons (open and unregulated access to all) and then policymakers' attention has been shifted to systems in which commons are "enclosed" and subject to differing methods of regulated use (access prohibited or controlled). (12) Hardin's solutions to address the tragedy of the commons (i.e. privatization and regulation) were later updated and completed by a third solution: common ownership. (13)

    Public finance theory has offered a similar explanation of the urban congestion phenomenon. (14) It has argued that with congested roads

    [t]he use of the available space is distinctly rival and exclusion (the auctioning off or sale of the available space) would be efficient and should be applied. The reason is that use of crowded space would then go to those who value it most and who are willing to offer the highest price. (15) However, this theory also contended that "such exclusion would be impossible or too costly to be administered" and therefore concluded that such "exclusion should but cannot be applied" at least "until techniques can be found to apply exclusion." (16) In our current environment, the difficulty of applying exclusions can be overcome and it is no longer possible to say that roads are an example of a public good that causes a market failure and justifies public provision. Techniques to record the passage of vehicles through intersections and permit the imposition of corresponding charges have been developed to allow exclusion from, or limit the use of, crowded urban streets. (17)

    This Article argues that the best response to the tragedy of road congestion has to rely on market-based regulatory techniques and public policies aimed at controlling the demand-side of transportation congestion. Among market-based regulatory techniques, economists seem to favor price-based instruments (i.e. taxes and subsidies) over quantity-based instruments (i.e. cap-and-trade schemes). This Article will argue instead that quantity instruments, such as tradable permits of road usage and real estate development, can better internalize all the externalities that road congestion produces. This Article also advances the idea that quantity instruments are more successful tools in addressing urban congestion for four reasons: (1) they respond better to equity concerns; (2) they are therefore more politically viable; (3) they are more likely to be well designed; and (4) they are able to represent a catch-all strategy for externalities produced by congestion.

    Part II of this Article illustrates the costs that congestion imposes on society or, to use the preferred language of economists, the negative externalities that road congestion produces. Part III sheds light on the underlying causes of urban congestion. Part IV enumerates regulatory tools that are available to address the negative externalities of urban congestion and proposes a comparative analysis of the different strategies that have been implemented to address this problem throughout the world. Part V outlines possible policy options that should complement the regulatory framework to enhance the chances of success of the chosen regulatory scheme. Finally, the last section concludes by stressing the need for further differentiation and experimentation in order to shape a new understanding in the use and management of the "commons" and advocates for a bottom-up regulatory strategy to address climate change and global warming, a strategy centered upon the regulation of individual behavior at the urban level.

  2. A TRAGIC AND COSTLY RIDE

    To better understand the nature of the problem we must first turn to the analysis of the factors that have contributed to the increasing importance of urban congestion. Americans and almost every developed population drive too much. This does not imply a moral judgment--it is an economic argument. (18) Dubner and Levitt exemplify the externalities produced by congestion by explaining that:

    [T]he behavior of Person A (we'll call him Arthur) damages the welfare of Person Z (Zelda), but Zelda has no control over Arthur's actions. If Arthur feels like driving an extra 50 miles today, he doesn't need to ask Zelda; he just hops in the car and goes. And because Arthur doesn't pay the true costs of his driving, he drives too much. What are the negative externalities of driving? To name just three: congestion, carbon emissions and traffic accidents. Every time Arthur gets in a car, it becomes more likely that Zelda--and millions of others--will suffer in each of those areas. (19) Urban congestion is primarily an environmental problem. Automobiles are currently...

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