The $300 Million Congestion Pricing Error

 

This is going to sound like sour grapes, I know. But it’s not. Honest. It’s a real policy beef – and one that I’ve had for a long time.

I own a Prius. But I don’t own an access sticker that gets me into the carpool lanes. That’s because I bought my Prius in December of 2006 – the exact time when the State of California doled out the last of 85,000 “Clean Air Vehicle Stickers.”

Under AB 2628, the 2004 bill sponsored by then-Assemblywoman Fran Pavley (D-Agoura Hills), the stickers allow owners of high-mileage vehicles – mostly hybrids – to drive in high-occupancy vehicle (HOV) lanes.

Even before I found myself crawling along in the regular lanes in my unstickered Prius, I thought this was a pretty dumb idea. Over time, it’s proven dumber and dumber. Now, unfortunately, it’s turned into a congestion pricing system, except the resulting revenue flows not to new transportation investments that benefit all of us, but to Prius owners clever enough to buy their cars before I did.

The goal, apparently, was to encourage more people to buy hybrids, which use less gas and therefore emit fewer greenhouse gases. That’s a worthy goal, but it’s not the reason HOV lanes exist. The reason we have HOV lanes is to increase transportation capacity – and maybe reduce congestion and air pollution – by encouraging people to carpool or take buses instead of driving alone. Every time two or three people drive in a car instead of one, you’ve increased the capacity of the transportation system at no cost.

Allowing single-occupancy hybrids into the carpool lane undermines this whole policy goal. Presumably there’s a modest improvement in overall energy usage and greenhouse gas emissions – if the 85,000 drivers wouldn’t have bought hybrids otherwise, which I doubt. But I can’t figure out what other benefit there might be. Drive-alones add cars to the carpool lane no matter what kind of car they drive; but, unlike carpoolers, they don’t add capacity to the system. (Something like 40% of the state’s carpool lanes are already at capacity.) And the Internet is flooded with stories about how the granny-like habits of Prius drivers in search of high gas mileage slow down the carpool lane even more and therefore reduce everybody else’s motivation to carpool.

But here’s the most perverse part: We’ve inadvertently created congestion pricing with this policy – and we’re not getting any transportation investment out of it.

Congestion pricing is a policy idea that’s been kicking around for a while now. The idea is that people will pay money to drive faster on the freeway during periods of congestion. And the money they pay can be used to build more lanes or otherwise enhance transportation capacity. It’s an idea worth thinking about, but except for the toll lanes on the 91 Freeway and the high-occupancy toll lanes on I-15 in San Diego County, it’s not a policy that anybody in California has actually adopted.

The “Clean Air Sticker” policy has proven that a congestion pricing policy would work. Why? Because a used hybrid with the stickers is worth $4,000 more than a used hybrid without one.

In other words, the State of California gave away to owners of 85,000 hybrid cars a carpool access sticker worth $4,000. That value – somewhere around $300 million – is now in the hands of hybrid car owners. It is not in the hands of state and regional transportation agencies that could use it for other transportation improvements.

With gas at close to $4 a gallon, I don’t think anybody needs a $2,000 to $4,000 incentive to by a hybrid. In fact, I think the success of the Prius – a very sensible car in spite of its cache – suggests that Californians never needed such an incentive.

When our state or our regional transportation agencies build an HOV lane, they are creating valuable real estate in the transportation system. The wisest use of this investment is to use it to increase our overall transportation capacity.

We should do that either (1) by giving space in the carpool lane away for free to carpoolers who increase transportation capacity at no cost to the public, or else (2) by selling that space to drive-alones willing to pay the price, and using that money for other transportation investments.

The one thing we should not be doing is giving it away for free to drive-alones based on the kind of car they drive.

Sometimes we need to use our heads, not our hearts, in crafting environmental policy.

– Bill Fulton