Revenue trumps environment

 Tory writes*

High-Occupancy vehicle (HOV) lanes have been constructed on many U.S. highways throughout recent decades. These lanes were originally open to public transport and vehicles with two or more passengers. The intention was to provide these vehicles a less congested lane to travel in and thus, reduce travel time in comparison to the ‘non-HOV’ lanes. Additionally, researchers have pointed towards alternative aims of these lanes with broader implications. Schijns and Eng (2006) [pdf] proposed that HOV initiatives, by promoting carpooling, are “increasing the person-carrying capacity of the roadway, reducing per-capita emissions and energy consumption, and promoting a more sustainable urban transport situation”. The intentions of HOV lanes described above highlights the all-encompassing nature of this policy initiative. These lanes are attempting to tackle congestion and travel time issues, while also trying to drive behavior change in an ‘environmentally friendly’ direction. On the outside, approaching policies with multiple aims seems like it could be beneficial across a wide variety of issues. However, in attempting to ‘do it all’ this policy initiative has, in many instances, failed in meeting any of the aims it set out to achieve.

Take, for example, the HOV lanes in California. This state-led initiative was two-pronged in that it aimed to reduce traffic congestion and improve air quality. However, as studies using census data have shown, carpooling continues to decrease in popularity. Moreover, as Schijns and Eng (2006) concluded in their study, there has been no HOV implementation whereby a transformation of single-occupant drivers into carpoolers has made a significant impact on congestion issues. In response to this policy failure, the State of California has allowed single-occupant drivers to use these lanes, for a price. This simple change in policy undermines the environmental intentions of the original designing of the HOV lanes. The ‘pay-for-access’ adjustment also signifies the social value of HOV lanes. Faster travel time, even if one must pay for it, is more attractive than altering one’s transport to be more ‘sustainable’. Moreover, this seemingly minor adjustment only addresses one of the aims it set out to achieve, namely reducing travel time. However, this was exclusionary in nature as only those who could afford the fee were able to take advantage of the lanes. If the aim of reducing emissions was of focus, the State would need to address deeper issues rooted in a lack of infrastructure for public transportation and changing the norms of behavior surrounding what transportation looks like. In this instance, reducing emissions seemed to take a back-seat to reducing travel time for some individuals.

So, has the State of California addressed this seemingly forgotten environmental aspect of this initiative? Why would they? In 2017, San Francisco Bay Area governments collected over 9 million dollars from HOV lanes. It would be difficult to imagine the State having any incentive to change a policy that is providing a source of revenue. From this perspective, the pay-for-access drivers and the government are benefitting off a policy at the expense of environmental action.

Bottom Line: HOV lanes were implemented with the aims of decreasing congestion and reducing emissions. However, the ‘pay-for-access’ adjustment to the policy undermined the environmental aspect of this initiative. This has resulted in revenue for the government at the expense of the planet.


* Please help my Environmental Economics students by commenting on unclear analysis, alternative perspectives, better data sources, or maybe just saying something nice :).

Author: David Zetland

I'm a political-economist from California who now lives in Amsterdam.

2 thoughts on “Revenue trumps environment”

  1. Interesting idea, especially because I would never expect that building MORE roads could actually benefit the environment (generally more roads means less space for nature). I think this is one of those goods with high price elasticity of demand, as ‘normal’ roads can replace the HOV lanes. Hence, would it be a solution to make these lanes more expensive for cars with only one passenger (simple supply-demand curve indicates that people would use it more sparsely)? This might be a middle way: governments do not have to loose out on all revenue, but environmental aspects are taken into account.

    1. Hey Jasmijn! I agree with you that these HOV lanes have a high elasticity of demand as drivers always have the other option of using the normal lanes. I also think your solution could be successful. Increasing the price for single passenger cars would probably decrease the amount of drivers opting to pay for these lanes. However, I think that if a real focus on reducing emissions and improving air quality is desired, more has to be done besides raising prices. Policies and regulations need to target the norms around commuting and driving in the U.S. to actually encourage a change in behavior.

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