Sunday, January 31, 2010

Is High-Speed Rail Good Stimulus?

That depends on your criterion for good stimulus. 

If the only requirement is that the government write checks to people who are nominally employed, then building high-speed rail is great - but so is paying people to dig ditches and fill them up.

If the requirement is also that stimulus projects pass a standard cost-benefit test, then high-speed rail does not appear to measure up:

In the face of high energy prices and concerns about global warming, environmentalists and planners offer high-speed rail as an environmentally friendly alternative to driving and air travel. California, Florida, the Midwest, and other parts of the country are actively considering specific high-speed rail plans.

Close scrutiny of these plans reveals that they do not live up to the hype. As attractive as 110-to 220-mile-per-hour trains might sound, even the most optimistic forecasts predict they will take few cars off the road. At best, they will replace for profit private commuter airlines with heavily subsidized public rail systems that are likely to require continued subsidies far into the future.

Nor are high-speed rail lines particularly environmentally friendly. Planners have predicted that a proposed line in Florida would use more energy and emit more of some pollutants than all of the cars it would take off the road. California planners forecast that high-speed rail would reduce pollution and greenhouse gas emissions by a mere 0.7 to 1.5 percent—but only if ridership reached the high end of projected levels. Lower ridership would nullify energy savings and pollution reductions.
I have nothing against government infrastructure spending in principle.  But since interest groups like construction companies and unions have a strong incentive to oversell the benefits of these projects, while the green lobby has a religious hatred of cars, we should not be surprised if dispassionate analyses finds that the cost-benefit case for these projects is lacking.

5 comments:

FDominicus said...

I'm not fully sure about this. The US have quite the distances to make this even highly profitable. I'd think everythign below 1000 km is much faster to be done by train.
I don't know how "tight" the schedules are in the US. But if you have to be at som airport 2 hours before take of. You may have driven around 400 miles in that time by train.

I'm also not sure about the impact on "less" cars. At least here in Germany the routes from let's say Karlsruhe->Paris (that are around 600 km) is most comfortable and fast done by train. A comparable distance would be LA to SF. Well agreed you have the troubles with earthquakes, but a really fast train from SF to LA could be a "gold" mine... another intersting line could be from Las Vegas to LA and/or SF to Las Vega.

Stephen MacLean said...

An interesting appraisal of high-speed rail and some of its disadvantages that may be overshadowed by perceived benefits; drawbacks such as subsidised competition with private enterprise, low demand, and questionable reductions in pollutants.

More intriguing for this Tory was reading a libertarian write that he has 'nothing against government infrastructure spending in principle.'

It only supports my thesis that traditional Tories and classical liberals/libertarians have more in common (and more room for collaboration) than my socialist-leaning colleagues allege.

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