Time to Bite the Bullet and Kill the Bullet Train

The potential environmental benefits of the bullet train cannot justify its exorbitant costs.

The hits just keep on coming for the California bullet train, which is supposed to run between Los Angeles and San Francisco. First, the estimated completion cost has ballooned to over $77 billion and there is no viable plan to raise this money. Second, to avoid a higher price tag and political confrontation, the train will share slower-speed tracks in various suburban and urban areas, making it more “reasonably fast rail” than bullet train (and undermining many of its purported benefits). Despite the massive cost increases and speed reductions, the Governor continues to defend the bullet train on infrastructure and environmental grounds. Indeed, some of the required funding for the train could come from fees collected through the “cap and trade” program designed to reduce greenhouse gas emissions.

Given the potential funding from the cap and trade program, an obvious question arises: “Is the cost of the bullet train justified on environmental grounds?” The answer is a resounding “no.”  Indeed, building the bullet train does not even withstand a preliminary analysis of alternatives.

To understand why the bullet train is such a waste of money that no environmentalist should support, we need to estimate current vehicular greenhouse gas emissions in the transportation corridor the bullet train would serve. (The proponents of the train do not believe many airline passengers will switch to high-speed rail; most train riders will be former drivers). Remarkably, there is no precise estimate of how many cars drive between Los Angeles and San Francisco each day. For our baseline analysis, we will assume that there are 10,000 drivers that would forego the long drive each day and take the bullet train. If each car would travel 380 miles at 24 mpg, it would burn 15.83 gallons of gas and release roughly 316.6 lbs of C02 (the number would be a bit lower if the gas contained ethanol, but using 20 lbs of C02 per gallon of gas makes the math easier). The 10,000 cars on the road would thus release 3.166 million lbs of C02 each day and 1.156 billion lbs of C02 each year. To complete our analysis, we will assume there are 80,000 commuters who drive an average of 120 miles each day who would forego their commutes and ride the bullet train. If each car would average 21.5 mpg in commuter traffic, the cars would release 2.320 billion lbs of C02 each year. With these assumptions (which are consistent with the most optimistic ridership predictions in the bullet train business plan), and further assuming the bullet train would produce zero emissions (which is highly improbable for several decades, if ever), it would save an impressive-sounding 3.476 billion lbs of C02 a year at a price of $.44/lb of C02.  (To keep things simple, we assume a 50-year life cycle for the bullet train at an initial investment cost of $77 billion).

But far more cost-effective C02 reductions can be achieved in the passenger vehicle sector. Consider the following 2 potential policy changes and their impacts on greenhouse gas emissions:

1. The State provides a $40 tax credit to each driver who buys a gauge and pump and certifies every two weeks that she is maintaining optimal tire pressure. For each participating driver, this would increase fuel economy by roughly 1%. If we assume that 8.7 million of California’s 26.2 million drivers would take advantage of this tax credit, each driver would reduce her annual C02 emissions by 116 lbs (13,500 miles/year ÷ 21.5 mpg x 20 lbs vs. 13,500 ÷ 21.7 x 20 lbs). The yearly C02 savings from the tax credit would be 1.009 billion lbs at a price of $.09/lb of Co2 (We assume 4-year lifespan for pump and gauge with a total investment of $348 million every 4 years).

2. The State provides a $7,500 rebate check for each person who buys a car that achieves a combined 43 mpg (double the current vehicle average). The rebate program is capped at $10 billion – roughly the amount of the bond funding authorized for the bullet train. If we assume the rebate funding is fully consumed, that would mean that approximately 1.333 million drivers would be reducing their C02 emissions by half, saving a total of 8.372 billion lbs of C02 each year at a price of $.17/lb of Co2 (We assume the average new car lasts 7 years and the program is renewed every 7 years).

Of course, we could build a more complex model for assessing the environmental benefits of the bullet train. We could argue that the bullet train will reduce congestion and thus improve fuel economy and reduce emissions for the cars remaining on the roads. And it is possible that our passenger volume numbers will ultimately prove to be too low. But such a model would then need to include the actual emissions produced by the bullet train (or its power source), the emissions associated with the construction of the rail line itself, the impact on gas tax revenues, changes in baseline driving resulting from increasing MPG and adoption of electric vehicles (and possible mandates) and the fact that the train will likely require operating subsidies pushing its true cost well above $77 billion). In light of these considerations, no matter how elaborate the model, the bullet train simply cannot withstand even preliminary scrutiny as an environmental project designed to reduce C02 emissions in the transportation sector.

Moreover, it is worth noting that there are many other approaches, beyond those considered above, the State could take to reduce passenger vehicle greenhouse gas emissions. Indeed, even without a tax credit or vehicle purchase rebate, most people have a strong economic incentive to increase their gas mileage – they could save hundreds of dollars a year by simply driving smarter. The State could simply launch a massive public education campaign to Nudge people to act in their own financial self-interest when driving. This would cost just a fraction of the least expensive policy idea listed above and produce significant greenhouse gas reductions in the passenger vehicle sector.

The bottom line is this: The bullet train is not a cost-effective method for reducing C02 emissions in the automotive sector. At a time when the State lacks sufficient funding for higher education and necessary infrastructure and faces massive pension funding shortfalls, the bullet train is impossible to justify on any basis, and the environmental arguments for the train are completely misguided. If the legislature really cares about the environment and using taxpayer dollars wisely, it should take the necessary steps to terminate the project (except for any useful commuter rail line modernization work underway) and implement far more cost-effective policies for reducing greenhouse gas emissions in the automotive sector.

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