Oil shock may not rescue cities from traffic

Linking expensive gasoline with city-friendly transport.
Cartoon via Streetsblog and Robert Ariail / The State.

It is tempting for advocates of green transport (and some economists) to gloat about high oil prices. It is perfectly understandable to see some glee from critics of automobile dependence as rising fuel costs undermine the economics of places planned around cars and start doing the job of the eco-taxes that should have been in place already.

(For a comedy twist on wishful thinking and oil see this video of James Howard Kunstler on the Colbert Report)

But we need to be alert to dangers here too. Please don't assume that high fuel prices will rescue cities from traffic. Oil at $200 per barrel will not automatically bring about a livable streets renaissance.

Here are some dangers of escalating fuel prices if your focus is a less car-focused urban transport policy

• Rebound. Motorists may reduce fuel costs without reducing driving much. Sure, they are already driving less (at least in countries where the full price rise has been seen at petrol pumps). But in the longer term, more fuel-efficient vehicles may make driving cheap again, so that traffic starts increasing again. I heard Amory Lovins of the Rocky Mountains Institute speak in Singapore recently about 'hypercars'. If he is even 10% correct then driving could easily become cheap again via technological innovation, even if fuel stays expensive.
  
  
• Backlash. Motorist anger over high fuel prices might make politicians too frightened to follow through on important pricing reforms aimed at reducing real impacts of traffic (such as carbon taxes or such like, congestion pricing, pricing parking rationally, distance-weight charges for heavy vehicles, and shifting fixed costs such as insurance to 'pay-as-you-drive', etc). There have been fuel tax protests in the UK and several other European countries. Indian, Malaysian, Indonesian and Taiwanese (and soon Chinese?) motorists are currently furious after fuel subsidies were reduced and everyone fears knock-on inflation. Opposition politicians are making populist noises to take advantage of this (Anwar Ibrahim in Malaysia for example, and the far Left in India). Governments in these countries may take away the longer-term lesson that raising the cost of driving is always politically costly.
  
  
• Equity-based backlash. First, I want to be very clear that cheap fuel, and fuel subsidies, do NOT help the poor. They mainly help rich people. (See an interesting IHT take on subsidies here.) But there is no doubt that low-income households are less able to cope with a sudden jump in inflation. More generally, food inflation is certainly hurting low-income people (and food price rises are linked with oil prices to some extent). The urban geography of income is also relevant. In many cities in Asia, Latin America, Europe and Australia, the poorer households tend to be in the outer areas, while inner cities are gentrified (or gentrifying). In some cases, such as Australian cities, the low-income outer suburbs, such as western Sydney or far southeast Melbourne, are also the most car-dependent and are suffering most as petrol costs soar. Green transport and liveable streets champions can easily be (and often are) painted as elitist idealogues who care nothing for the suffering of 'ordinary people'. Ideally, governments should target direct assistance to the most vulnerable households in order to ease the impacts of price rises (as Indonesia is doing while cutting back its fuel subsidies). But that is difficult to organise. The temptation is to simply backtrack on getting the prices right.
  
  
• Public transport may not rise to the challenge. The financial situation of many public transport operators is being hit by higher fuel costs, just as they see passengers increasing. They may face other threats to revenue too if part of it comes from fuel taxes revenues (which are beginning to drop as less fuel is sold, and would drop even more if populist politicians reduce fuel tax). So many transit systems cannot easily rise to this opportunity without more public funds, which is a political problem obviously.
  
  
• Complacency. Advocates of transport reform might get lazy and ease off from pushing for changes that will make a more lasting difference to traffic and its impacts. The case for different urban transport priorities and liveable streets still needs to be made in their own right, and not just for the sake of saving fuel.
  

Is it all doom and gloom then? No. There are also opportunities from this oil price shock for those of us who hope for less car-dominated cities. But only if the right choices get made.

• Market opportunity for carsharing, bicycling. Some of the alternatives to solo driving are expanding as gasoline prices go up. I have seen various reports from many countries (mostly anecdotal so far) of increases in bicycle use, in car-sharing (car clubs in Britain) and ride-sharing ('car-sharing' to Brits). Each of these does better the more people use them (they reap network economies and club economies). Some of these improvements might last even if fuel prices were to drop again.
  
  
• Opportunity to reclaim street space. Reduced traffic (in the short-run, before rebound kicks in) might open space (physically and politically) which could be claimed for public transport, walking and non-motorised vehicles. For example, on-road bus priority or Bus Rapid Transit (BRT) systems might have a better chance for a while. We may be able to lock in a redistribution of street space. The benefits of this could then last even if traffic later rebounds.
  
  
• Revolutionizing the whole debate. Finally, if this oil shock becomes a pattern-changing moment, which reveals the folly of past assumptions, and provokes real soul searching, then wonderful opportunities may open up. In other words, a fuel-price crisis might prompt some dramatic rethinking and constructive policy change away from business-as-usual. The 1973 oil shock did this in European countries, especially the Netherlands, Germany and Sweden, whose transport policies then became much less car-oriented in their assumptions. Some cities and some countries may respond in a similar way now.
  
  

Any ideas on how to make sure we reap the opportunities and avoid the dangers from high oil prices?