If The Price Of Gasoline Increases, What Will Be The Impact In The Market For Public Transportation?

Author: Dr. Jean-Paul Rodrigue

Transportation systems, from infrastructures to vehicle operations, have environmental impacts ranging from noise, the emission of pollutants to climate change.

1. The Issue of Transport and the Environment

The issue of transportation and the environment is paradoxical since transportation conveys substantial socioeconomic benefits, but at the same time, transportation is impacting environmental systems. On one side, transportation activities support increasing mobility demands for passengers and freight, while on the other, transport activities are associated with environmental impacts. Further, environmental conditions impact transportation systems in terms of operating conditions and infrastructure requirements such as construction and maintenance (see Transportation and Space for a review of these constraints).

The growth of passenger and freight mobility has expanded the role of transportation as a source of emission of pollutants. Total emissions are generally a function of the emission factor of each transport mode than their level of activity, which implies a variety of impacts on the environment. These impacts fall within three categories:

Direct impacts. The immediate consequence of transport activities on the environment where the cause and effect relationship are generally clear and well understood. For instance, noise and carbon monoxide emissions are known to have direct harmful effects.
Indirect impacts. The secondary (or tertiary) effects of transport activities on environmental systems. They are often of a higher consequence than direct impacts, but the involved relationships are often misunderstood and more challenging to establish. For instance, particulates, which are mostly the outcome of incomplete combustion in an internal combustion engine, are indirectly linked with respiratory and cardiovascular problems since they contribute, among other factors, to such conditions.
Cumulative impacts. The additive, multiplicative or synergetic consequences of transport activities. They consider the varied effects of direct and indirect impacts on an ecosystem, which are often unpredictable. Climate change, with complex causes and consequences, is the cumulative impact of several natural and anthropogenic factors, in which transportation plays a role. The share of transportation in global CO2 emissions is increasing. 22% of global CO2 emissions are attributed to the transport sector, with this share is around 25% for advanced economies such as the United States.

The complexities of the impacts have led to much controversy in environmental policy, the role of transportation, and mitigation strategies. This is made even more complex by the fact that priorities between environmental and economic considerations shift in time, which can have an impact on public policy. The transportation sector is often subsidized, especially through the construction and maintenance of road infrastructure, which tends to be free of access. Sometimes, public stakes in transport modes, terminals, and infrastructure can be at odds with environmental issues. If the owner and the regulator are the same (different branches of the government), then there is a risk that regulations will not be effectively complied to.

Total costs incurred by transportation activities, notably environmental damage, are generally not fully assumed by the users. The lack of consideration of the real costs of transportation could explain several environmental problems. Yet, a complex hierarchy of costs is involved, ranging from internal (mostly operations), compliance (abiding by regulations), contingent (risk of an event such as a spill) to external (assumed by the society). For instance, external costs account on average for more than 30% of the estimated automobile ownership and operating costs. If environmental costs are not included in this appraisal, the usage of the car is consequently subsidized by society, and costs accumulate as environmental pollution. This requires due consideration as the number of vehicles, especially automobiles, is steadily increasing.

2. The Transport – Environment Link

The relationships between transport and the environment are multidimensional. Some aspects are unknown, and some new findings may lead to changes in environmental policies. Historically, transportation was associated with very few negative environmental impacts because of the modes used and the low mobility levels. For instance, the construction of large navies composed of sailships was responsible for a level of deforestation in Western Europe and North America from the 16th to the 19th centuries. Urbanization in the 19th century and the reliance on horses created problems concerning the disposal of manure. Further, industrialization and the development of steam engines lead to pollution (e.g. soot) near ports and rail yards. Still, these issues remained marginal and localized.

However, it is only in the 20th century that a comprehensive perspective about the links between transportation and the environment emerged, particularly with the massive diffusion of transportation modes such as the automobile and the airplane. At the same time, manufacturing and marketing concepts such as planned obsolescence incited the design of modes such as the automobile and products (that are transported) that can continuously be replaced. The 1960s and 1970s were crucial decades in the realization of the negative environmental impacts of human activities and the need for regulations.

From an infrastructure perspective, the first comprehensive environmental regulation, the National Environmental Policy Act (NEPA), was set in 1970 and required all federal agencies of the US government to make environmental impact assessments of their actions. Since an agency such as the Department of Transportation is an important provider and manager of transportation infrastructure, this legislation had substantial impacts on how transportation is assessed to be linked with environmental issues. One clear consequence was the growth in the length and the complexity of approving transport infrastructure projects to ensure they meet environmental standards. Opponents of a project could also use the regulatory framework to delay or even cancel its construction and, on occasion, change its design parameters (e.g. size). An unintended consequence was that the complexity of environmental regulations tends to impair innovations and incite current providers to keep existing infrastructure and facilities for the concern to trigger an uncertain environmental review with a new project. In time, this slowed down the development of transport infrastructure and substantially increased their costs.

From an operational perspective, the Clean Air Act of 1970 set clear air quality standards and expectations for both stationary (e.g. a power plant) and mobile (e.g. an automobile) sources of air pollutants. For transportation, it immediately set emissions standards for a list of acknowledged pollutants such as carbon dioxide, volatile organic compounds, and nitrogen oxide. The outcome was a rapid decline in air pollutant emissions by the transportation sector through better engine technology. The Clean Water Act of 1977 provided a similar regulatory environment concerning water pollution and the ability to build infrastructures over wetlands.

The 1990s were characterized by a realization of global environmental issues, epitomized by the growing concerns between anthropogenic effects and climate change. Transportation also became an important dimension of the concept of sustainability, which has become a core focus, ranging from vehicle emissions to green supply chain management practices. These developments require a deep understanding of the reciprocal influence between the physical environment and transport infrastructures, and yet this understanding is often lacking. The main factors considered in the physical environment are geographical location, topography, geological structure, climate, hydrology, soil, natural vegetation, and animal life.

The environmental dimensions of transportation are related to the causes, the activities, the outputs, and the results of transport systems. Establishing linkages between environmental dimensions is a difficult undertaking. For instance, to what extent carbon dioxide emissions are linked to land use patterns? Furthermore, transportation is embedded in environmental cycles, notably over the carbon cycle where carbon flows from one element of the biosphere, like the atmosphere, to another like the ecosphere, where it can be accumulated (permanently or temporarily) or passed on. The relationships between transport and the environment are also complicated by two observations:

Level of contribution. Transport activities contribute among other anthropogenic and natural causes, directly, indirectly, and cumulatively to environmental problems. In some cases, they may be a dominant factor, while in others, their role is marginal and challenging to establish.
Scale of impact. Transport activities contribute at different geographical scales to environmental problems, ranging from local (noise and CO emissions) to global (climate change), not forgetting continental / national/regional problems (smog and acid rain).

Establishing environmental policies for transportation thus must take account of the level of contribution and the geographical scale, otherwise, some policies may just move the problems elsewhere and have unintended consequences. A noted example is environmental policies in advanced economies inciting the relocation of some activities with high environmental externalities (e.g. steel making) in developing economies. This transfers the problem from one location to another. Still, such as transfer usually involves new equipment and technologies that are usually having a lower environmental impact. Even if an administrative division (municipality, county, state) has adequate environmental enforcement policies, the geographical scale of an environmental impact (notably air pollutants) goes beyond established jurisdictions. This has become salient in the disposal of waste such as electronic goods that are transferred to developing economies with lower environmental regulations to be disposed of or recycled.

The structure of the transport network, the modes used, and traffic levels are the main factors of the environmental impact of transportation. Networks influence the spatial distribution of emissions (e.g. centralized versus diffuse networks), while modes relate to the nature of the emissions and the traffic to the intensity of these emissions. In addition to these environmental impacts, economic and industrial processes sustaining the transport system must be considered. These include the extraction and production of fuels, vehicles and construction materials, some of which are very energy-intensive (e.g. aluminum), and the disposal of vehicles, parts as well as the provision of infrastructure. They all have a life cycle timing their production, utilization, and disposal. Thus, the evaluation of the link between transport and the environment without the consideration of cycles in the environment and in the product life alike is likely to convey a limited overview of the situation and may even lead to incorrect appraisal, policies and mitigation strategies.

Transportation Activities Affecting the Environment

3. Environmental Dimensions

Transportation activities support increasing mobility demands for passengers and freight, notably in urban areas. But transport activities have resulted in growing levels of motorization and congestion. As a result, the transportation sector is becoming increasingly linked to environmental problems.

a. Climate change

The greenhouse effect is a fundamental component of the regulation of the global climate and is a naturally occurring process that involves partially retaining heat in the earth's atmosphere. These include carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), and halocarbons, gases that accumulate in the atmosphere long enough to reach a homogeneous composition across the world. Thus, irrespective of the location, their concentration is similar. The quantity of conventional greenhouse gases released into the atmosphere has increased substantially since the industrial revolution and particularly over the last 25 years. The respective impacts of greenhouse gases are further complicated by differences in their atmospheric lifetime (or residence time), which is the time they spend in the atmosphere before decaying or being absorbed by biological or chemical processes. For CO2, it can range between 5 and 200 years, while it is about 12 years for methane and 114 years for N2O. For halocarbons, such as Chlorofluorocarbons, it is at least 45 years.

The activities of the transport industry release several million tons of greenhouse gases each year into the atmosphere, accounting between 25 and 30% of all greenhouse gas emissions. There is an ongoing debate about to what extent these emissions are linked with climate change, but the debate relates more to the extent of these impacts than their nature. Some gases, particularly nitrogen oxide, also participate in depleting the stratospheric ozone (O3) layer, which naturally screens the earth's surface from ultraviolet radiation. The rise in air traffic, in addition to its emissions, has increased the number of contrails, which are mainly ice crystals formed from condensation around planes flying at high altitudes. They can contribute to climate change in a paradoxical fashion as, on the one hand, they can trap heat, and on the other, they are also reflecting solar radiation. In addition to being a contributor to climate change, transportation is also impacted by it, particularly over infrastructure (e.g. more floods due to rising sea levels) and operations (harsher operating conditions).

Climate Change and its Potential Impacts on Transportation

b. Air quality

Highway vehicles, marine engines, locomotives, and aircraft are the sources of pollution in the form of gas and particulate matter emissions. They affect air quality and cause damage to human health. The most common include lead (Pb), carbon monoxide (CO), nitrogen oxides (NOx), silicon tetrafluoride (SF6), benzene and volatile components (BTX), heavy metals (zinc, chrome, copper, and cadmium) and particulate matters (ash, dust). Lead emissions have declined substantially in the last decades as its use as an anti-knock agent for gasoline was banned in most of the world from the 1980s. Only a few countries, such as Myanmar, Iraq, and North Korea are still using leaded fuel. The main factors behind this ban were that tetraethyl lead (the form used as a fuel additive) was associated with neurotoxic effects on human beings and that it impaired catalytic converters.

Toxic air pollutants are associated with cancer, cardiovascular, respiratory, and neurological diseases. Carbon monoxide (CO), when inhaled, reduces the availability of oxygen in the circulatory system and can be extremely harmful and even deadly at specific concentrations. Nitrogen dioxide (NO2) emissions from transportation sources reduce lung function, affect the respiratory immune defense system, and increases the risk of respiratory problems. The emissions of sulfur dioxide (SO2) and nitrogen oxides (NOx) in the atmosphere form various acidic compounds that, when mixed in cloud water, creates acid rain. Acid precipitation has detrimental effects on the built environment, reduces agricultural crop yields, and causes forest decline.

Smog is a mixture of solid and liquid fog and smoke particles formed through the accumulation of carbon monoxide, ozone, hydrocarbons, volatile organic compounds, nitrogen oxides, sulfur oxide, water, particulates, and other chemical pollutants. The reduction of visibility caused by smog has several adverse impacts on the quality of life and the attractiveness of tourist sites. Particulate emissions in the form of dust emanating from vehicle exhaust and non-exhaust sources such as vehicle and road abrasion impact air quality. The physical and chemical properties of particulates are associated with health risks such as respiratory problems, skin irritations, eyes inflammations, blood clotting, and various types of allergies. Smog is often exacerbated by local physical and meteorological conditions, creating periods of high smog concentration and public responses to mitigate them, such as restricting automobile use temporarily.

Air quality issues have been comprehensively addressed in advanced economies, with substantial declines in the emissions of a wide range of pollutants. In developing economies, rapid motorization has shifted the concern to the large cities of China and India among those the most impacted by the deterioration of air quality.

c. Noise

Noise represents the general effect of irregular and chaotic sounds on people as well as animal life. Basically, noise is an undesirable sound. The acoustic measure of the intensity of noise is expressed in decibel (dB) with a scale ranging from 1 dB to 120 dB. Long term exposure to noise levels above 75 decibels severely hampers hearing and affects human physical and psychological well-being. Noise emanating from the movement of transport vehicles and the operations of ports, airports, and railyards affects human health through an increase in the risk of cardiovascular diseases. Ambient noise is a frequent result of road transportation in urban areas, which is the cumulative outcome of all the noise generated by vehicles (ranging from 45 to 65 dB), impairs the quality of life and property values. Falling land values nearby acute noise sources such as airports are often noted since buyers are less willing to bid on properties in areas of elevated noise levels. Many noise regulations impose mitigation if noise reaches a defined level, such as sound walls and other soundproofing techniques.

Estimated Air Pollutants Emitted by Highway Transportation in the United States, 1970-2018

d. Water quality

Transport activities have an impact on hydrological conditions and water quality. Fuel, chemicals, and other hazardous particulates discarded from aircraft, cars, trucks, and trains or port and airport terminal operations can contaminate hydrographic systems.

Because demand for maritime shipping has increased, marine transport emissions represent the most important segment of water quality impact of the transportation sector. The main effects of marine transport operations on water quality predominantly arise from dredging, waste, ballast waters, and oil spills. Dredging is the process of deepening harbor channels by removing sediments from the bed of a body of water. Dredging is essential to create and maintain sufficient water depth for shipping operations and port accessibility. Dredging activities have a two-fold negative impact on the marine environment. They modify the hydrology by creating turbidity that can affect marine biological diversity. The contaminated sediments and water raised by dredging require spoil disposal sites and decontamination techniques. Waste generated by the operations of vessels at sea or at ports causes environmental problems since they can contain a very high level of bacteria that can be hazardous for public health as well as marine ecosystems when discharged in waters.

Besides, various types of garbage containing metals and plastic are not easily biodegradable. They can persist on the sea surface for long periods of time and can be a severe impediment to maritime navigation in inland waterways and at sea and affecting as well as berthing operations. Ballast waters are required to control a ship's stability and draft and to modify their center of gravity in relation to cargo carried and the variance in weight distribution. Ballast waters acquired in a region may contain invasive aquatic species that, when discharged in another region may thrive in a new marine environment and disrupt the natural marine ecosystem. Invasive species have resulted in significant changes in nearshore ecosystems, especially in coastal lagoons and inlets. Major oil spills from oil cargo vessel accidents are one of the most severe problems of pollution from maritime transport activities.

e. Soil quality

The environmental impact of transportation on soil quality particularly concerns soil erosion and soil contamination. Coastal transport facilities such as ports have significant impacts on soil erosion. Shipping activities are modifying the scale and scope of wave actions leading to damage in confined channels such as river banks. Highway construction or lessening surface grades for port and airport developments have led to an important loss of fertile land. Soil contamination can occur through the use of toxic materials by the transport industry. Fuel and oil spills from motor vehicles are washed on roadsides and enter the soil. Chemicals used for the preservation of wooden railroad ties may enter the soil. Hazardous materials and heavy metals have been found in areas contiguous to railroads, ports, and airports.

f. Biodiversity

Transportation also influences biodiversity. The need for construction materials and the development of land-based transportation has led to deforestation. Many transport routes have required draining land, thus reducing wetland areas and driving-out water plant species. The need to maintain road and rail right-of-way or to stabilize slope along transport facilities has resulted in restricting the growth of certain plants or has produced changes in plants with the introduction of new species. Many animal species are becoming endangered as a result of changes in their natural habitats and reduction of ranges due to the fragmentation of their habitat by transportation infrastructures.

g. Land take

Transportation facilities have an impact on the urban landscape. The development of port and airport infrastructure is a significant feature of the urban and peri-urban built environment. Social and economic cohesion can be severed when new transport facilities such as elevated train and highway structures cut across an existing urban community. Arteries or transport terminals can define urban borders and produce segregation. Major transport facilities can affect the quality of urban life by creating physical barriers, increasing noise levels, generating odors, reducing urban aesthetic,s and affecting the built heritage. The expansion of logistics activities has also been an indirect factor of land take in suburban and periurban areas.

4. Environmental Externalities

Externalities are an economic concept that refers to the activities of a group that has consequences, positive or negative, intended or unintended, on other groups. These consequences, particularly if they are negative, are not fully assumed by those causing them. Therefore, the impacts are externalized. A common example of a positive externality concerns technology since it obviously benefits the innovative firm but also the whole economy through various productivity improvements or improved convenience. Negative externalities are highly relevant over environmental issues since many of the negative consequences of pollution are assumed by the whole society.

The environmental externalities of transportation include the consideration of physical measures of environmental damage and the evaluation of involved costs for society. The main fallacy underlined by externalities is that the costs attributed to a few sources (e.g. users of cars) must be burdened by many (users and non-users alike). Knowing the sources of environmental externalities is a relatively easy undertaking. At the same time, the evaluation of damage and other costs has not yet reached comparative standards among governmental and non-governmental agencies. The challenge resides over three issues:

Relationships. The nature and extent of the relationships between transport and the environment must be considered. This is particularly complex as most environmental relationships tend to be indirect and cumulative.
Quantification. Relationships must be quantified, and their value to environmental externalities should be appraised. This is highly challenging as only general figures subject to debate can be assessed. Therefore, the quantification of economic, social, and environmental costs subject to much contention. Inaccurate assessments can lead to the exaggeration or underestimation of environmental externalities and improper policies and regulations.
Mitigation. The level and extent of corrective actions that can be taken to alleviate environmental externalities linked to transportation, usually in a manner where those contributing bear the responsibility of their activities. Given the two above points, attempts at regulation, particularly if they involve a comprehensive framework (multinational and multisector), have not reached a significant consensus. Alternatively, a consensus may be reached about the nature of an environmental externality, but not about its mitigation.

The costs of environmental externalities can be considered fromeconomic, social, and environmental dimensions. The basic types of transportation externalities attributed to the environment fall within air pollution, water pollution, noise, and hazardous materials. Establishing and quantifying environmental externalities is a complex undertaking. Quantification is at its preliminary stage, and many have used this argument to differ the application of several environmental policies by lobbying governments. For instance, in the 1970s it took time to accumulate enough evidence to demonstrate the impacts of sulfur emissions, mainly originating from coal power plants, on rain acidification, and implement mitigation strategies (scrubbers, shift to natural gas). In the 1980s the impacts of chlorofluorocarbons and hydrochlorofluorocarbons on atmospheric ozone led to a series of regulations (e.g. Montreal Protocol of 1987) banning their use in the manufacturing of aerosols and refrigerants. Additionally, the wider the geographical scale, the more complex the environmental problem becomes since it involves cross-jurisdictional issues. Recent attempts to reach a consensus about climate change, such as the Paris Agreement of 2016, have underlined the complexity of multilateral environmental agreements over a complex issue that cannot be effectively quantified. Parties simply make general non-binding commitments

The sources/emitters of pollutants rarely bear the consequences of their impacts. This has several implications. First, when specific sources are concerned, like road transportation, users only take account of the direct costs of modal ownership like a car (vehicle, fuel, insurance, etc.). Ownership is often the only entry and utilization cost for several transportation modes. Society generally assumes the role of providing and maintaining infrastructure and other indirect costs like damage to structures and infrastructure, losses in productivity, cleanup, health services, and damage to ecosystems. Second, the geographic separation between sources and recipients is often acute. Acid rains and climate change are prominent examples. On a local level, a community may be affected by noise levels well over its contribution (notably near major highways), while another (e.g. suburbs) may be affected in a very marginal way and still significantly contributes to noise elsewhere during commuting.

There is a tendency towards a shift from direct to indirect consequences for environmental externalities, as of total costs involved. For instance, the absolute levels of air pollutant emissions have considerably dropped in developed economies. The problem of source reduction by vehicles was addressed because it was a straightforward cause of air pollutant emissions. This has tended to displace problems elsewhere and developed new types of externalities. Thus, the relative share of air pollution impacts is lessening, but not the number of vehicles, investment in infrastructure, or noise levels, which have their own externalities. Reductions in the relative importance of one type of externality redirect the focus on other types that were less addressed, but probably as important in the overall impacts of transport over the environment.

Transfers and additions of costs are prevalent attributes of environmental externalities. Trying to lessen economic costs will either lessen or worsen social and environmental costs, depending on the externality. In the context of limited resources, the distribution of economic, social, and environmental costs takes an important role as to what type of damage is acceptable and in what proportions. It is clear from past strategies that several economic costs have been minimized, notably for producers and users, while social and environmental consequences were disregarded. This practice no longer applicable since the society is less willing to bear the costs and consequences of externalities for various reasons (public awareness, quality of life considerations, high health costs, etc.).

5. Assessing Environmental Externalities

Air pollution is the most important source of environmental externalities for transportation, mainly because the atmosphere enables a fast and widespread diffusion of pollutants. Although the nature of air pollutants is clearly identified, the scale and scope of how they influence the biosphere are subject to controversy. On the positive side, emissions of the most harmful air pollutants, such as Carbon Monoxide and Volatile Organic Compounds, have declined despite substantial growth in the number of vehicles, which is indicative of the increasing levels of environmental compliance of vehicles. Carbon Dioxide emissions have increased proportionally with the growth of transportation usage.

As all externalities, costs are very difficult to evaluate because several consequences are not understood, the problems could be at another scale or highly correlated with others, and value (monetary or other) cannot be conclusively attributed. Two major groups of factors are contributing to air pollution, notably in urban areas.

Structural factors are inherently linked to the size and level of consumption of an economy. Factors such as income and education tend to be proportional to emissions.
Behavioral factors are linked to individualism, consumerism, and transportation preferences. Because of convenience and its symbolism, the car is systematically the preferred mode of transportation, even when other modes are available.

From a general perspective, the costs of air pollution associated with transportation can be grouped within economic, social, and environmental costs. Externalities related to water pollution are almost all indirect consequences. It is thus difficult to evaluate and to appraise the specific contribution of transportation over various environmental issues, which explains that problems tend to be addressed on a modal basis.

Noise emissions can be represented as point (a vehicle), line (a highway) and surface (ambient noise generated by a set of streets) sources. Noise pollution is only present as vibrations. For instance, for a road vehicle, vibrations are created through the internal combustion engine, moving parts (transmission), and friction on the surface over which a transport mode operates. The impacts of noise are strictly local, as vibrations are quickly attenuated by the distance and the nature of the landscape (trees, hills, etc.).

Environmental Externalities of Transportation

A hazardous material is a substance capable of posing an unreasonable risk to health, safety, and property when transported in commerce. Considering the large amounts of freight being shipped through transport systems, hazardous materials have become a concern. Several hazardous materials (hazmat) releases are spectacular events, notably when it involves a supertanker or a train convoy. However, we must consider that maritime transportation only accounts for 0.1% of the total number of hazmat accidents in the United States, although the volume of hazmat released is higher. Other transportation modes are thus important sources of hazmat release in the environment, even if they mostly involve small quantities. Minimal information is available on the nature and consequences of hazmats released during transportation, except for safety regulations. The effects of hazmat release are always punctual but intense. The nature of the effect is related to the type of accident and the hazmat involved. It can range from a small-scale accident where limited quantities of hazmat are spilled, to notable accidents requiring prompt intervention and evacuation of local residents.

Thus, transportation has a wide array of environmental externalities, some of which can be reasonably assessed while others are mostly speculative, but often taken as facts by environmentalist groups. Externalities are also occurring at different geographical scales, and some may even overlap over several scales. The bottom line is that better transport practices, such as fuel-efficient vehicles, that reduce environmental externalities are likely to have positive economic, social, and environmental consequences. While the public sector is incited the address the environmental impacts of transportation through policies and regulations, the private sector deals with compliance and tries to innovate. This iterative process is complex, but the environmental aspects of transportation have been addressed more comprehensively. It remains to be seen about which strategy is the most beneficial as in all environmental matters much subjectivity and often ideology prevails.

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