Thursday, August 11, 2005

Should Environmentalists Hate Sprawl? The Sprawl Brawl Part Two

What are the environmental consequences of suburban growth? The rhetoric about “sprawl” can get awfully heated. If people want to live in the suburbs, what is the negative externality this imposes on everybody else? Here are some candidates:

A. More Driving leading to more smog, more SUVs and more CO2 production?
B. Longer Commute times?
C. More road paving?
D. More water consumption?
E. More conversion of farmland into suburbia?

In an earlier post, I covered A. Candidate B is false. Using micro data from the National Household Transportation File, Ed Glaeser and I (see our 2004 Handbook Chapter titled Sprawl and Urban Growth) found that suburbanites do live further from their job than urbanites but they drive faster so their commute times to work are quite close to urbanites. If a city had 100% of its jobs in the Central Business District and if the population was moving to the suburbs, then commute times could certainly rise. But this has not happened. People and jobs have both been suburbanizing and it should not be shocking that people who work in the suburbs, live in the suburbs. The more interesting pattern is reverse commuting where people live in the center city and commute to the suburbs. Are commute times increasing in sprawling metropolitan areas? While there are certainly long distance commuters, especially in areas with high home prices such as Boston, San Fran and New York City, I do not think that there is compelling evidence of sharply rising commute times in growing areas. One data source that can be used to test this claim is the Texas Transportation Institute’s data base that provides “lost hours” to commuting for roughly 75 metropolitan areas over the last 30 years.

More road paving?

Yes, but how do we value the “lost” natural capital? I would hope that suburban highway construction consultants do discuss alternate possible routes with ecologists. I have never seen a study documenting that the presence of ecological hotspots can deter highway builders from building a highway. Kerry Smith has done some related work but I think that this is an under-researched topic. Obviously, the natural capital costs of highway construction could be minimized if ecologists do have some say in siting decisions. I would be fascinated to know more about whether with the rise of the environmental movement; do ecologists now have more say than they used to? Or does this vary by “Blue State” , “Red State”? If an environmental impact statement suggests that there will be large costs from a specific road project, what happens next? Does the EIS get filed in the garbage can or do the highway authorities have to address the statement’s points and come up with an offset plan?

More water consumption?

When people think of sprawling metro areas they think of Houston, Phoenix, Atlanta, Las Vegas. Many of these growing cities are in warm winter, low rainfall areas. If more people live in such areas and each household pursues the American Dream of a detached house on a ½ acre lot then growing grass and watering will increase local demand for water. While there are more households with more lawns and toilets demanding water, there are two offsetting trends that help to mitigate this environmental impact of sprawl. Some states such as California have had success pushing households to conserve water through encouraging the purchase of green appliances (see South Coast Regional Report and research by Chris Timmins). Other states are actively metering water consumption and making households pay the gallon. One fact that surprises me about water is that water prices are not higher in arid areas. This sounds like a bad signal. Research by tufts university researchers has documented this point (see Kirshen, Paul, Andrea L. Larsen, Richard Vogel and William Moomaw. Lack of Influence of Climate on Present Cost of Water Supply in the USA. Water Policy 6, 2004 269-279.)

More conversion of farmland into suburbia?

This must be right but let me play Devil’s advocate. If the farm is a pig farm, suburbanites might rejoice if the farmer sells out to the developer. In this case suburban housing is less nasty than the farm. You will rightly point out that this is a special case that in most cases the farmers were providing “open space” without explicit compensation from the suburban neighbors. The suburban neighbors gain “use value” (the nice view) and existence value from the farmer and lose this when he sells out to a suburban developer. The missing market in this exciting example is that the farmer had no way to collect for the services he was providing his neighbors and thus he underestimated the social value of his land when he made the decision to sell his land to the developer.

The good news here is that many local governments recognize this issue and are taking pro-active steps. Throughout the United States, municipalities are purchasing open space around their borders to guarantee that the land is not developed. For example, the city of Boulder, Colorado, has earmarked a 0.73 percent sales tax to fund the purchase of 25,000 acres to establish a greenbelt around the city. In the Seattle metropolitan area, King County has adopted a different strategy with a similar goal. Drawing upon a $50 million bond issue, the county purchases development rights for agricultural land facing pressure from developers, with priority rankings determined in accordance with the intensity of such pressures.

Such government initiatives solve a free rider problem. In the absence of government intervention, environmental organizations such as land trusts might go door to door, asking people to contribute money to help preserve open space. But few people are likely to give under these conditions. The “win-win” for any one household is to contribute nothing to such programs and let everyone else underwrite their cost. As a result, too little money is invested in protecting local public goods. Government’s unique ability to collect taxes and allocate revenue solves this problem. However, not all governments can take this approach: like many green policies, “open space” initiatives are more likely to succeed as local incomes rise. After studying voting patterns for all open space referenda in the United States between 1998 and 2003, Matt Kotchen and Powers (2005) found that richer jurisdictions and jurisdictions with more home owners were more likely to vote to hold such ballot initiatives.

So, in the presence of Private Land Trusts and local governments who are purchasing open space and development rights, as long as these organizations have capable ecologists who help them prioritize which pieces of land are most valuable, then I’m optimistic that sprawl will follow the path of least resistance and will cause less ecological damage.

What is my bottom line on the environmental cost of sprawl? Sprawl has increased carbon dioxide emissions and it has paved over some farms. Due to greener vehicles over time and water conservation efforts it has not increased urban air pollution or urban water consumption. Given the recent actions by Land Trusts and local governments, I do think that the most valuable farmland will be protected so this mitigates the social cost of land conversion. So, sprawl’s main impact is contributing to climate change. Do we follow Hamilton and others at the World Bank and value carbon dioxide at $20 per ton to calculate the marginal social cost of suburbanization? Regardless of what number we choose here, technology could mitigate this externality. If suburbanites all bought Toyota Prius SUVs maybe Al Gore would like them more.