Transport Solutions to the Energy Crisis
Energy crises invite energy theatre.
Governments panic, subsidise fuel, toy with rationing, announce some restriction, and hope voters confuse motion with progress. Then prices ease, the measures are unwound, and the system that made the crisis painful in the first place remains exactly as it was. That is the wrong way to think about transport and energy. We have built systems that require too much travel, too much peaking, too much empty space in vehicles, and too much metal moved to carry too few people. Reducing demand cuts oil use and pollution at low cost, while better operations can raise person-flow on mature networks without major new construction.
There are short-term emergency measures, which can buy time in a fuel shock. And there are longer-term no-regrets measures, which are worth doing whether oil is at $40, $90, or $140 a barrel. The emergency measures must be done because we didn’t do enough no-regrets measures the last time we wasted an emergency.
Energy Solutions to the Energy Crisis
The most obvious solution is increase energy supply. While this is probably locally optimal, it is basically a transfer, energy comes, e.g., to Australia, which means it is unavailable everywhere else. Since energy crises are global, this is a form of hoarding at the national level. And while national governments criticise individuals for doing this (hoarding may very well be personally optimal, while socially detrimental), they do it themselves. The inability to speak plainly about selfishness, why it is rational for the individual while not for the group, is a huge failing among politicians and media, who prefer to use shame and imply that it is not in the individual’s best interest either. (Of course, it is in the politician’s self-interest not to speak plainly, so you see the problem.)
Some Lessons from the 1970s
Avoid Rationing: As Carmen Difiglio (1984) argued, gasoline rationing, allocation, and price controls can impose very large economic costs, with none of the rationing variants reduced that waste to an acceptable level. In the US, fuel was allocated regionally, so some regions were dry, and others kept fuel flowing, even if the higher and best use would have spread that fuel more widely using prices to allocate supply. In a physical supply shortage, rationing may still be necessary. But it should be understood as triage, not as good transport policy.
Lower Speed Limits: NHTSA’s review of the 55 mph (~88 km/h) US national maximum speed limit notes that, after it was enacted in 1974 to conserve fuel, travel fell, speeds fell where limits were lowered, and total traffic fatalities dropped by 9,100 from the previous year. The slower and more uniform speeds were judged to have saved 3,000 to 5,000 lives in 1974 alone. While many interstate highways saw their speed limits raised again in the late 1980s, the episode still showed the value of lower limits.
Consider short-term emergency restrictions, but be careful. There were also cruder emergency restrictions, odd-even rationing, car-free days, sales-hour limits, thermostat rules, and so on. These can suppress demand quickly. They can also be clumsy, inequitable, and easy to game. Noland et al. (2006) note that Athens’ odd-even scheme became, in effect, a subsidy to second cars for households that could afford them.
The short-term emergency toolkit
If the problem is immediate fuel scarcity or a sharp price shock, the first job is to reduce fuel use quickly without breaking the transport system.
The catalog of transport demand management (TDM) strategies includes many things:
Time:
Staggered hours,
flex time,
compressed weeks, and
telecommuting (work from home)
all reduce peak travel without requiring investment infrastructure or even public subsidy.
Vehicle Occupancy:
Carpools,
vanpools, and
subscription (private) buses
are not fashionable, but they attack one of the most obvious inefficiencies in the system, the near-empty car. In a world where we routinely move a tonne or more of tare weight to carry a single person, raising occupancy is valuable. The problem of course is that out-of-home carpools and vanpools are difficult to organise and sustain, because they are less convenient than point-to-point transport. But if costs get high enough, people will switch.
Price:
Public transport usage by cutting fares can help in the short run, but it should not be romanticised, and requires a public subsidy in nearly all cases, reducing the operating agency’s income. Destatis reported that after Germany’s 2022 €9 ticket, rail journeys over 30 kilometres were up 44 percent on average while the ticket was available, but road travel over those same distances remained roughly constant. Later, Liebensteiner, Losert, Necker, Neumeier, Paetzold, and Wichert found a strong increase in public transport use, only a modest 4 to 5 percent fall in car traffic, and a substantial rise in train delays. Queensland’s adoption of the 50c fare has had much weaker effects on demand (Rose et al. under review).
Parking pricing and road pricing are effective at discouraging auto use, but remain politically difficult though not impossible. They would be hard to implement as emergency measures, though perhaps easier as emergency measures than in general. [See below]
Fuel subsidies (such as reducing fuel taxes) are often the worst response. They are sold as relief for “the worker who is doing it hard”, but they are really a way of paying people to keep consuming the thing that has become scarce. If relief is needed, and sometimes it is, it should be aimed at households, especially poorer households, not indiscriminately at litres of fuel. An energy crisis is exacerbated by pretending energy is cheap.
Vehicle-distance charges have been proposed for electric vehicles (EVs) (and vehicles in general) as a way to ensure EV drivers pay their fair share for road maintenance, since they avoid fuel taxes. The problem has always been that they discourage EV purchases and use, which we want to encourage for environmental and energy policy reasons. But it will be easier to implement now, when the average EV owner has a higher income than the average internal combustion engine vehicle owner. Subsidising EV ownership, while charging for use, seems the right balance here.
The no-regrets agenda
For people who, unlike those who kicked off this particular adventure, don’t get their adrenaline kicks from responding to entirely avoidable crises, the more interesting question is what should stay after the panic passes.
A no-regrets measure is one worth doing even if fuel prices fall tomorrow. It is worth doing because it also reduces congestion, improves access, lowers emissions, or makes the system work better:
Pricing:
Parking charges. Free parking is one of the largest transport subsidies. It rewards solo driving, hides its cost, and penalises everyone who does not use it. That is why US EPA’s parking cash-out guidance described parking cash-out as one of the most effective means to encourage employees not to drive alone. (Giving people cash if they don’t drive to work, e.g.) Parking cash-out stops forcing everyone else to subsidise it. Pricing parking properly, or cashing out the subsidy, is a classic no-regrets measure. It helps in an energy crisis, and it still helps when the crisis is congestion, emissions, or land wasted on storage of idle cars.
Road pricing is the same kind of measure. Congestion is a scarcity problem. Scarce road space should not be allocated as if it were free. London remains the best-known modern case. The London Assembly’s first review judged the congestion charge against explicit criteria, including sustained congestion reduction, better bus journeys, and net revenue for transport initiatives. Transport for London’s third annual monitoring report found that the scheme had been successfully introduced, reduced congestion and delays, improved journey time reliability, and generated net revenues to support the wider transport strategy. Pricing road space is more durable than subsidising fuel because it reduces traffic now and improves the system later.
Transportation Systems Management:
TSM reviews the problem of operating the system more efficiently. The menu includes bus priority, queue jumpers, signal priority, ramp meters, electronic tolling, and access management. Many have already been implemented in many places, though bus priority still needs a lot of work.
Ramp Metering: FHWA’s ramp metering primer describes ramp metering as a proven, cost-effective operational strategy that can reduce delays and crashes, increase speeds and throughput, and sometimes lower fuel use and emissions as well.
Signal Priority: FTA’s signal-priority guidance makes the companion point for buses: because a transit vehicle can carry many people, giving it priority at intersections can increase the person-throughput of the street. If one vehicle carries fifty people and another carries one or two, the network should differentiate.
Land use intensification belongs in the no-regrets category too, though on a slower timescale. Higher densities, mixed use, and transit-oriented development are not energy policies in the narrow sense. They are trip-structure policies. They determine whether ordinary daily life requires long motorised travel for ordinary things.
Vehicles, but not only vehicles
Over the long run, fuel economy standards did more good than a great many theatrical crisis measures. Those benefits result in less fuel being used per trip than before, and even less consumption in total, after accounting for population growth.
Electric Vehicles have a huge role as well. But it would take more than a decade to replace every internal combustion engine vehicle on the road even if we mandated that all new cars were EVs today.
To move a person one kilometre, we often move a tonne or more of vehicle. That is expensive in energy and in space. It also means that better engines or better batteries, though useful, will not rescue a transport system that still requires too many long trips, too much peaking, and too much low-occupancy travel. The better long-run strategy is to “use less energy to attain the same or better access.”
E-bikes, though not without problems discussed in the linked post, use a fraction of the energy of a car.. E-cargo bikes have special promise for shorter shopping trips, though delivery also fills that role.
What is to be done?
In the short term, use the emergency measures that are fast, reversible, and tolerably administrable. Lower speeds. Shift work schedules. Support telework where possible. Encourage carpools, vanpools, and other occupancy gains. Subsidise e-bikes. Use transit where capacity exists, but do not pretend fare cuts alone are transformative. Resort to rationing-style restrictions only when the physical shortage is serious enough that cruder measures are unavoidable.
In the longer term, keep the measures that make sense even without the crisis. Price parking. Price scarce road space. Improve bus priority and signal priority. Use ramp meters and related operating tools on mature road systems. Keep flexible work patterns that reduce peaking. Keep building places where daily needs are closer together. These are responses to a transport system that wastes too much fuel, too much time, and too much urban space even when oil is cheap.
Energy crises tempt us to focus on the fuel. Transport policy should focus on the system. The short-run measures buy time, and allow fuels to be available for higher valued trips. The no-regrets measures are the ones that leave us less exposed next time, or maybe avoid a next time altogether.
FIN
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