The Department for Transport has initiated an exercise to assess how the transport system could be decarbonised, in line with the Government’s commitment to a net zero carbon target for the whole economy by 2050.

I have submitted some thoughts on behavioural aspects, including the scope for increasing active travel, decreasing motorised road travel and air travel, and the need to improve modelling to accomodate such behavioural changes.

The Secretary of State for Transport has announced £2 billion of investment to boost cycling and walking in response to the Covid pandemic. The Mayor of London has plans that he hopes will increase cycling ten-fold and walking five-fold post-lockdown. These intentions take advantage of current public health constraints on use of public transport and are certainly praiseworthy, but there are serious questions about feasibility.

Increasing cycling in London ten-fold would take its share of trips to that found in Copenhagen, where there are segregated cycling lanes on all roads with significant traffic. Moreover, the city is relatively small, such that you can cycle from the centre to the edge in an hour or so, as I have done but would not attempt in London. However, car use in Copenhagen is only slightly less than in London, while public transport mode share is half that in London. This indicates that you can get people off buses onto bikes, which are cheaper, healthier, better environmentally, and no slower in traffic than public transport. But it seems more difficult to get people out of their cars, even in a city where virtually all motorists have current or past experience of cycling. And a decrease in users of public transport, while helpful while the pandemic lasts, would lead in the longer term to loss of fare revenue and of level of service.

Transport for London (TfL) analysed cycling potential in 2017, considering which trips by motorised modes could reasonably be cycled, mainly taking into account trip length. If achieved in full, cycling would be responsible for 40% of all trips, which would be consistent with the Mayor’s ambition. However, a large proportion of potential cycling trips are currently done with at least one other person, which would limit switching. Beyond that observation, considerations of behaviour change and public acceptability were not taken into account.

Boosting walking five-fold is even more problematic, to say the least, given that its mode share of trips in London has long been stable at 25%. Some modest increase in the near term is likely as people avoid short bus journeys. Perhaps the Mayor has in mind to increase the distance walked per trip, which again is likely to some extent in the near term. Yet walking is the slowest mode of travel and time available for travelling is always a constraint. A TfL analysis of walking potential in 2017 estimated that there are more than two million potentially walking trips in London per day, compared with just under one million at present, but most potential walking trips could also be cycled. So it is very hard to see how a five-fold increase in walking could be achieved, even before we consider behavioural factors, in particular the reasons why so many people prefer to drive rather than walk short journeys.

To see if the Mayor’s ambition is realistic, we need a full analysis from TfL, taking into account behavioural aspects, including travel time constraints, and avoiding double counting. It also needs to show that the cost of new cycling infrastructure to meet objectives is affordable, given the current loss of revenue, and to recognise the implications for public transport of the longer-term loss of fare income.

The Full Business Case for HS2 Phase One has now been published. This  supports the Government’s decision to go ahead with the entire new rail route from London to the cities of the Midlands and the North, despite the dramatic escalation in construction costs, from £37.5bn in 2011, to £50bn in 2013, to £65bn in 2015, to £109m in the latest business case, and doubtless even more in eventual outturn.

It is noteworthy that the initial increases in the cost of HS2 did not change the supposed economic benefits, as measured by the benefit-to-cost ration (BCR), which held steady at close to 2.0, representing ‘high’ value-for-money according to the DfT’s Value for Money framework for economic appraisal. This was the result of substantial additional benefits being recognised by the promoters, even though nothing fundamental had changed in the business case. However, last year independent reviews by Douglas Oakervee and by the National Audit Office estimated higher capital costs that reduced the BCR to 1.5 or lower.

The new business case recognises these new capital costs but fails to identify any compensating additional benefits, such that Phase One (London to Birmingham) has a central-case BCR of 1.2, while the full “Y” network has a BCR of 1.5. Accordingly, Phase One has been assessed as ‘low’ value-for-money, while the full network would be ‘low to medium’. Any further increase in capital costs would reduce the outturn BCR, as would less demand than assumed for rail travel over the 60-year forecast period.

It is surely remarkable that the largest ever UK transport infrastructure investment is proceeding on the basis of such low returns, given the great number of more attractive potential such investments. Is this a case of politics trumping economics, or are the politicians right to see benefits not recognised by orthodox economic analysis?

The precedent of the Jubilee Line Extension (JLE) to London’s Docklands, with a BCR of less than one on the standard approach to appraisal, indicates the potential regeneration benefits that may be achieved. The increased real estate values, reflecting the economic benefits to businesses locating at Canary Wharf and beyond, were not taken into account since this would supposedly involve doubling counting benefits implicit in the value of travel time savings, the main element of economic benefit in the standard DfT WebTAG appraisal methodology. These time savings comprise small amounts of time saved by large numbers of commuters, valued by market research techniques that require respondents to trade time and money in the short run. Yet it is scarcely credible that the aggregate of such time savings could provide a measure of the long run cumulative real estate value uplift, whether for the JLE or for HS2.

Moreover, orthodox investment appraisal has no spatial content, no indication of the geographical distribution of economic benefits. This is a crucial issue for HS2, the strategic aim of which is to boost the economies of the cities of the Midlands and the North.

More fundamentally, the importance attached to travel time savings is misconceived. The National Travel Survey has been measuring average travel time for 45 years, over which period it has hardly changed, despite many £billions of public investment in transport infrastructure justified by the value of supposed time savings. In reality, people take the benefit of such investment not in the form of more time for work or leisure, but as greater access to desired destinations yielding more opportunities and choices. The purpose of HS2 is to increase the access to London of those living in the Midlands and the North (and vice-versa). Increased access will lead to changed land use and enhanced real estate values, which are the market indicators of economic development.

It is possible that the real economic benefits of HS2 are substantially greater than calculated in the Full Business Case using the WebTAG methodology. It is therefore time to reconsider the basis of transport economic appraisal from first principles.

 

 

 

 

 

 

 

 

 

 

 

 

The Covid-19 epidemic has prompted discussion of the implications for travel behaviour once it is over. Will the recent downward trend in trips to work and for shopping accentuate? Might people prefer their cars and bikes to travel on crowded public transport? Will there be a bounce back in leisure air travel? All is speculation at present.

More immediately, we see that the new highly infectious virus has prompted huge and rapid global efforts of technological development: tests for the virus and antibody, and novel vaccines. The epidemic has also stimulated extensive efforts to model the consequences, modelling that is open, transparent and collaborative, and that has proved crucial in informing government decisions, in particular to see how new technologies can lessen the need for social distancing.

There are lessons for the transport sector, for which the main priority must be decarbonisation to achieve the government’s net zero carbon target by 2050. Technological development should be stepped up in the areas of batteries for surface transport, and new propulsion technologies for aviation and marine. Electric charging infrastructure needs to be made generally available to stimulate the purchase of electric vehicles.

The models employed in the transport sector are neither open nor transparent. They are obsolete in that they were developed well before current concerns with carbon emissions and are deficient in predicting observed outcomes. We need a new generation of travel/transport models that are open, transparent, and possibly crowdsourced, to inform decisions on policies for decarbonisation, including how new technology can complement behavioural change.

Transport decarbonisation is the top priority. In contrast, automation is not important. As I argued in my recent book, Driving Change, autonomous vehicles will be difficult to deploy on the existing road network, and the benefits are quite limited. It is for the car industry to develop automated features if it thinks that customers might purchase such vehicles. It is for governments to put in place suitable regulatory regimes. But it should not be a priority for governments to support the development of the technology, which would be a distraction from decarbonisation efforts.

This blog post appeared also as a letter in Local Transport Today 17 April 2020

 

 

 

It can be hard to get reviews of new books of any kind, given the large number of books published and the limited number of journals etc that publish reviews. So I was pleased to see a generous notice of my recent book, Driving Change, in the Journal of Transport Geography: ‘a very readable, engaging and thorough investigation of the factors that have driven travel change in high-income countries so far, with the aim to determine what will drive change in the future.’

For the full review Driving Change J Trans Geog review

The Department for Transport’s (DfT) second Road Investment Strategy (RIS2) was published at the time of the recent Budget, committing to spend £27.4bn over the next five years on the strategic road network (SRN). The stated main priority is to maintain the existing roads. Only where existing roads are ‘simply not up to the job’ is the Government asking Highways England to develop wider, realigned or, in a few cases, wholly new roads to keep people and goods moving. Yet expenditure on maintenance is expected to be £12bn, whereas capital enhancements are worth £14bn.

Investment

Prioritising investment is based on the 2018 Road Traffic Forecasts, projecting growth on the SRN in the range of 29% to 59% by 2050. This suites the civil engineers of Highways England who see their main purpose as building roads. However, as I have argued previously, the DfT traffic forecasts are very problematic and have generally proved to overestimate outturn traffic levels. Moreover, as I noted in chapter 2 of my recent book, the rate of addition of lane-km to the SRN in recent years has been less than the rate of population growth, despite the high levels of spend.

It is therefore not surprising that average delays on the SRN have worsened during the RIS1 period, growing from 8.9 seconds per vehicle mile to 9.5 seconds per vehicle mile. The DfT’s ambition for performance at the end of RP2 is to be no worse than at the end of RP1. This is a very modest aspiration, and contrasts with the aim of the previous road investment strategy (RIS1) of a free-flow core network with mile a minute speeds increasingly typical.

The new ambition is consistent with the document’s recognition that it is ‘widely accepted that it is not possible to outbuild congestion across the whole of the road network’. Accordingly, investment is to be focused on congestion hotspots, so that average network performance will be at least as good in 2025 as it is in 2020. Yet, as I have pointed out, adding capacity induces more traffic, so tackling congestion hotspots has little impact beyond perhaps shifting congestion to another part of the network.

Optimisation

One odd feature of this and similar publications of Highways England, is the disregard of digital route guidance (Google Maps, Waze and others) that is in very wide use by drivers, because they find it of benefit in optimising routes under congested conditions and in estimating journey times. Roadside variable message signs are an outmoded technology, providing too little information, too late to be of much use.

There is picture of a route guidance app on page 38 of the RIS2 document, but no mention of its relevance. There is a statement that ‘During RP2 Highways England will work with Transport Focus [a consumer body] to investigate future opportunities to make more granular information about delay on the SRN publicly available. We anticipate that this might include reporting on a regional basis, journeys between conurbations, and maps showing delay across the network on a link-by-link basis.’ Highways England seems totally out of touch with the real world.

Non-investments

The RIS2 mentions the outcome of a number of earlier ‘strategic studies’ that now seem unlikely to lead to much. For the M60 Manchester NW Quadrant, it is concluded that the transformational options identified by the study would have significant adverse impacts on local people and communities, and overall would not provide value for money. The proposed Trans-Pennine Tunnel, improving the route between Manchester and Sheffield, seems unlikely to proceed. The Oxford to Cambridge Expressway project has been paused to look at other options.

In contrast, the A303 Stonehenge Tunnel is to go ahead. Yet the National Audit Office found that transport and economic benefits accounted for only 27% of total benefits; the value of cultural heritage, based on a survey asking people what they would be willing to pay to remove the road altogether, was put by the DfT at 73%, and yet this yielded a benefit-cost ratio of only 1.15 , which in the event is likely to be worse because cost overruns. The NAO noted that the DfT has no plan for the corridor as a whole, and that all the other projects on the route offered poor value for money.

This critique of the A303 route can be generalised to the RIS2 as a whole. Although it is entitled a ‘strategy’, in reality it is a construction programme that is deficient in both economic justification overall and indication of spatial impact of economic benefits. What benefits might we expect, and where? We are not provided with more than vague aspirations.

 

 

 

 

 

 

 

 

 

The Court of Appeal has upheld a challenge to the decision to proceed with a third runway at Heathrow airport on the grounds that the Government’s Airports National Policy Statement (ANPS), which endorsed the runway, was unlawful in failing to take into account the Government’s commitment to the provisions of the Paris Agreement on climate change.

The Government takes the view that Heathrow expansion is a private sector project and so will not appeal against the judgement, leaving open the possibility of later amending the ANPS. This doubtless suites the Prime Minister, who represents a West London constituency under the flightpath and who had earlier been a vocal critic of the airport’s expansion. Abandoning the third runway would also add to the Government’s credibility when hosting the COP26 climate change conference in Glasgow later this year. Meanwhile, the owners of the airport must decide whether an appeal to the Supreme Court would be worthwhile.

The case for increasing the capacity of Heathrow, the UK’s main hub airport, has been based on the needs of business: more direct connections for exporters, facilitating inward investment to the British economy, and boosting London as a world city for doing business. There is no convincing argument for expanding tourism, inbound or outbound, given the need to reduce carbon emissions from aviation.

What is generally overlooked is that most air travel is for leisure purposes. Even at Heathrow, only 25% of passengers are on business trips. So there is ample room for business travel to grow if the demand emerges. Leisure travellers would be displaced to other airports with spare capacity, Stansted and Luton near London, and regional airports beyond. This would happen under the influence of market forces since most business travellers would be willing to pay a premium for the advantages of Heathrow.

Suppose I need to travel to India, to Bangalore for instance. If I’m on a short business trip paid for by my organisation, I’ll fly direct from Heathrow. But if I’m going on holiday, paying out of my own pocket, I’ll shop around for a low-cost flight, expecting to fly with one of the Middle East-based airlines, changing flights at an intermediate hub such as Dubai. I might leave from Heathrow or from Gatwick, Stansted or a regional airport, depending on price and convenience. If demand for business travel to Bangalore grows, leisure travellers who might have flow direct will be have viable alternatives.

Ultimately, growth of demand for air travel will be constrained either by airport capacity or by the need to limit carbon emissions to comply with the Government’s legally binding target of net zero emissions by 2050. One way or another, the cost of air travel is likely to rise, reducing growth in demand.

Hubbub, a UK environmental NGO, has released a report on flying by people in the 20-45 age group, based on a survey sample of two thousand. It found that no less than half the flights by men aged 20-45 in 2019 were for stag parties and a third of flights by women were for hen dos. Hubbub is concerned about the carbon emissions from these flights and the options for reduction by selecting a UK destination. For example, swapping Barcelona for Brighton is the equivalent of going vegan for 2.5 months.

The high proportion of flying for partying is surprising, and reflects the availability of low-cost flights outside the main season for tourist travel. Some increase in the cost of leisure air travel would increase the attractions of domestic destinations, without rather little loss of enjoyment, I anticipate.

Although the private sector operator of Heathrow has a natural commercial interest in expanding its capacity, not all the airport’s users agree. Willie Walsh, chief executive of British Airways’ parent company, has been critical on account of the likely need to cover the cost of construction through higher landing charges. A capacity constraint would allow BA as the dominant airline to raise prices over time, but would also allow the Government to claw back some of the increased profits through a rise in Air Passenger Duty.

In short, we can manage without a new runway at Heathrow. The market will allocate airport capacity to the highest value users, and the UK’s chances of meeting its carbon reduction target will be improved.

 

 

 

 

 

 

The environmental charity Hubbub has released a report on flying by people in the 20-45 age group, based on a survey sample of 2000. It finds that half the flights by men aged 20-45 in 2019 were for stag parties and a third of flights by women were for hen parties. Hubbub is concerned about the carbon emissions from these flights and the options for reduction by selecting a UK destination. For example, swapping Barcelona for Brighton is the equivalent of going vegan for 2.5 months.

An implication of this high proportion of optional leisure flights is to weaken the case for additional runway capacity to accommodate the forecast growth of demand for air travel, in particular the third runway planned at Heathrow. In the absence of increased capacity, growing demand would lead to higher prices in the market for air travel, which would tilt the balance towards UK destinations for leisure trips, to the benefit of the economy of seaside towns and other hospitable destinations. Most air travel is for leisure purposes. There is plenty of airport capacity for business travellers who are willing to pay a premium to command priority over those on leisure trips.

The Prime Minister has announced the Government’s decision to go ahead with High Speed 2 (HS2), the new rail route from London to the cities of the Midlands and the North, despite the dramatic escalation in construction costs, from £37.5bn in 2011, to £50bn in 2013, to £65bn in 2015, to excess of £100m in 2019 and probably in eventual outturn.

The value for money (VfM) of the investment has been computed according to the Department for Transport’s (DfT) standard approach to appraisal of proposed investments. This compares benefits with costs according to long-established principles of cost-benefit analysis as applied to public sector investments. The main benefit to users of a faster rail route is assumed to be journey time savings, which are supposed to allow us more productive work or enjoyable leisure. To these time savings are added lesser contributions from improved reliability and reduced overcrowding, as well as some wider economic impacts such as productivity gains and environmental impacts.

It was noteworthy that the initial increases in the cost of HS2 did not change the supposed economic benefit, as measured by the benefit-to-cost ration (BCR), which held steady at close to 2.0, or £2 of benefit for every £1 of cost. Substantial additional benefits were recognised by the promoters, even though nothing fundamental had changed in the business case. However, the independent review by Douglas Oakervee, commissioned by the Government and just published, puts the BCR at 1.1 to 1.5, reflecting the increase in costs. The National Audit Office’s recent report on HS2 estimated a BCR of 1.4.

The DfT is yet to issue a revised Business Case for HS2 that takes account of the latest plans and possible cost savings. When it does, I expect to see the usual tweaking and massaging of assumptions about an uncertain future state of the world that can be defended as a legitimate exercise of professional judgement by transport economists who wish to please their clients, in this case Ministers who have decided to press ahead. The objective will be to achieve a BCR of 2, which is the threshold for the DfT’s High Value for Money (VFM) category.

Apart from such malleability in analysis, there are two big problems with the standard approach to the economic appraisal of proposed transport investments. First, the time saving benefits arise from trips between cities and say nothing about economic development within cities. The strategic case for HS2 is to boost the economies of the cities of the Midlands and the North by improving their connectivity to London and the South East. But the impact on cities, as seen in the form of property development and increased real estate values from productivity enhancement and employment creation, does not enter into the cost-benefit calculus, which is silent on the geographical distribution of benefits. The Oakervee review concluded that the economic case does not currently fully align with the strategic case because economic rebalancing, one of the primary drivers in the strategic case for HS2, is not currently reflected in the economic case.

The second problem is that average travel time, as measured in the National Travel Survey, has hardly changed over the past 45 years, despite many £billions of public investments in the transport system justified by the value of journey time savings. What actually happens is that investments that result in increased speed of travel allows us to travel further, to gain access to more distant destinations, opportunities and choices, which are the real benefits experienced by users, not the hypothetical time savings assumed by the economists. Such transport investments lead to changes in land use as people and businesses take advantage of the improved access to land and property capable of better use.

The standard approach to economic appraisal of transport investments is quite narrowly focused and disregards the value implied by changed land use and the geographical distribution of economic activity. The DfT has not required or supported modelling of the land use impacts of transport investment, which has contributed to the failure to value the real benefits of HS2. These might turn out to be quite substantial if the linked cities can take advantage of the modern high-speed connection to London to boost their economies by local investment in property development near to new stations and in urban rail to enlarge the benefits to surrounding districts.

The purpose of HS2, as with any new railway, is to move more people through space, so spatial impacts are what are of interest. The focus of the transport economics profession on time savings has been quite misconceived.

This blog was also published in Transport Times on 13 February 2020