New Geography

Tag: public investment

  • Voting on Public Art in St. Petersburg Florida

    Public art may soon get a boost in St. Petersburg, Florida when citizens cast ballots for a new design proposal to redevelop the 1971 St. Pete Pier.  After a 4-year process involving two design competitions (citizens roundly rejected the first competition results), this Florida coastal city will, in 2015, implement a design.

    This time around, city officials are taking no chances and building consensus with the public step by step, keeping this $33 million public project at the top of voters’ awareness.  Seven design proposals are being considered, and after presentations in mid February, it appears that the field is narrowed.

    While several schemes radically erase or change the city’s infrastructure, one scheme nicknamed “Discover Bay Life ” by Orlando-based VOA Associates seems to stand out.   All things being equal, this scheme’s monumental-scale transformable art by cutting-edge artist Chuck Hoberman can be had for the least capital investment by the city.  The team chose to keep the modernistic “Inverted Pyramid” at the end of the pier, shoo cars off of the over-water deck, and move restaurants and retail – which always struggled in such a remote location – from the end of the 1,400 foot pier back onto land.

    Hoberman, who designed U2’s “Claw” for their 2011 album tour, is no stranger to moveable structures.  “It’s really very simple,” he stated during the presentation.  “There are a couple of motors, pulleys, and bearings.  We have structures like this in place that have lasted for decades.”  St. Petersburg, home to the world’s largest collection of 20th century surrealist Salvador Dali’s work, seems to have an affinity for cutting edge art, and this commitment could result in a grand, lasting civic space.

    A popular vote will decide the scheme by March 20.  City leaders, anxious to proceed, have stayed neutral about the results and will ratify their decision afterward.  The lesson in urban studies is to proceed with caution when you are considering changes to civic space.  Far from being a lost cause, the public realm is very much alive and emotionally connected to its citizens, at least in St. Petersburg, Florida.

  • States Seek to Become More Self-Reliant for Infrastructure

    During his March 29 visit to the privately built and financed PortMiami tunnel project, President Obama unveiled a new infrastructure plan. His latest proposal—costing $21 billion— includes a renewed call for a National Infrastructure Bank capitalized at $10 billion,  a  $7 billion  "America Fast Forward Bonds" program modeled after the former Build America Bonds;  and a sum of $4 billion in direct loans and loan guarantees. The White House announcement did not make it clear whether  this latest infrastructure initiative — " to encourage private investment in America’s infrastructure" —replaces or is in addition to the $50 billion "fix-it-first" infrastructure plan that the President announced in his State-of-the-Union address less than two months ago (see, "Infrastructure Advocacy and Public Credibility," InnoBrief, Vol. 24, No. 2, February 20).

    Decidedly, infrastructure investment remains on the President’s mind. It also continues to generate headlines. Just a week earlier, the American Society of Civil Engineers (ASCE) released its latest  "report card" giving the nation a D for highways and estimating the investment needs in surface transportation to the year 2020 to amount to a staggering $1.723 trillion. With expected funding during the same period amounting only to $877 billion, the funding gap comes out to be an astronomical sum of $846 billion— more than $100 billion per year. As if to reinforce the ASCE conclusions, the Washington Post came out with a front-page story about the deteriorating state of the Capital Beltway, "a politically iconic and locally vital highway… dying beneath your turning wheels"  (Beneath the Surface, the Beltway Crumbles, March 31, 2013)

    What kind of an impact the President’s repeated pleas, combined with the ASCE report card and alarming press stories of "crumbling " infrastructure, will have on public opinion and congressional attitudes remains to be seen. As we have noted earlier, they come at a time of severe budget pressures and intense Republican efforts to curb excessive discretionary spending. To be successful,  pro-infrastructure advocates must explain to the skeptical lawmakers where the money would come from.  "At some point somebody  has to pay the bill," House Speaker John Boehner pointedly remarked in reaction to Obama’s latest infrastructure proposal. The advocates also must persuade fiscally conservative House members that there are urgent and compeling reasons to boost spending on public works that override the imperative to reduce the deficit and get the nation’s fiscal house in order. 

    Second, the nation’s taxpayers must become convinced that spending more on transportation will make a difference in practical terms such as easing congestion and improving the lot of  commuters, and that the money will not be wasted on questionable projects that have little to do with improving mobility. "The Bridge to Nowhere" as a symbol of wasteful spending still lives in the collective public consciousness. 

    Third, infrastructure alarmists must contend with the upbeat conclusions of a Reason Foundation study, "Are Highways Crumbling?" That study has found that  America’s highways and bridges are in a far better condition today than they were 20 years ago. "There are still plenty of problems to fix, but our roads and bridges aren’t crumbling," said David Hartgen, lead author of the Reason study. "The overall condition of the public road system is getting better and you can actually make the case that it has never been in better shape." The study affirms what the traveling public experiences every day —- that  the nation’s highways and bridges not only are not "crumbling" but in most places are holding up pretty well. "Should I believe the pundits or my own eyes," asked Charles Lane, a Washington Post editorial writer, in a much-quoted column after having traveled thousands of miles "without actually seeing any crumbling roads."  (The U.S. Infrastructure Argument that Crumbles Upon Examination, October 31, 2012). 

    Fourth, as one highly knowledgeable reader of ours (a civil engineer) has observed, "we must get an objective, precise and quantifiable assessment of bridge conditions  before launching full bore into repair or replacement actions" costing billions of dollars. "Today," he wrote, " no one, and I mean no one  has an objective, clear and precise understanding of the actual condition of America’s bridges." Before asking taxpayers for billions of dollars to fix a problem based on subjective visual assessments of bridge conditions,  we want to be very sure that we have accurate data to back up our position, our reader concluded. His remarks about bridges could equally well be applied to the condition of the nation’s roads.

    Lastly, infrastructure advocates must overcome a cynical perception, common among the public, that pressures to increase federal funding for transportation are nothing more than special interest pleadings by interest groups that stand to profit from higher levels of public spending (ASCE is one of them, raising questions as to its objectivity, several observers have noted). 

    As one transportation advocate at a recent conference observed, "there is an enormous disconnect between us and the American public" — a disconnect that may not be easy to overcome.

    States Are Acting on their Own

    As we have argued in recent columns, no one disputes the infrastructure advocates’ claim that some of America’s transportation facilities, such as the Capital Beltway, are reaching the limit of their useful life and need reconstruction. Nor does any one disagree about the need to expand infrastructure to meet the needs of a growing population. But fiscal conservatives among infrastructure advocates (and we count ourselves among them) contend that this does not rise to the level of a national crisis requiring a massive $50-70 billion federal crash program as proposed by the President, or the expenditure of more than $100 billion per year as recommended by ASCE.

    Instead, the challenge can be met if each state did its part to incrementally, over a period of years, bring its transportation facilities up to a "state of good repair" using its own gas tax revenues  and its formula allocation of the Highway Trust fund dollars. As numerous news dispatches attest, that is precisely what’s happening (see below). A growing number of states are not waiting for the federal government to come to the rescue. They are using their own resources and raising additional revenue to pay for reconstruction of their aging facilities– "one lane at a time" if necessary—and keep their transportation systems in good working condition. "Governors and state legislatures realize that the level of federal assistance beyond 2014 is highly uncertain and they are acting on a credible assumption that federal funding will remain at current levels or may even be cut back," an association executive who is familiar with the thinking of senior-level state officials, told us.

    What about  large-scale reconstruction and capacity-expansion projects that require billions of dollars—transportation  investments that are beyond the states’  fiscal capacity to fund on a pay-as-you-go basis? Those investments,  provided they are credit-worthy (i.e. are revenue producing or backed by dedicated tax revenue),  will be mostly financed through long-term credit instruments  and public-private partnerships. The future of infrastructure megaprojects is intimately tied to the financial involvement of the private sector and to a wider use of  tolling, "availability payments,"  and innovative credit instruments such as TIFIA and private activity bonds (PABs), a veteran facilitator of public-private partnerships told us. " President Obama was right to have shined a spotlight on the PortMiami tunnel project and drawn attention to the importance of private investment in major transportation infrastructure. The Highway Trust Fund no longer can serve that purpose."

    The scenario we have suggested above—i.e., having states assume financial responsibility for fixing their aging transportation systems, while relying on debt financing for major facility reconstruction and system expansion—makes practical sense in view of the uncertain future level of  federal transportation funding.  It also may constitute a way to save the Highway Trust Fund from insolvency and provide a lasting solution to the federal transportation funding dilemma.

    NOTE: States that recently have undertaken to raise additional funds for transportation include: Virginia and  Maryland (broad transportation funding overhaul  that includes a dedicated sales tax applied to the wholesale price of gasoline.  A sales tax, it has been argued, is no less a "user fee" than the gas tax since every consumer who pays a sales tax also is served by or "uses"  the highway system for goods delivery );  Arkansas (one-half cent sales tax increase to back a $1.3 billion bond issue to fund highway construction over the next ten years); Massachusetts ($13.7 billion bond-financed transportation plan); Maine ($100 million transportation bond proposal);  Michigan ($1.5 billion road plan funded with vehicle registration fees and a tax on fuel at the wholesale level); Missouri (proposal for a dedicated one-cent sales tax for transportation; the tax is expected to raise $7.9 billion over ten years); New Hampshire (12-cent hike in the gas tax over three years approved by the House; Senate approval uncertain);  Ohio (turnpike toll-backed $1.5 billion bond issue for highway and bridge improvements); Texas (statewide tolling);  Wisconsin ($824-million boost to the state transportation fund);  Wyoming (10-cent fuel tax increase, the first in 15 years); and California, Oregon and Washington (exploring new mechanisms for project finance through the cooperative West Coast Infrastructure Exchange).

    Recent major transportation infrastructure projects largely financed with long-term credit instruments rather than federal dollars include: the I-495 Beltway HOT lanes project in Northern Virginia; New York’s Tappan Zee Bridge replacement; the San Francisco Bay Bridge Eastern Span replacement; the I-5 Columbia River Crossing;  the Highway 520 floating bridge in Seattle, the Midtown tunnel linking Norfolk and Portsmouth, VA, East End Crossing over the Ohio River, and the PortMiami Tunnel.

  • Why Emissions Are Declining in the U.S. But Not in Europe

    It wasn’t that long ago that the U.S. was cast as the global climate villain, refusing to sign the Kyoto accord while Europe implemented cap and trade. 

    But, as we note below in a new article for Yale360, a funny thing happened: U.S. emissions started going down in 2005 and are expected to decline further over the next decade, while Europe’s cap and trade system has had no measurable impact on emissions. Even the supposedly green Germany is moving back to coal.

    Why? The reason is obvious: the U.S. is benefitting from the 30-year, government-funded technological revolution that massively increased the supply of unconventional natural gas, making it cheap even when compared to coal.   

    The contrast between what is happening in Europe and what is happening in the U.S. challenges anyone who still thinks pricing carbon and emissions trading are more important to emissions reductions than direct and sustained public investment in technology innovation. 

    — Ted and Michael

    Yale 360

    Beyond Cap and Trade: A New Path to Clean Energy

    Putting a price and a binding cap on carbon is not the panacea that many thought it to be. The real road to cutting U.S. emissions, two iconoclastic environmentalists argue, is for the government to help fund the development of cleaner alternatives that are better and cheaper than natural gas.

    by Ted Nordhaus and Michael Shellenberger

    A funny thing happened while environmentalists were trying and failing to cap carbon emissions in the U.S. Congress. U.S. carbon emissions started going down. The decline began in 2005 and accelerated after the financial crisis. The latest estimates from the U.S. Energy Information Administration now suggest that U.S. emissions will continue to decline for the next few years and remain flat for a decade or more after that.

    The proximate cause of the decline in recent years has been the recession and slow economic recovery. But the reason that EIA is projecting a long-term decline over the next decade or more is the glut of cheap natural gas, mostly from unconventional sources like shale, that has profoundly changed America’s energy outlook over the next several decades.

    Gas is no panacea. It still puts a lot of carbon into the atmosphere and has created a range of new pollution problems at the local level. Methane leakage resulting from the extraction and burning of natural gas threatens to undo much of the carbon benefit that gas holds over coal. And even were we to make a full transition from coal to gas, we would then need to transition from gas to renewables and nuclear in order to reduce U.S. emissions deeply enough to achieve the reductions that climate scientists believe will be necessary to avoid dangerous global warming.

    But the shale gas revolution, and its rather significant impact on the U.S. carbon emissions outlook, offers a stark rebuke to what has been the dominant view among policy analysts and environmental advocates as to what it would take in order to begin to bend down the trajectory of U.S. emissions, namely a price on carbon and a binding cap on emissions. The existence of a better and cheaper substitute is today succeeding in reducing U.S. emissions where efforts to raise the cost of fossil fuels through carbon caps or pricing — and thereby drive the transition to renewable energy technologies — have failed.

    In fact, the rapid displacement of coal with gas has required little in the way of regulations at all. Conventional air pollution regulations do represent a very low, implicit price on carbon. And a lot of good grassroots activism at the local and regional level has raised the political costs of keeping old coal plants in service and bringing new ones online.

    But those efforts have become increasingly effective as gas has gotten cheaper. The existence of a better and cheaper substitute has made the transition away from coal much more viable economically, and it has put the wind at the back of political efforts to oppose new coal plants, close existing ones, and put in place stronger EPA air pollution regulations.

    Yet if cheap gas is harnessing market forces to shutter old coal plants, the existence of cheap gas from unconventional places is by no means the product of those same forces, nor of laissez faire energy policies. Our current glut of gas and declining emissions are in no small part the result of 30 years of federal support for research, demonstration, and commercialization of non-conventional gas technologies without which there would be no shale gas revolution today.

    Starting in the mid-seventies, the Ford and Carter administrations funded large-scale demonstration projects that proved that shale was a potentially massive source of gas. In the years that followed, the U.S. Department of Energy continued to fund research and demonstration of new fracking technologies and developed new three-dimensional mapping and horizontal drilling technologies that ultimately allowed firms to recover gas from shale at commercially viable cost and scale. And the federal non-conventional gas tax credit subsidized private firms to continue to experiment with new gas technologies at a time when few people even within the natural gas industry thought that firms would ever succeed in economically recovering gas from shale.

    The gas revolution now unfolding — and its potential impact on the future trajectory of U.S. emissions — suggests that the long-standing emphasis on emissions reduction targets and timetables and on pricing have been misplaced. Even now, carbon pricing remains the sine qua non of climate policy among the academic and think-tank crowds, while much of the national environmental movement seems to view the current period as an interregnum between the failed effort to cap carbon emissions in the last Congressand the next opportunity to take up the cap-and-trade effort in some future Congress.

    And yet, the European Emissions Trading Scheme (ETS), which has been in place for almost a decade now and has established carbon prices well above those that would have been established by the proposed U.S. system, has had no discernible impact on European emissions. The carbon intensity of the European economy has not declined at all since the imposition of the ETS. Meanwhile green paragon Germany has embarked upon a coal-building binge under the auspices of the ETS, one that has accelerated since the Germans shut down their nuclear power plants.

    Even so, proponents of U.S. emissions limits maintain that legally binding carbon caps will provide certainty that emissions will go down in the future, whereas technology development and deployment — along with efforts to regulate conventional air pollutants — do not. Certainly, energy and emissions projections have proven notoriously unreliable in the past — it is entirely possible that future emissions could be well above, or well below, the EIA’s current projections. But the cap-and-trade proposal that failed in the last Congress, like the one that has been in place in Europe, would have provided no such certainty. It was so riddled with loopholes, offset provisions, and various other cost-containment mechanisms that emissions would have been able to rise at business-as-usual levels for decades.

    Arguably, the actual outcome might have been much worse. The price of the environmental movement’s demand for its “legally binding” pound of flesh was a massive handout of free emissions allocations to the coal industry, which might have slowed the transition to gas that is currently underway.

    Continuing to drive down U.S. emissions will ultimately require that we develop low- or no-carbon alternatives that are better and cheaper than gas. That won’t happen overnight. The development of cost-effective technologies to recover gas from shale took more than 30 years. But we’ve already made a huge down payment on the technologies we will need.

    Over the last decade, we have spent upwards of $200 billion to develop and commercialize new renewable energy technologies. China has spent even more. And those investments are beginning to pay off. Wind is now almost as cheap as gas in some areas — in prime locations with good proximity to existing transmission. Solar is also close to achieving grid parity in prime locations as well. And a new generation of nuclear designs that promises to be safer, cheaper, and easier to scale may ultimately provide zero-carbon baseload power.

    All of these technologies have a long way to go before they are able to displace coal or gas at significant scale. But the key to getting there won’t be more talk of caps and carbon prices. It will be to continue along the same path that brought us cheap unconventional gas — developing and deploying the technologies and infrastructure we need from the bottom up.

    When all is said and done, a cap, or a carbon price, may get us the last few yards across the finish line. But a more oblique path, focused on developing better technologies and strengthening conventional air pollution regulations, may work just as well, or even better.

    For one thing should now be clear: The key to decarbonizing our economy will be developing cheap alternatives that can cost-effectively replace fossil fuels. There simply is no substitute for making clean energy cheap.

    © 2010 Yale Environment 360