Jose Gomez-Ibanez on Global Transportation Challenges

Interviewed by Molly Lanzarotta on September 2, 2011

From urbanization to the global financial crisis, the role of transportation infrastructure is key in determining the quality of life and economic development of nations and regions. Jose Gomez-Ibanez is the Derek C. Bok professor of urban planning and public policy at Harvard University, where he holds a joint appointment at the Graduate School of Design and the John F. Kennedy School of Government.

Q. In the U.S., we’ve been hearing for quite a while that our transportation infrastructure is in need of upgrading. How does the current global economic crisis change the priorities of urban policy makers, especially in terms of infrastructure?

Gomez-Ibanez: Yes, I think that’s right. We’ve been under-spending on investment and on new capacity for years. The economic downturn gives us a reason to spend more because it can be an effective form of stimulus and job creation.

But there are two caveats. One is that it’s not very easy to ramp up infrastructure spending quickly. There are not that many projects that are what we call “shovel ready.” The planning, permitting, design, and contracting simply takes time, so infrastructure is not as responsive as we might like.

The second caveat is that you want to build something that’s worthwhile, not just something that employs people. My concern is that some of the projects that are advanced in response to the need for a stimulus may not be the most worthwhile ones. I, for example, was not upset when the Florida high speed rail proposal was recently rejected by the governor of Florida. It was a several billion dollar project that I think had very small economic, environmental and social benefits and it probably shouldn’t have been built, stimulus or no. But I was disappointed with the decision by the governor of New Jersey to cancel the new rail tunnel under the Hudson River to Manhattan. That is a piece of infrastructure that was potentially very valuable to the economy of the greater New York metropolitan area. You want to find projects that not only stimulate the economy but are of great lasting value.

Q. Beyond the economic crisis, what are some of the greatest challenges that policy makers currently face in terms of transportation policy in the U.S., and around the globe?

Gomez-Ibanez: There are so many transportation challenges we face that it’s hard to make a short list, but let me give you four. One that we face in the U.S. is raising adequate funds to maintain and expand our infrastructure as quickly as we need to. We rely heavily on revenue sources like the gas tax which is relatively low – the federal gas tax is 18 cents, the states add another 25-40 cents, so it’s about 60 cents a gallon, or less. The tax has been at that level for years and its value is being eroded both by inflation and by the increasing fuel efficiency of motor vehicles. Unfortunately we have been unable to convince the public that the gas tax ought to be raised when an increase of 20 cents per gallon would cost them a penny a mile more, something relatively trivial.

In developing countries I think there are several critical challenges. One has to do with urbanization and motorization of developing countries. Their cities are growing like mad as people migrate from rural areas in search of good paying jobs. At the same time, as these countries are getting wealthy, the people are shifting from public forms of transportation to private, motorized forms of transportation, like motorcycles and automobiles. This all means incredible congestion and incredible demands for infrastructure to relieve that congestion.

The other transportation problem of special note in developing countries is export freight. Many countries have inadequate railway and highway systems to feed their inefficient ports. If you think about this, it’s like a tax on their development, an unnecessary burden or fee on every container that goes out of the country, and it reduces their economic competitiveness accordingly.

Finally, climate change is a transportation problem that the entire world faces. Transport is a heavy user of petroleum, largely because petroleum has a lot of energy per kilogram of weight so it’s easy to carry it around. I have high hopes for electric vehicles and biofuels, but their development depends on the evolution of clean power sources like nuclear or hydro or wind or solar which do not produce greenhouse gas emissions. For now, we have to assume that it will be a long, long time before all our coal and petroleum plants are gone.

Q. Urban density fell somewhat out of favor in the era of suburban development. How and why do you and other urban planners make the argument in favor of density?

Gomez-Ibanez: Urbanization is one of the defining and characteristic trends of our time. The globe is rapidly becoming an urban dominated society so density in terms of cities has actually never been more popular than it is. I think the question really relates to density within cities. How dense do we want those cities to be? How close do we want people to live towards the centers of cities? Planners like density because it promises shorter trips. The denser the city, the closer houses and workplaces are to one another, the less one has to travel. And when density exceeds certain thresholds, it makes it more attractive to use public transportation or even walk. So there are environmental benefits of density.

But there are two caveats we need to remember, and one of them is that there is a popular taste for houses with private yards. Single family, detached houses have been a long-standing , important component of our housing market. And mandating very high densities would have a cost in terms of raising the prices and reducing the availability of homes with private yards.

The second caveat to remember in the context of the U.S. and Europe is that a policy to reduce environmental pollution by promoting density would take an awfully long time to have much of an effect. The difficulty is that policies to increase density work on the margin of new development of cities. And most cities in the U.S. and other developed countries may be adding at most 2 or 3 percent to their housing stock in any given year, so that it takes many years before the a significant amount of the housing stock would be denser than it is today.

Q. Tell us something about the research you are doing right now.

Gomez-Ibanez: My research in transportation infrastructure is really focused on two sets of topics. One is the role of the public and the private sectors in providing infrastructure, in particularly transportation. Infrastructure and transportation is an area where the government has always been deeply involved, if only because everyone recognizes that quality infrastructure is important to the smooth functioning of an economy. But the nature of that relationship has been changing and evolving. At times government has served as the direct owner and operator of infrastructure and at other times the government has been more of a promoter and regulator of private providers of infrastructure. So the question about when the government ought to provide and when the government ought to promote and regulate instead is a very important one, and thinking about the circumstances under which private involvement is both economically sensible and politically acceptable is a major theme.

The second issue that interests me is urbanization of infrastructure. If you think about cities and why cities are growing all over the world it’s because that’s where the high-paying jobs are. People are more productive when they’re closer together. But these concentrations of people cause all kinds of problems: cause competition for centrally located sites, cause congestion, cause flooding and pollution as more and more of the metropolitan area’s surface is paved over. It’s really infrastructure that makes cities possible and makes the congestion tolerable, makes sure that we have clean water so that we don’t have cholera outbreaks, makes sure that we have drainage so that our cities don’t flood during the rain.

Thinking about how to pace the infrastructure with the urbanization to make sure that one doesn’t grow faster than the capabilities of the infrastructure is an important problem as well, especially in developing countries.

Q. Are there interesting or hopeful trends that you’re seeing around some of these challenges?

Gomez-Ibanez: I think on the question of the appropriate mix of responsibilities of public vs. private, a kind of a balanced perspective has emerged. In the 1940s, ‘50s and ‘60s, for many countries public provision seemed to be the way out, and in many countries they nationalized their infrastructure and utilities. Then, after some disillusionment with that idea set in, in the ‘80s and ‘90s there was a big move to privatize and the pendulum swung the other way.

I think people are now more thoughtful and willing to accept that both the public and private sectors have important roles to play and that there is no solution that’s right for all contexts and places. I think in terms of the cities, it’s a little more challenging and difficult because the scale of this urbanization is so rapid that it outstrips the resources of most of these communities to deal with it. And there are real governance problems. You’re talking about the mayors of cities who may not be very sophisticated and who may not have a lot of financial capabilities or a capacity to solve problems. Some countries are doing better than others, like China. China is aided by the fact that the state essentially owns all the land in the metropolitan areas and can use land sales as a method of financing infrastructure. Many other countries do not have that luxury and keeping up is becoming a real problem for them.

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