India's urbanization trends

Excellent graphics from the recently released IIHS report (pdf here) on Urban India 2011. If we take into account larger villages, half of India's population is already living in urban areas or in areas with similar conditions.

Contrary to conventional wisdom, natural urban gorwth and not migration from rural areas is the major cause of urban population growth.

Despite the increasing importance of cities, urban development remains someway off from the mainstream development radar. The graphic below accurately captures the development priorities of governments in India. The Eleventh Plan (2007-12) allocation to various sectors reveals the low priority for urban development.

Cars and two-wheelers constitute 86% of all vehicles on the road, while accounting for just 29% of all trips. Walks and public transport together form 54% of all trips made. The case for massive investments in public transport is most compelling.

The High Powered Expert Committee (HPEC) appointed by the Planning Commission to estimate the financial requirements of cities has estimated that transportation requirements would form the major share of funds requirement for our cities in the 2012-31 period. However, the major focus of JNNURM has been on water supply and urban housing. In some sense, this is encouraging since it means that the funds requirement for providing the basic non-transport urban infrastructure - sewerage and water supply, solid waste management, and storm water drains - is a small share of the total estimated requirement.

Excellent snapshot (click to enlarge) of the cornucopia of urban social safety programs.

 

Despite the increased pace of urbanization over the past two decades, the share of informal employment as a share of total urban employment has remained stable in the 80% range. Jobs in trade and surprisingly, manufacturing, have been largely confined to the informal sector. 

Spatial clustering is defined as the ratio of the share of employment of a sector in an area divided by the national share of employment of that sector. Values greater than one signifies a relative clustering of that particular sector's employment in the particular region. The graphic below reveals a spatial clustering in the metros and million-plus cities for ICT services, high-tech industries, and fast-growing export sectors.

Why urbanization is environment friendly?

Two graphics from the recent Credit Suisse report on global urbanization trends shows how urbanization dramatically lowers carbon emissions from transportation. The first graphic shows trends from across the emerging world...

... while the second shows similar trend among US metropolitan areas.

The Mexico City BRT model

The Streetsblog has an interesting account of the history of public transport facilities in Mexico City. In the past quarter century, the City has seen its public transit system move from a predominantly publicly-run metro and high-capacity bus based system to one which came to be dominated by private micro-buses. Since 2006, a Bus Rapid Transit (BRT) system, the Metrobus, was started.

The Metro-buses have played an important role in transforming the Mexico City into a more lievable, sustainable, and healthy city. It has been spearheaded by Mayor Marcelo Ebrard whose six year term, about to end this year, has coincided with the start of the Metro-bus project. 



Historically, Mexico City has had a large high-capacity bus based public transport system. However, a wave of privatization policies in the eighties and nineties saw these buses give way to private micro-buses. In fact, whereas in 1986, 42% of trips in Mexico City took place on a high-capacity bus, it plummeted to just 10% by 1994.



The experience with private micro-bus was not satisfactory. The largely unregulated fleet of micro-buses reduced average traffic speeds, lowered road safety (buses competed to get customers and reach their destinations fastest), and increased pollution levels (due to old buses being used and lower average speeds). It also spawned a web of corruption, as these buses were run by political leaders and local syndicates. But things have been looking up since the introduction of the metro-buses through a public private partnership (PPP). Travel times have fallen considerably in the BRT routes and average traffic speeds have risen.



The implementation of Mexico City's BRT system has certain unique features which makes it an interesting case study. The BRT system replaced 1077 micro-buses, which were essentially family-run operations, in certain routes with about 300 metro-buses. The low-floor Metro-buses have their own dedicated lanes, and people pay fares on platforms while waiting so that the buses can move very rapidly. The city government oversees the Metro-bus program and financed the road and station infrastructure.

The government organized the micro-bus drivers, about 800 of them, into collectives and arranged loans for them to purchase these metro-buses. They operate the buses, use the revenues to maintain operations, and make decent profits. This Metro-bús business model of displacing existing micro-bus drivers and then hiring them as BRT rolling stock operating companies, with the government providing the fixed infrastructure, is an excellent example of PPP.

As part of its BRT project under the JNNURM, the Government of India had made it mandatory for cities to form Special Purpose Vehicles (SPVs), preferably involving private operators, to run the BRT fleet. However, the challenge with this arrangement is that most of these cities had state-run Road Transport Corporations (RTCs) operating highly profitable services on the proposed BRTS routes. Naturally, the RTCs were reluctant to cede rights over these routes. State governments saw a way out of the impasse by co-opting RTC as a partner, often the majority partner, in the SPV. This left the door open for RTC to exercise backdoor control of the new BRT system, thereby considerably diluting the rigour and effectiveness of its implementation.

It is no surprise that the biggest success with BRTS has come from those cities where RTC services were either absent or where public transport services were with the urban local body. In these places, the local body has been able to bring in external professional expertise and structure Special Purpose Vehicles (SPVs) that can effectively manage the BRT services.

Bicycle usage in Indian cities

The Muncipal Corporations of Vijayawada and Visakhapatnam are promoting bicycle use in an effort to reduce vehicular pollution and traffic congestion. Visakhapatnam has apparently introduced 'no motor vehicle' zones across 20 km of roads and plans to earmark cycling tracks on 100-feet roads to a width of about 8 feet in the central parts of the city. While these are laudable social and communitarian initiatives, its economic, and even environmental, benefits are questionable.

Here are a few observations

1. Bicycle use can reduce pollution and traffic congestion only if they displace other modes of transport in significant numbers. It is inconceivable, given Indian conditions, that car users will switch to bicycles, except maybe in small enclaves. Given the large commute distances involved, motorbike users are also likely to stay on with their vehicles. The sheer volume of road users in the larger Indian cities means that the impact on public transport due to bicycle users may be minimal.

2. While bicycles will certainly take that many people away from public transport (and to that extent reduce the demand for public transport), I am not sure whether it necessarily reduces traffic congestion nor is economically more efficient. For sure bicycles do not suffer from carbon emissions. But they take up more road space than public transport. If you have any doubt see this. Further, since bicycle commuters spend more time on roads than those using public transport over the same distance, the effective road space usage by bicycle users is much larger.

3. It is on grounds of economic efficiency that bicycles fail most glaringly, especially for Indian conditions. Most of the larger Indian cities are pretty expansive compared to the mid-sized European cities where bicycles are popular. Average commute distances are large enough to make bicycling unattractive. Weather is pretty harsh for most part of the year. In the circumstances, commuting to work, as opposed to taking public transport, increases the unproductive time spent on the road and takes its toll on productivity.

4. Earmarked bicycle lanes involve a trade-off on road space. That much road space becomes unavailable for all the other modes of transport. Any such earmarking can be effective only if we are able to displace enough motor vehicles (by making them switch over to bicycles) to make up for the loss in road space to bicycle lanes. However, as the aforementioned arguements suggest, this may not happen. In any case, given that most roads are narrow in our cities, it may not be practical to do such ear-marking in any meaningful scale.

In fact, if all the aforementioned assumptions hold true, then earmarked bicycle lanes would end up worsening traffic congestion. The effective road space usage per commuter will be higher with bicycle users. Average speeds will be reduced and fuel consumption will increase. Contrary to conventional wisdom, vehicular pollution will increase.

5. Bicycle lanes and promotional activities cannot succeed in a piecemeal manner over small road stretches. If the commuter has to travel the major length of his daily commute to work on mixed traffic, the marginal utility of any limited earmarking is likely to be minimal. However, it is possible that there are small stretches or surroundings which enclose both people's homes and their workplaces.

6. There is also the issue of traffic discipline and enforceability of bicycle lanes. In a country where regular motor vehicle lane driving and traffic discipline is the exception than norm, it may be a nightmare to enforce bicycle lanes. Unless there are physical barriers, it may not be possible to even keep motor vehicles out of these lanes. Similar lack of discipline among bicycle users could end up increasing accidents and lowering traffic speeds.

7. Finally, bicycle promotional policies should not be confused with pedestrianization programs. There is a compelling case for making certain areas, especially commercial and shopping centers, in many cities "motor vehicle free zones" for certain time periods daily, atleast during the night. Similar restrictions can be imposed on river and seaside roads so as to improve the quality of leisure environments. Bicycle usage promotion could go hand in hand with such pedestrianization programs. However, such programs are most likely to be predominantly pedestrianization programs where bicycle usage happens to be an incidental benefit.

I strongly believe that urban policy makers should instead spend their scarce energies and resources on improving transport infrastructure and public transport facilities.

Infographic of the year - Time Maps!

I am a strong believer in the use of graphic visualizations as decision support and to increase workplace productivity. Fast Company has a link to its selected 22 infographics of the year. The one that really stands out for me is the TimeMap created by Vincent Meertens.

TIMEMAPS from graphsic on Vimeo.

TimeMap is a visualization aimed at commuters that maps locations based on the time taken to travel to them from a particular location. It is dynamic and the shape of the map varies in response to changes in traffic and travel options. The currently available web version of TimeMap plots train travel times across Netherlands.

Load TimeMaps from anywhere in the country, and it automatically checks your location, shows the nearest train station, and charts trip times around the country in rings, with each colored ring representing another 30 minutes. Most importantly, the map is live. It grows and shrinks throughout the day, as travel times themselves grow and shrink; the bigger the map, the longer it’ll take you to get around... the map expands at night, when trains run infrequently or not at all, then contracts during the day, when trains run on their regular, zippy schedule. Track delays? The map grows again.

TimeMaps can be useful to generate maps for air and road travel times. One option would be to integrate mobile phone traffic data into the TimeMap application and generate real-time maps of traffic conditions and travel options in any city. Characteristics of the mobile phone data can be used to identify those used by road users and its mobility patterns can give information about road traffic conditions.

Such cognitively salient data visualization can provide excellent decision support for road users and help everyone optimize their travel times and thereby minimize traffic problems. The real-time nature of the information and its availability in the simplest form to its consumers will help them use it optimally and thereby generate the most efficient traffic outcomes.

Such visualization tools become potent traffic force multipliers in cities where commuters have multiple travel options. For example, the presence of good public transit system helps commuters effectively switch across different travel modes and travel routes to make their daily peak-hour travel decisions in a manner that would contribute towards optimizing traffic patterns.

The case for public transport!

The case for public transport (or bicycle use) needs no explanation!



(HT: Green Blog)

Nudging to use bicycles!

Excellent NYT op-ed on how Amsterdam has socialized and brought about a culture that accpets bicycle as the preferred mode of transport. The article drives home the point that such changes in public attitudes can be brought about through a series of small and often mundane interventions, all of which jointly work towards favoring bicycles and discouraging cars.

One such nudge, which revolves around the type of bread that is commonly sold in Dutch shops, is particularly cute.

"Cyclists can’t carry six bags of groceries; (so) bulk buying is almost non-existent. Instead of shopping for a week, people stop at the market daily. So the need for processed loaves that will last for days is gone."

Several such routine lifestyle decisions have contributed to a much greater accpetance of bicycles than in the US. The article also points to the deep-seated cultural socialization that European city residents have undergone which is reflected in internalization of bicycles into their regular daily routines.

"In Holland, public buses aren’t considered last-resort forms of transportation. And cycling isn’t seen as eco-friendly exercise; it’s a way to get around. CEO’s cycle to work, and kids cycle to school... Manhattan’s bike lanes seem to be used more for recreation than transport."

The counterfactual problem in public policy

Heads I win, tails you lose! This aphorism could well describe the debate on many intractable public policy issues, those where conclusive answers are difficult to come by. Supporters claim that it would have been worse without the intervention. Critics denounce the intervention as a failure since the problem persists. The challenge with all such issues is the difficulty of establishing the counterfactual. Let me illustrate this dilemma with three examples.

The most famous counterfactual problem of our times is the debate on the impact of expansionary policies implemented in the US in the aftermath of the Great Recession. Conservatives point to the persistent high unemployment rates and weak economic conditions, despite the extraordinary fiscal (more than $ 1 trillion) and monetary expansion (zero bound rates and $2.3 trillion QE), as conclusive proof of the failure of expansionary policies.

They reinforce their argument by pointing to the failure of the now infamous recovery projection, estimating future unemployment rates with and without a stimulus plan, made in January 2009 by Christina Romer and Jared Bernstein, then part of President Barack Obama's team. Their way-off-the-mark estimates suggested that unemployment would approach 9% without a stimulus, but would never exceed 8% with the plan.



In May 2011, using the latest figures available from the BLS, the unemployment rate reached 9.1%. In contrast to the Romer and Bernstein projections which estimated that the unemployment rate would be around 8.1% for May without a recovery plan, or 6.8% with a stimulus plan, the actual rate was 9.1%. The actual unemployment rate has been consistently above Romer and Bernstein’s worse case scenario for the economy – and by a considerable margin. Critics of the stimulus invoke this as proof of its complete failure. After all, though a massive and unprecedented monetary and stimulus was enacted, it appears to have had no impact in terms of improving the economic conditions.

Supporters of the stimulus in turn point to other statistics to put forward their claims about how the stimulus created employment, supported the poorest, propped up aggregate demand, and helped local governments. They argue that in the absence of the stimulus measures, the counterfactual, the economy would have plunged into a full-blown depression.

Further, economists like Paul Krugman have consistently held that the actually enacted stimulus policies have been severely deficient and have been advocating much larger doses of expansion to mitigate the high unemployment rate. In the absence of the required magnitude of expansion, they claim, it is unfair and incorrect to blame the expansionary policies for the economy languishing.

Such counterfactual problems are pervasive in economic policy making. This is especially so given the impossibility of localizing and quantifying the impact of specific policy interventions. In the circumstances, if the intervention fails to yield the desired result, critics will denounce it as a failure. Supporters will find that establishing the counterfactual, the scenario in the absence of the stimulus, is fraught with insurmountable difficulties.

Another example of such analysis is the debate about the benefits of metro-rail in New Delhi. Critics argue that despite the massive investments in the Metro, the Delhi traffic remains as bad as ever, even worse. This argument is made on the assumption that the Delhi Metro was set up with the objective of lowering traffic congestion in the city. Now that the final outcome shows no signs of traffic improvement, they argue, the Metro project has failed.

Supporters naturally point that without the Metro Delhi would been uninhabitable. They argue that the Metro has taken 1.7 million people out of the roads, and thereby ensuring that those many people stay out of city roads. They argue that the success of the Metro is a function of how many people it is able to attract and how fast its network expands. The persistent congestion is only a reflection of the fact that the Delhi traffic has been growing at a pace faster than even the growth in the Delhi Metro traffic.

Such criticisms are commonplace with infrastructure investments. They most often fail to produce tangible and immediate impact, and leaves all stakeholders unsatisfied. When the power deficit is a few gigawatts, the commissioning of a few hundred megawatts of power generation capacity has limited impact on the load-shedding situation. Similar situation arises with even major new water and sewerage treatment capacity expansion, since the requirements are massive. The problem is most acute with transportation, since traffic always appears to worsen. In the absence of any salient impact, municipal councils have no incentive to sanction scarce resources in such sectors.

Finally, the left-wing critics of economic liberalization in India point to the persisting high poverty rates and social deprivation and blame it on the neo-liberal policies of the past two decades. They argue that these policies have exacerbated social tensions, widened economic inequality, dismantled social and economic protections and therefore weakened the nation economically.

This too is a classic counterfactual problem. There are two issues here. One, serious commentators question the nature and extent of liberalization undertaken by successive governments, claiming that they have been too little and limited in scope and piecemeal and stop-start. In the absence of, leave alone the full breadth and scope, atleast even some reasonably acceptable level of liberalization, they argue, how can we blame liberalization for the current state of affairs?

Second, they argue that in the absence of this limited economic liberalization, the economy would have been in doldrums. They point to the undoubted macroeconomic gains of recent years as proof of this. How do we know what would have the state of affairs in the absence of the liberalization policies? See Ananth's excellent take on the critics of economic liberalization, including on other dimensions.

In all three cases - stimulus measures in the US, Metro railways in New Delhi, and economic liberalization in India - there is a classic cognitive bias at work, availability bias. People observe salient outcomes - the poor state of the economy, despite the stimulus spending; poor state of Delhi traffic, despite the Metro; and the persistent high poverty levels, despite economic liberalization - and conclude that these interventions failed to achieve the outcome. However, the reality clearly (albeit less so clearly in case of stimulus) points to all having had considerable effect in mitigating the respective problems, though the exact magnitude of their impacts is difficult to quantify.

Then there is another issue here. In all three cases, the opponents frame the debate by equating the particular intervention with the text-book case of the underlying concept. Accordingly, for example, they define the stimulus as was implemented in the US was the classic Keynesian stimulus, and therefore its apparent failure to get the economy out of the recession is conclusive evidence of the failing of the underlying Keynesian concept itself.

Similarly, critics' definition of the success of metro rail as measured by the resultant reduction in congestion rate, means that an actual increase in congestion is taken as proof of its failure. For neo-liberal critics, Manmohanomics is the embodiment of economic liberalization and since it did not "eliminate poverty", as promised, it has failed!

Contrasting tales of traffic management from both sides of the Atlantic

The prevailing traffic management paradigms on both sides of the Atlantic could not have been more contrasting. On the one side American cities are implementing policies that adapt cities to accommodate driving (by intelligent transport systems to improve traffic flow and apps to help drivers find parking spaces), while on the other hand European cities are creating environments that are hostile to cars (congestion pricing, outright car bans from green and pedestrian zones, closely spaced red lights, speed and parking restrictions, pedestrianization etc).

The strategies employed by European cities aims to make car use expensive and difficult and thereby force them into using other modes of transport. As a Times article writes, these policies complement inherent pedestrian friendly conditions,

"Built for the most part before the advent of cars, their narrow roads are poor at handling heavy traffic. Public transportation is generally better in Europe than in the United States, and gas often costs over $8 a gallon, contributing to driving costs that are two to three times greater per mile than in the United States... European Union countries probably cannot meet a commitment under the Kyoto Protocol to reduce their carbon dioxide emissions unless they curb driving. The United States never ratified that pact. "

Over the past two decades, there have been a marked shift towards policies that seek to make cities more inviting, with cleaner air and less traffic. In cities like Zurich, carless households have increased from 40 to 45 percent in the last decade, and car owners use their vehicles less. A stunning 91 percent of the delegates to the Swiss Parliament take the tram to work! Shopping malls and business districts have limited parking lots, thereby incentivizing people to get there on public transport.

Further, even as American cities try to synchronize green lights to expedite traffic flow, European cities have been shortening the green-light periods and lengthening the red light times so as to reduce waiting times for pedestrians. In stark contrast to countries like US and India which stipulate minimum parking space for apartment units and new buildings, building codes in Europe cap the number of parking spaces in new buildings to discourage car ownership. Store owners in Zurich who had worried that road closings and pedestrianization would reduce business have been pleasantly surprised to see 30-40% increase in pedestrian traffic.

Edward Glaeser opposes restrictions that bar drivers for the sake of barring driving (multiple red-lights etc) and favors policies that internalize the social costs (congestion fees, higher parking fees etc). Alex Marshall argues that "a city more oriented around walking, biking and transit is more desirable place to live and work".

Apart from an enabling policy framework, one of the most important but less discussed reasons for Europe's success with policies that restrict car usage is the very high marginal conformity to these restrictions among its citizens. In other words, once regulations are put in place, very few people jump red lights, stray into congestion and pedestrain zones, over-speed or not stop for pedestrians, or park their vehicles illegally.

In contrast, in countries like India, such violations are more common than observance of rules. As I have blogged earlier, the deterrent effect of enforcement acts mainly at the margins, on that minority who are most likely to violate, while it becomes ineffective when the majority are violators. Such violations persist because of their convenience - minimal or no costs, ease, socialization, inaccessibility to alternatives etc.

Having said that, it cannot be an excuse for lax enforcement. Some policies like high parking prices, pedestrianizing certain areas, restricting car usage into city centers at peak times etc, which are relatively less difficult to enforce should immediately form part of any meaningful attempt to reduce traffic congestion.

In any case, in the absence of good, world class, and affordable public transit systems, any set of policies aimed at restricting car use anywhere in the world, while laudable, are certain to fail. Whatever else central, state and local governments in India does to contain traffic congestion, massive investments in world class public transit is a sine-qua-non.

Overcoming the moral hazard from contract renegotiations

I had blogged earlier about the increasing trend of contract renegotiations in infrastructure concessions and the moral hazard generated by it. Such re-negotiations generate inefficiencies in multiple dimensions.

Assured of the possibility of re-negotiations, bidders offer excessive bids to win the tender. This often screens out the best developers or operators who lose out to those with the political muscle to wring out favorable terms during re-negotiations. More importantly, it results in considerable cost escalation, as the re-negotiated terms are certain to be in favor of the bidder. In simple terms, re-negotiations fritter away the efficiency and cost-effectiveness gains that come from a competitive bidding process.

This assumes significance in view of the decision of National Highways Authority of India (NHAI) to focus more on BOT Toll contracts instead of annuity concessions. BOT Toll concessions carries the risk of over/under-estimation of traffic, which in turn often opens up contract re-negotiations. Experience from such re-negotiations show that they are neither transparent nor conclusive. The controversy surrounding the re-negotiations of the Delhi-Noida Toll Bridge is a case in point.

In this context, a recent report on infrastructure public private partnerships (PPP) in the US advocates the use of present value of revenues (PVR) contracts as a means to mitigate the risk of contract renegotiations. Such renegotiations are common in infrastructure contracts which are financed with service fees, like tolls and user charges. The demand (or traffic) risk associated with such contracts is generally borne by the bidders, who cite the shortfalls to re-negotiatee contracts.

It is in this context that flexible-term contracts like PVR contracts assume relevance. In a PVR contract, the regulator sets the discount rate and the user-fee schedule, and bidders bid the present value of the user fee revenue they desire. The firm that makes the lowest bid wins and the contract term lasts until the winning firm collects the user fee revenue it demanded in its bid.

If the demand is lower than expected, the concession period is longer, and vice-versa. The resultant elimination of demand-side risks reduces the risk-premiums demanded by the concessionaires and would attract investors at lower interest rates. The UK was the first to use such variable term contracts, for the Queen Elizabeth II Bridge over the Thames River and the Second Severn bridges on the Severn estuary. Both contracts will continue till the toll collections pay off the debt issued to finance the bridges and are predicted to do so several years before the maximum franchise period.

Chile used a PVR auction to contract out the improvement of the Santiago-Valparaíso-Viña del Mar highway in 1998. It has since adopted PVR auctions as the standard to auction highway PPPs.

The report points to two other important advantages with PVR. One, it provides for a natural fair compensation payable, if the government decides to terminate the contract early. It can buy out the franchise by paying the difference between the winning bid and the discounted value of collected toll revenue at the point of repurchase (minus a simple estimate of savings in maintenance and operations expenditures due to early termination).

Second, unlike fixed term contracts, variable term contracts are especially useful in urban highways, where ex-ante fixation of tolls carries considerable risks - either too high (which causes under-utilization and reduces revenues) or too low (which results in over-use and congestion, generates a windfall for the concessionaire, and distorts his incentive to make investments in improvements). In a PVR contract, the regulator could set the toll rate efficiently to alleviate congestion (by raising or lowering it), without causing any harm to the concessionaire.

Apart from highways, port infrastructure, water reservoirs, and airport landing fields are natural candidates for a PVR. However, the real world risk with PVR contracts is the possibility that regulators will be forced into keeping user fees or toll rates low for political considerations (to not alientate the voters). This would generate sub-optimal outcomes, with the concessionaire having a longer than optimal concession period.

Optimizing transportation networks

I have blogged earlier about this (pdf here) fascinating study of unco-ordinated transportation systems by Hyejin Youn, Michael T. Gastner, Hawoong Jeong. They analyzed the 246 road links and 88 nodes of Boston's transportation network and their conclusion is striking and has significant lessons for urban transport planners,

"Uncoordinated individuals in human society pursuing their personally optimal strategies do not always achieve the social optimum, the most beneficial state to the society as a whole. Instead, strategies form Nash equilibria which are often socially suboptimal. Society, therefore, has to pay a price of anarchy for the lack of coordination among its members. Here we assess this price of anarchy by analyzing the travel times in road networks of several major cities. Our simulation shows that uncoordinated drivers possibly waste a considerable amount of their travel time. Counter intuitively, simply blocking certain streets can partially improve the traffic conditions. We analyze various complex networks and discuss the possibility of similar paradoxes in physics."

They find that contrary to conventional wisdom, the interaction of utility maximizing road users do not result in optimal traffic outcomes. Transportation flows can in reality be far from optimal even if all individuals search for the quickest paths and if complete information about the network and other users’ behaviors is available. In other words, "traffic networks can be inherently inefficient". In a game theoretic framework, they find that the Nash equilibrium (arising from self-interested road use decisions of driver) is different from the social optimum (minimized cost to society per unit transport time).

The study highlights the importance of the Braess Paradox which states that adding capacity to a network in which all the moving entities rationally seek the most efficient route can sometimes reduce the network’s overall efficiency. The graphic below highlights how certain road links add to traffic congestion due to drivers propensity to selfishly optimize on their travel times (which ironically enough, in turn results in higher travel times for the collective).



In many respects, urban transport market is a classic free-market of vehicle and road users - completely unregulated, but rife with information asymmetry (among drivers). Which routes to use and which to not use at any point in time? Which routes are best traversed through public transit as opposed to private vehicles? Which roads can be made one-way? How do we regulate vehicle flows in a road circuit?

The larger lesson it conveys to urban transport planners is about the importance of co-ordination among vehicle-users in reducing traffic congestion. Such co-ordination can be achieved by both bridging the information asymmetry between drivers and through interventions to optimize flows within transport networks.

In the prevailing "build your way out of traffic congestion" paradigm, there is very little attention paid to bridging this information asymmetry and scientifically optimizing the configuration of traffic flow networks. It is therefore not surprising that, like other unregulated free-markets, market failures (manifesting as traffic congestions) abound in this market.

The challenge of traffic management

One of the biggest concerns with traffic management in urban centers is the explosive growth in vehicle population, far outpacing the growth in road network expansion.

The standard bureaucratic solution to addressing this challenge is to widen roads and build fly-overs. This is understandable, since it is the easiest solution to implement and generates immediate benefits, atleast for some time. In fact, it is even necessary, since it is important to realize the fullest available carriageway. However, on a longer-term perspective, such measures are only kicking the can down the road.

As has been the experience from across the world and in our own cities, any road expansion triggers off the cliched Parkinson's law. Supply creates its own demand. More carriageway immediately attracts more vehicles.

Any sustainable solution to traffic management requires demand-side measures that encourages public transport usage, discourages private vehicles, and enables human beings to make rational decisions about their travel plans and road usage. An appropriate mixture of these interventions can improve traffic management.

The first requires massive investments in public transit systems and their careful integration with all other modes of transport, public and private. It is as much an exercise in urban planning as transport management. In this context, it is also important to bear in mind that, as experience from across the world shows, such investments have to be heavily subsidized. Most importantly, a good public transit system is a pre-requisite for the success of all other demand side interventions.

Across the world, a large number of countries have experimented with a slew of initiatives to discourage the usage of private vehicles. They have included measures to both make vehicle ownership and usage expensive. For more than two decades, Singapore has a policy that mandates that all vehicle owners have a Certificate of Entitlement (COE). As part of this policy, quotas restrict the number of new cars (to maintain only a certain level of vehicle growth) and vehicle owners have to buy COE permits in auctions. The high COE permit auction rates act as a prohibitive tax on vehicle ownership.

Similarly, in China, faced with exploding vehicle population, Shanghai has for several years now been conducting monthly "license plate auctions". In a reflection of the growing demand for vehicles, bid rates have averaged a record 46,000 yuan ($6,900) in recent times.

Buoyed by Shanghai's success, Beijing recently adopted a lottery system to issue car license plates. It even goes beyond Shanghai and mandates that new registrations are only being given to only those who have paid tax and social insurance in the city for more than five years. Further, cars licensed in other parts of China are now forbidden from driving during peak hours in the capital’s main urban area. All this will restrict registrations to just 240,000 additional vehicles in 2011, a third of the current annual level, and is estimated to take 10 m potential buyers out of the market.

Singapore, London, and a few other European cities have sought to levy congestion charges in certain high traffic density areas to dis-incentivize vehicle usage there at certain times. Many Chinese cities like Guangzhou, Shenzhen and Hangzhou are now toying with congestion charges. Policies that seek to internalize the parking charges are another approach to limit vehicle usage, atleast in certain areas and certain times. Cities like London, Hong Kong, and New York, with their heavy parking fees, impose a huge premium on private vehicle usage. Some Chinese cities like Ningbo are even considering forcing citizens to own a parking space before they can buy a car.

Some of the Latin American cities have experimented with barring odd and even-numbered vehicles on designated week-days. Car-pooling has for long been a favorite in many parts of the US (though it is now going out of favor in many areas).

Finally, it is important to provide people with information about traffic conditions in the most readily usable manner. This will help them make rational decisions on effective road utilization. In many respects, road traffic has striking similarities with a free market. Consumers base their decisions to purchase goods and services based on price, quality, and some other parameters. Similarly, people make their travel plan, route and vehicle usage choices, subject to certain constraints - parking charges, vehicle usage costs, traffic intensity at the time etc.

Like in the free-market, it is possible to generate more efficient traffic outcomes, if people are provided with traffic-related information in the most appropriate manner. This does not mean flooding people with all available information, but channeling it in a cognitively salient and easy-to-use manner. This makes easy for people to make choices that can optimize on their travel times and therefore improve traffic management.

Intelligent traffic management systems, that use technology-intensive devices, which are integrated to each other, can be very effective in effective rendering such information.

More highways and flyovers do not solve traffic problems

The commonest solution to addressing urban transport problems is to expand the road space - either build new roads or widen them or construct fly-overs and elevated express-ways. Planners project it as neat and logical, politicians see it as populist, consultants and contractors view them as cash-cows and people find it sexy. Everyone loves it, atleast in its immediate aftermath.

However, as this post points out, there are serious limitations to this approach. Matthew Philips writes,

"Studies over the last decade (like this one, this one, and this one; plus the book Suburban Nation) have pretty much dismantled the theory that more roads equal less traffic congestion. It turns out that the opposite is often true: building more and wider highways can increase traffic congestion."

Consider the evidence from the US. A 1998 Surface Transportation Policy Project titled "If you Built it, They Will Come: Why We Can’t Build Ourselves Out of Congestion" found that 90 percent of new urban roadways in America are overwhelmed within five years. Another study of 70 urban areas across 15 years concluded,

"Metro areas that invested heavily in road capacity expansion fared no better in easing congestion than metro areas that did not. Trends in congestion show that areas that exhibited greater growth in lane capacity spent roughly $22 billion more on road construction than those that didn’t, yet ended up with slightly higher congestion costs per person, wasted fuel, and travel delay... On average the cost to relieve the congestion reported by TTI [Texas Transportation Institute] just by building roads could be thousands of dollars per family per year."

Another study on the possible impact of the expansion of Washington's highway network finds it unlikely to result in a significant reduction in congestion on the state's roads.

"Academic research and practical experience have demonstrated that increases in highway capacity lead to increases in vehicle travel-reducing, or in some cases negating, the congestion-fighting benefits of the projects."

It suggests increasing investment in transit services and other transportation alternatives, improving the efficiency of existing highways and removing bottlenecks, and ultimately reducing the growth in vehicle-miles traveled (VMT) on the highways. A study by the Texas Transportation Institute finds,

"The effect of lane mile additions on VMT growth is forecast and found to account for about 15% of annual VMT growth with substantial variation between metropolitan areas. This effect appears to be closely correlated with percent growth in lane miles, suggesting that rapidly growing areas can attribute a greater share of their VMT growth to growth in lane miles."

See more evidence from the US on the futility of building (by roads) your way out of congestion in this exhaustive op-ed. This video is an excellent summary of the impact of fly-over demolitions on traffic

Moving Beyond the Automobile: Highway Removal from Streetfilms on Vimeo.

None of this is to argue against road widenings and fly-overs. Given the population sizes involved, municipal governments will be forced to maximize on road carriage-way through widenings and fly-overs. However, as these examples show, we have to be wary of seeing them as part of long-term urban transport problems. A fresh supply of road carriage-way, it appears, creates its own demand!

The BRTS capital of the world faces a reality check?

Last decade, many Latin American cities, led by Bogota in Colombia, had successfully pioneered the use of innovative bus transit systems that have been catalysts for the economic transformation of these cities. The Bus Rapid Transit System or BRTS, with dedicated bus lanes, became the rage of urban planners across developing countries. It was held up as an environment friendly model to address the chronic urban traffic problems of the exploding cities in developing countries. And it was far cheaper than the fancy subway systems. The Times describes the BRTS,

It is more like an above-ground subway than a collection of bus routes, with seven intersecting lines, enclosed stations that are entered through turnstiles with the swipe of a fare card and coaches that feel like trams inside... To create TransMilenio, the city commandeered two to four traffic lanes in the middle of major boulevards, isolating them with low walls to create the system’s so-called tracks. On the center islands that divide many of Bogotá’s two-way streets, the city built dozens of distinctive metal-and-glass stations. Just as in a subway, the multiple doors on the buses slide open level with the platform, providing easy access for strollers and older riders. Hundreds of passengers can wait on the platforms, avoiding the delays that occur when passengers each pay as they board.

Bogotá’s TransMilenio BTRS has been central to a dramatic transformation of Colombia's once drug-war torn capital city. In 2009, the TransMilenio was used for an average of 1.6 million trips each day, and has allowed the city to remove 7,000 small private buses from its roads, reducing the use of bus fuel — and associated emissions — by more than 59% since it opened its first line in 2001. In fact, thanks to its extensive route system, TransMilenio moves more passengers per mile every hour than almost any of the world’s subways.

Apart from its affordable and easy to implement nature (Subways cost more than 30 times as much per mile to build than BRTS, are three times as much to maintain, and can be built more quickly), the BRTS is the most environment friendly of transport interventions. As the graphic below shows, it has the lowest per capita emission rate, and can make a serious dent on the smog that envelopes most major cities across the developing world.



As the Times pointed out, TransMilenio success came with several important complementary policies,

"The negative stereotypes about bus travel required some clever rebranding. Now upscale condominiums advertise that they are near TransMilenio lines. People don’t say, ‘I’m taking the bus,’ they say, ‘I’m taking TransMilenio'... Free shuttle buses carry residents from outlying districts to TransMilenio terminals... Bogotá removed one-third of its street parking to make room for TransMilenio and imposed alternate-day driving restrictions determined by license plate numbers, forcing car owners onto the system."

However, underlining the complexity of the challenge facing urban transport planners, a recent Times article points out that TransMilenio may have become a victim of its own popularity. It is now hobbled by long waiting lines, overcrowded buses and delays and corruption in building new routes, and has also become a setting for armed robberies and violent protests. Most critically, it faces the challenge posed by the exploding private vehicle population of the city. Vehicle sales in Bogota surged to 25,527 in February, a 51% jump from the same month a year earlier, worsening its traffic jams.

Bogota is only the latest example of cities which have struggled with the complex challenge of urban transport despite apparently successful transport policy interventions. Many emerging economy cities build fly-overs, widen roads, by-passes, establish meto-rail lines, or improve traffic signalling integration that provide immediate relief. However, it is rarely long before the same problems re-surface. It is therefore worth reiterating for the upteemth time that any sustainable solutions to urban transport has to involve a comprehensive package of interventions as highlighted above.

Visualizing air traffic

This computer simulation by Zhaw shows worldwide commercial flights over a 24-hour period. Watch as flights start in the morning in the western hemisphere, and as the sun starts to come up in the east, more flights begin in the east.

Tráfico Aereo Mundial en 24 horas from hangtheguille on Vimeo.

(HT: Flowing Data)

China's high speed rail march stumbles?

China's spectacular $300 bn high-speed rail projects of the past decade has to rank as one of the most breathtaking infrastructure achievements of the last half century. It has been staggering not only in its sheer scale, but also in the pace at which it has been executed. As the graphic below shows, in a matter of five years China has destroyed all competition and has emerged as the unquestioned global leader in this cutting edge sector.



However, as a recent Washington Post article highlights, the success is fast tuning sour. For a start, the pay-back time on debts incurred to finance the projects has arrived and the Ministry of Railways is left with a whopping $271 billion in debt. Ticket sales and other revenue streams are hardly enough to cover the massive $27.7 bn in debt service for 2011 itself. Tickets priced at two to three times the regular rail ensures that ridership is poor.

However, of even bigger concern are question marks over safety and reliability. Contractors have been accused of colluding with officials and skimming off tax payer resources by using cheap, low-quality concrete and equipments. Tales of corruption abound, with even the Head of Ministry of Railways getting sacked.

As the Post article writes, Chinese high-speed rail will soon require government bailout. In this it is following the experience elsewhere, which conclusively shows that such projects are rarely fully viable commercially. Japan’s bullet trains needed a bailout in 1987. Taiwan’s line opened in 2007 and needed a government rescue in 2009. In France, only the Paris-Lyon high-speed line is in the black.

High-speed rail networks, with speeds of upto 350 km/hr, can deliver competitive advantage over airline for journeys of up to about 3 hours or 750 km, particularly between city pairs where airports are located far from city centres. Construction and rolling stock capital costs typically range from $35-70 million per km, depending on the complexity of the civil engineering work, rolling stock capacity etc. A World Bank report on high-speed rail writes,

"Governments contemplating the benefits of a new high-speed railway, whether procured by public or private or combined public-private project structures, should also contemplate the near-certainty of copious and continuing budget support for the debt. A developing country must reasonably expect atleast 20 million passengers/year with significant purchasing power, just to have the possibility of covering the working expenses and interest costs of providing that capacity with high-speed service; and probably double that number of passengers to have any possibility of recovering the capital cost.

In summary then, high-speed rail is now a tried and tested technology that delivers real transport benefits and can dominate market share against road and airline transport over the medium distances that many inter-city travelers confront. However, the demographic and economic conditions that can support the viability of high-speed rail are, in global terms, limited. The number of passenger transport corridors of the requisite length, that are already capacity constrained, and where there is sufficiently dense potential demand by people of adequate purchasing power, is limited; some may be in countries where the implementation capacity may be lacking."

Update 1 (23/6/2011)

Excellent Times story captures the benefits of light-rail network for China's economy,

"Around China, real estate prices and investment have surged in the more than 200 inland cities that have already been connected by high-speed rail in the last three years. Businesses are flocking to these cities, now just a few hours by bullet train from China’s busiest and most international metropolises.

Meanwhile, a shift in passenger traffic to the new high-speed rail routes has freed up congested older rail lines for freight. That has allowed coal mines and shippers to switch to cheaper rail transport from costly trucks for heavy cargos. Because of this shift, plus the construction of additional freight lines, the tonnage hauled by China’s rail system increased in 2010 by an amount equaling the entire freight carried last year by the combined rail systems of Britain, France, Germany and Poland, according to the World Bank.

The bullet train bonanza, and the competitive challenge it poses for the West, is only likely to increase with the opening of the 820-mile Beijing-to-Shanghai line, which will create a business corridor between China’s two most dynamic cities. The railway ministry plans 90 bullet trains a day in each direction."

The new, high-speed lines owned by joint ventures between the rail ministry and provincial governments, have also generated criticism for high costs and pricey fares, the quality of construction and corruption, and huge bank loan exposures. From Changsha to Guangzhou, the one-way fare in economy class for the two-hour journey, at speeds of up to 210 miles per hour, is 333 renminbi ($51). That is comparable to a deeply discounted airfare, but expensive for a migrant worker from Hunan who might earn only $160 to $400 a month in wages in Guangzhou. The same trip takes nine hours on an older, diesel train. But it costs only 99 renminbi ($15).

Reinventing the Wheelchair

Reading Scientific American this morning I spied the innovation that won their annual World Changing Ideas Video Contest: the Leveraged Freedom Chair designed by MIT Mobility Lab.

It's a three-wheeled human-powered wheelchair that goes faster than normal and also navigates difficult terrain—rutted roads, cobblestones, trash-strewn slums. The genius resides in the vertical hand levers: Users simply grab higher or lower depending on how much torque or speed they need. It's like being able to change gears.

The drivetrain consists of common bicycle parts and so is "manufacturable and repairable anywhere in the developing world," according to MIT. Sometimes low-tech solutions are the most appropriate.

Reclaiming Public Streets as Livable Space

Transportation Alternatives Executive Director Paul Steely White spoke at TEDxEast about ongoing campaigns to reclaim urban commons from the automobile. Cities are built for human contact and interaction, he said, which is thwarted when everyone sits behind a windshield. Streets that focus on the automobile also run counter to the density that makes cities interesting and efficient. "We are squandering the most valuable real estate in the world giving this public asset to the lowest density mode of transportation," said White.

The mandate for rearranging our urban landscape becomes clear when we grasp the global trends in population and urbanization: "Here in New York the streets comprise about one-fourth of the city's total land area, 80 percent of our open space. What happens in the space between buildings in the next 20 years is going to determine to a large degree how much carbon we emit, what our quality of life is, how often we talk to our neighbors and engage in civic discussion, how happy we are even."

Send A Colleague to Copenhagen

I won't be attending the Copenhagen climate conference but my colleague David Kroodsma still has a shot to do so if he wins the Huffington Post contest to send a citizen journalist (You can vote for him here). David is a writer, climate-energy expert, and bicycle adventurer with degrees in physics and climate science. He and I met last year on the Climate Ride while we were traveling to Washington to lobby for clean energy. Prior to that, David bicycled across North and South America to raise awareness of global warming and he has since documented his journey in a forthcoming book.

I spoke with David recently about the city of Copenhagen and how one-third of commuters there use bicycles. Below is an excerpt from his book where he talks about the choice world cities face: They can either copy Copenhagen, or they can copy American cities such as Los Angeles. The excerpt is from his chapter on Colombia. David visited Bogota and saw how investments in public transportation and bicycle infrastructure have helped to reduce carbon pollution and make the city a more pleasant place to live.

Something else remarkable has happened in Colombia over the past decade: the country has reduced its carbon dioxide pollution. Some of this reduction has been because of an increase in hydroelectric power—eighty percent of the country's electricity comes from dams—and a decrease in coal-fired power. But the Transmilenio [the public transit system] and bikeways have also had a serious effect, perhaps decreasing Bogotá's pollution by over half a million tons of carbon dioxide a year and cutting Bogotá's total pollution by a few percent. Car use in Bogotá has dropped significantly, and nearly twenty percent of daily trips are via the Transmilenio, an efficient service that didn't even exist a decade earlier. Bogotá shows that reducing pollution often has ancillary benefits. The city didn't set out to reduce pollution. The city set out to make itself more livable, and consequently reduced fossil fuel use.

If cities in the developing world decide to copy Bogotá, how big of a difference would it make? In the next thirty years, almost all growth in greenhouse gas pollution is expected to come from developing nations such as Colombia—nations where living standards are rising rapidly. Cities in these countries are growing rapidly, and decisions made today will decide the transportation infrastructure for decades to come.

A city like Bogotá could look to U.S. cities like Los Angeles where the majority of commuters drive, or they could look to European cities such as Copenhagen where transit is evenly divided between personal automobiles, public transportation, and bicycles. Whereas the average citizen of Los Angeles produces about five tons of carbon dioxide per person through transportation, the average citizen of Copenhagen is responsible for less than one and a half tons per person from transportation.

Half of the world's population now lives in urban areas, and the difference between these cities copying the transit system of Los Angeles versus copying the transit system of Copenhagen is thus a difference of about 10 billion tons of carbon dioxide. Given that global carbon dioxide pollution from fossil fuels is roughly 30 billion tons today, the difference between a world of Los Angeleses and Copenhagens is dramatic.

Here is David's video for the HuffPo Hopenhagen contest. Don't forget to vote:

Resilient Cities

I just attended a hopeful presentation by Australian urbanist Peter Newman on his concept of Resilient Cities. We're at the toxic intersection of several trends: peak oil, global warming, and scattered, car-dependent residential growth fueled lately by subprime mortgages. According to data he presented from the UK Industry Taskforce on Peak Oil and Energy (Nov. 2008), "the underlying trend in the price of oil is 6 percent growth per year." Combine this with the IEA's recent World Energy Outlook that says the "natural annual rate of [oil output] decline is 9.1 percent from 2009" and it becomes pretty obvious that massive changes in our energy and transportation infrastructure and technology are around the bend.

Newman lists four courses the modern city may take:

Collapse: It's happened before and could happen again. Newman cited the ancient examples of Ephesus and Babylon, and while total abandonment seems less likely in today's world, a tour through Rust Belt American cities such as Gary, Indiana, should suffice as a warning of potential decay.

Ruralization: Food production moves to the cities somewhat, as happened in Havana when the Soviet Union cut off energy supplies. Total ruralization with every apartment complex growing its own food seems unlikely because it would disrupt the whole logic of the city as an opportunity factory.

Division: Wealthy eco-enclaves will coexist with and be surrounded by Mad Max suburbs. This is a highly probable outcome if market forces play out sans smart urban and regional planning. This pattern is already prominent in the developing world where gated communities abut slums.

Resilience: Combining all the dream elements of renewable energy, distributed systems, smart grids, carbon neutrality, and sustainable transport, resilient cities are basically environmental utopias--only impossible if viewed as overnight projects. Alone among these four types, resilient cities are founded on hope not fear, though division, ruralization, and collapsing neighborhoods may all accompany the transition to resilience.

Newman focused today on the fact that land use follows transport, thus illustrating the importance of public transit-oriented development. His sense is that the stimulus and transportation initiatives of the Obama era must move dollars from freeway construction to sustainable options. Spending $100 million per mile on a freeway, as Houston did, seems like Stone Age economics at this point.

I suggested to him that transition to high gas mileage electric vehicles (100+ mpg) might forestall investment in public transit, but he seemed optimistic that, given the bigger picture of climate change pressuring the economy, plug-in cars and vehicle-to-grid technologies will prove a win-win situation. Let's hope he's right.