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The Four E's--Part One

Uploaded: Jul 13, 2015

The Four E's—Part One

Some of my work involves the evaluation of large public projects such as air quality and emission reduction policies, transportation investments and land use policies. The agencies that do the evaluations usually include information on the 4E's—Economy, Environment, Equity and Efficiency. I believe in them. But believing that we need to balance four priorities pushes one away from extreme or one priority only solutions that many people believe strongly are the right way to go. This blog is about some of these examples and potential conflicts.

So, for example, the California Air Resources Board (ARB), in charge of state policies to reduce greenhouse gas emissions, conducts analysis on the impacts of these policies on the overall Economy (I help with reviewing these analyses) and on emission reductions and other environmental impacts (Environment). But the ARB also considers the impact of policies on various groups (Equity) and commits resources from the cap and trade revenues to reduce environmental impacts and help low income residents and communities. And in developing emission reduction alternatives the ARB looks at the Efficiency of policies in relation to costs.

Similarly the South Coast Air Quality Management District develops and evaluates air quality regulations in Southern California. Under law, they are required to conduct an analysis of the impact of these policies on the overall economy, on individual industries, groups of residents and on communities. They have a social equity stakeholder group. Also by law they are required to rank alternatives in terms of cost effectiveness.

Regional land use and transportation agencies like ABAG/MTC and their Southern California counterpart SCAG evaluate the impact of their policies on the overall economy, on the environment, on groups and communities and, especially for transportation investments, look at the cost effectiveness of alternatives. They, too, have a social equity stakeholder group.

In this work the agencies deal with advocates who work 24/7 for their cause, whether it be global warming, concern for low income residents and communities or their industry. I have friends who do the same.

These different perspectives can bring conflict. The Governor has a strong commitment to reduce greenhouse gas emissions and a deep concern about global climate change. But his policies take the economy, equity and effectiveness into account. He has a strong commitment to help low income residents and communities. But his priorities also include a strong economy and concern for impacts on the state budget. He is trying to develop additional funds for subsidized housing (and has allocated cap and trade funds for this purpose) but also understands that our housing shortage and affordability crisis affects the economy and many residents who have incomes well above the poverty level.

In this series I am going to explore how these four priorities—Economy, Environment, Equity and Efficiency appear to me in state and local policy choices.

I will start with a few personal statements. I support the efforts to reduce greenhouse gas emissions and improve air quality. But, because I care about efficiency (which also includes impacts on taxpayers), I have not so far been convinced that the High Speed Rail project makes sense or that Bus Rapid Transit on El Camino makes sense. I would like to reduce auto use but for me it must make economic sense including counting environmental impacts.

The TMA committee in Palo Alto is examining policies to reduce single occupancy travel into downtown and at the last meeting, they seem to take both economic effectiveness and equity into account. We shall see what they come up with but I came away optimistic. And I hope they start with a pilot project to see whether we can induce commuters to avoid single occupancy driving and parking demand before committing large sums of money or raising expectations.

Similarly, I hope Palo Alto can develop a high level of service shuttle system but I have no idea whether the ridership is there. I would try a pilot program. My concern with high speed rail ore El Camino BRT, on the other hand, was that in the absence of strong evidence, very large sums are committed or proposed.

On the other hand sometimes multiple priorities are aligned but old ways of thinking get in the way, at least in my perspective. Part 2 will make the case that a strong economy is better in most respects than a weak economy and that because businesses face a challenge in recruiting talent, that they have become leaders in advocating for investments in transportation and a clean environment and for policies that expand the supply and affordability of housing. So, while my clients are public agencies and I defend most environmental regulations against attacks by industry groups, I do not think businesses are inherently or usually evil or greedy. Rather I view them as partners with whom the public sector should respect even as they bargain hard for reasonable public benefits associated with private investments that create some adverse impacts.