Cars, Engines, Travel - Fewer, Smaller, Less

Time to acknowledge falling private car use
The prospect of falling car use now needs to be firmly factored into planning for western cities. 

That may come as a bit of a surprise in light of the preoccupation with city plans that aim to get people out of their cars, but it is already happening.  And it is highly likely to continue regardless of whether or not we promote urban consolidation and expensive transit systems. 

But not necessarily lower resource consumption
Of course, as day-to-day travel savings are made by households these can simply result in other forms of consumption, offsetting any resource savings.  This should not be surprising.   Final demand embodies resources consumed right across the production and distribution chain.  Savings from lower transport spending (including commuting) – an intermediate input in the chain – that lead to lower prices translate into increases in discretionary spending (assuming constant or rising incomes). 

Hence, the reduction in resource use and pollution sought by subsidising public transport and promoting higher density living may simply be spent on resource-intensive appliances, recreation, entertainment, and inter-city and international travel.

Look to the fringe to look to the future
Putting that inconvenient equation aside, long-term plans for cities should avoid simply projecting past behaviours into the future. Instead, we might look to changes at the margin that signal the issues, discoveries, and events that might determine the long-term outcomes we are interested in. 

So let’s look at what’s happening at the margins of car use, focusing for the purpose of illustration on Auckland.

First, travel demand
The New Zealand Travel Survey has been conducted since 2003.  The results are published on a two-yearly rolling basis.  Using Statistics New Zealand population estimates I have calculated annual “per person” measures for Auckland from 2003 to 2011.  There are some sampling issues and qualifications regarding the survey that mean motor cycle and bicycle use statistics for Auckland are not considered reliable enough to use. Even given sampling error, the balance point to some significant and consistent shifts.

For example, total travel (measured as annual kilometres per resident) appears to have peaked around 2007 (Figure 1). In fact, recorded travel declined by 15% over the period.  Public transport has done better, down 12% overall but actually increasing 13% between 2007 and 2011.

Figure 1: Aucklanders' Travel by Mode, 2003-2011

 More telling, though, has been declining car use.  The first column in Table 1 shows changes over the whole period.  The second column shows changes between the 2007 travel peak and 2011.

The fall in car dependence since 2007 has been marked among passengers (-23%).  Perhaps that means fewer discretionary trips are being taken. This and a 14% decline in driver kilometres and 17% fewer trip legs confirms what the vehicle counts say – cars are being driven significantly less in Auckland  (particularly inner Auckland) now than they were five or ten years ago.

	Period  2003-11	Peak 2007-11
Driver
Km	-4%	-14%
Hours	3%	-12%
Trip Legs	1%	-17%
Passenger
Km	-33%	-23%
Hours	-18%	-17%
Trip Legs	-8%	-22%
All Car Users
Km	-16%	-17%
Hours	-5%	-13%
Trip Legs	-3%	-19%

 Some possible reasons

1.      We know already that an ageing population reduces car
          use.

2.  Public transport is playing a growing but so far minor role (up from 3.7% to 3.9% share of all kilometres travelled).  An average 76km per person growth in public transport use since 2007 hardly offsets the 1,810km average contraction in distance travelled by car.

3. Lower real incomes and higher fuel prices play a part.  A sharp contraction since 2007 suggests that economic conditions have an impact on motoring far more immediate and influential than trying to reshape the shape the city and how people live in it might.   

4. The decentralisation of jobs, recreation and entertainment, professional services, and consumer services – including retailing – mean that people can get more done closer to where they live.  Trying to turn this clock back by pushing commercial activity back into the central city and then providing subsidised public transport to access it seems somewhat obtuse in the light of this development.

Second, car purchases

The Ministry of Transport publishes new car registrations (which include imported used cars).  It also provides data on the total  vehicle fleet since 2000.  

Long-term registration statistics are interesting when related to national population data (Figure 2). Apart from a hiccup in 1991 growth in registrations was more or less continuous from 1950 until 2003.  Since then there has been a sharp decline.  Time will tell whether this is cyclical or signals a long-term shift.  It is noteable, though, that 2009, 2010, and 2011 figures fall well below trend.

Figure 2: Trends in New Car Registrations

This slowdown in new car registrations is reflected in two ways.  First, it is reflected in total fleet size, for which data are available from 2000 (Figure 3). This shows that  2007 was a turning point in total numbers, consistent with evidence that driving in Auckland peaked in that year.  That’s presumably good for the environment.

Figure 3: New Car Registrations, New Zealand 2000-2011,

Second, with the slow-down in imports, the fleet has begun to age (Figure 4).  That’s presumably bad for the environment, as older cars are less efficient and generate more emissions.

Figure 4: New Zealand's Ageing Car Fleet

Third, fleet changes
Fleet composition is changing as growth slows. The average CC rating of newly registered vehicles in 2000 was 2,127.  This climbed to 2,191 in 2005, but fell to 2,033 in 2011, an 8% fall in six years. 

If this is a sign of things to come an increase in the turnover of vehicles would boost fleet efficiency over the medium term even without taking account of the greater engine efficiencies being delivered and gains among electric and hybrid vehicles

Add to that the prospect supported by these numbers of increasing differentiation among vehicle styles (Figure 5).  At one end sits the large weekend recreational vehicle, perhaps falling as a share of new vehicles – or at least being down-sized.  At the other is the increasingly popular city runabout or smart car, and in the middle  the family sedan, the work horse with an engine size now likely to be well under 2,000cc.  

Figure 5: Changes in Engine Size of Newly Registered Vehicles, 2000-2011

So what does this all mean?
There is evidence accumulating to suggest that significant changes are taking place at the margin of transport demand and car dependence.  If this is a sign of things to come it raises questions about long-term road expenditure, about dire predictions of road congestion, and about the benefits of adopting expensive land use and transport measures designed to force people out of their cars.  Already, within a more constrained economy, people seem to be making their own decisions to reduce car dependence.

In terms of city planning, it suggests that decentralisation may be more sustainable than the compact city protagonists make out.  In this respect, is interesting that motorway traffic counts show that significant reductions in inner city vehicle flows are offset by gains (albeit much smaller) in outer parts of the city – even as measured distance travelled falls. 

And Auckland definitely needs to rethink assumptions behind spending plans for major road and rail infrastructure – and confront the risks and costs of getting them wrong. 

And, incidentally, it’s about time New Zealand's Ministry for the Environment updated its report card on trends in the environmental impact of vehicle travel – which only goes up to 2007, a year which may prove to be a turning point in long-term travel behaviour.

Congestion, Density, and Transit– Have we got the mix all wrong?

The compact city/transit answer to the urban sustainability question

Expensive – and usually loss-making – public transit is enjoying a resurgence in the face of uncertainty over the supply and price of oil, concerns about the proliferation of private vehicles and greenhouse gas emissions, and  questions over the sustainability of our cities.

Transit is generally promoted as part of a programme to increase city densities.  In Auckland, for example, the plan is to recreate a compact city in order to get people out of cars.  A commitment to increasing the capacity of rail-based public transport is intended to support residential densities and justify concentrating public investment in the CBD.

I have addressed some of the issues this raises in earlier blogs.   (E.g., Rethink the Link, Five More Reasons, Thin Edge of the Tunnel Wedge, Derailing Auckland)

Exploring the relationship – the data

Using the Tom Tom international congestion index it is possible to explore the association between congestion and city density.  I analysed Q2/2012 morning congestion figures for 25 North American and 51 European cities covered by the index.  The index is based on the real time experience of drivers in areas of high usage of Tom Tom car navigation systems.  Congestion is measured as the deviation in travel time on individual routes at peak times compared with when they are flowing freely (generally at night).  The higher the deviation, the greater the congestion.

I looked for relationships between morning peak hour congestion and city size, population, and density using the Demographia July 2012 compendium of world urban areas data.   

Here are some summary figures for the second quarter, 2012:

Source: Tom Tom, 2012; Demographia, 2012 Congestion is additional peak hour travel time compared with free flow travel over the same routes.   (Out of interest, the comparable density figures for Auckland, Hamilton, Wellington and Christchurch are 2,400. 2,200, 1,900, and 2,000 respectively). 



Note the greater range of congestion figures among European compared with North American cities, and their significantly higher high and median figures.
 
The North American evidence:  higher density = more congestion?
I undertook simple and multiple regressions in each case to establish how far differences in congestion depend on the physical size of cities, how far on their populations, and how far on residential densities.
 

Among the North American cities only population density was statistically significant, explaining 52% of the differences in morning congestion among cities.  By and large, as densities increase, so does congestion (Figure 1).  The inference is that transport efficiency is no better among more compact cities, and may be worse.

Figure 1: The relationship between density and congestion, North American Cities

Does transit help?

It would take more comprehensive evaluation to establish how far transit systems might modify this relationship between density and congestion. The US News website provides a ranking of the top ten US transit systems based on ridership, safety, and government spending.  Only five are in the Tom Tom sample. 

Figure 2 orders the cities from worst to best performing on the ground of the difference between congestion that would be expected on density grounds alone (as predicted by the regression equation in Figure 1) and the actual congestion recorded.  Hence, Boston has higher levels of congestion (48%) than predicted (27%) on the basis of its density (just 800 persons per square km). And like poorly performing Seattle, it has one of the top ten transit systems as ranked by US News (4^th and 9^th respectively).  

Figure 2: Congestion performance, North American cities

The other poor performers based on this analysis include both high density Montreal, Ottawa, and Vancouver, and low density Atlanta. 

This is not a definitive analysis.  Rather, it suggests propositions for further consideration.  Among these, higher densities do not necessarily mean less congestion – more likely the opposite.  And leading edge transit does not necessarily fix the problem. 

The European Evidence: there is no evidence

The results for European cities were completely different, adding weight to the argument that context matters: what works in one setting will not necessarily work in another.  Across the 52 cities there is no relationship between density and congestion.  (There is, however, a weak relationship with cities’ physical size, r²=0.25). 

Figure 3 plots morning congestion as a deviation from the median for the 51 cities and includes a plot of densities.  It isn’t easy to read. In summary, the poor performers are Warsaw (density 3,100), Marseilles (1,300), Istanbul (9,700), Toulouse (1,100), Rome (3,400) and Brussels (2,600).  The better performers include the smaller cities of Malmo (density 3,600), Zagreb (5,700), Valencia (3,000), Seville (5,600) and Bern (2,300).

Figure 3: Congestion Performance, European cities

Does transit help?
A listing of the world’s top ten transit systems in 2011 included only four from the European sample (and only the New York subway from North America).  The London Underground comes in third, but London Metro Area comes in at a low 39^th on the European congestion rankings.  The Paris Metro is rated fifth , but Paris sits at 46^th among the 51 European cities for congestion.  The Berlin U-Bahn sits at 9^th place and the city's congestion 21^st in Europe.  Copenhagen is 10^th in the world transit stakes and 16^th in congestion ranking.

While the results are quite different from the North American analysis, the European evidence also offers no grounds for suggesting that density is a prerequisite either to better commuting conditions or that congestion reflects the quality of transit systems.

(A contrarian might argue, of course, that transit creates a commitment to a land use pattern that promotes congestion, delaying or distorting the decentralisation of employment that might otherwise occur in a well-connected city). 

Pursuing poorly performing precedents

If nothing else, the analysis raises issues which deserve much closer analysis, especially in Auckland where they do not support plans for a high cost transit system to support a compact city.

While planning – and planners – in Auckland have a tendency to cite overseas precedent to support expanded rail-based transit and higher residential densities, the variability of overseas experience suggests that this is a highly risky strategy.  Context really does matter – not only here but also among the precedent cities our planners love to cite. This is especially the case when poor performers on the congestion scale like Vancouver and Seattle in North America and London and Paris in Europe are touted as paragons of integrated land use and transport planning. 

So why do our planners and politicians continue to gamble the city's fiscal future on an economically flawed project which overseas data suggests has limited prospect of meeting its objectives?       

 

Derailing Auckland - Unravelling the Assumptions

Public spending and productivity

Economic commentators call increasingly for the private sector to lift productivity  to compete in trans-national markets.  However, we hear less about the need for wise public investment as a condition of productive nations, cities, and business.  Maybe we need to hear more.  

In particular, ill-considered infrastructure imposes unnecessary costs on producers, consumers, and taxpayers. It does so directly through excessive spending and racking up liability for the maintenance and depreciation of poorly performing assets, and indirectly through the impact on credit markets. 

Governments at all levels need to take a highly rigorous approach to investment if they are to avoid undermining the competitiveness of regions.  Yet all too often major public projects are based on weak assumptions. Ideally, no public spending of substance would be undertaken without considering  the risk of getting it wrong and the regret that follows bad decisions – fiscal, economic, and political.

Risks – and the regrets

That does not appear to have been the case with the latest report justifying spending up large on a central rail link/loop (CRL) to enhance public transport in Auckland.

This post considers some of the assumptions about employment that underpin the latest argument for the $3bn or thereabouts needed to improve rail-based commuting into and around central Auckland. It compares the employment numbers projected to justify rail with recent  history.

Of course, recent history is not necessarily a guide to the future.  But forecasting significant shifts to justify the CRL calls for more convincing arguments than we have seen to date. The contingencies - events or behaviours that vary in practice from those projected - need to be analysed.  And the regret arising from getting the assumptions  wrong (which include wasted funds, reduced revenue, foregone opportunities, and fiscal blowout) need to be fully assessed.  

In this case, there is every chance that these assumptions are too weak and potential regrets too big to justify proceeding with the CRL.

 

Weighing up alternative outcomes

Assessing risk does not simply mean drawing high and low variants around a central projection.  This inevitably favours adoption of a single central forecast which, by definition, will be a compromise and countenances little departure from trend.  And if there is one thing we know about the future of our cities, it is that the events and technology we don’t expect will play a big part in shaping it.

Assessing risk means weighing up the probabilities of different events and outcomes and appraising the costs they might impose.  At the very least, a risk-averse approach would review downside rather than upside risks as a basis for sensible investment.

Projecting past mistakes

There is no sign of risk analysis in the documents promoting the Auckland CRL.  And this is a critical shortcoming with respect to the key employment projections on which the promise of unacceptable congestion without the CRL rests. 

The growth assumptions that underlie the most recent arguments about inner city congestion derive from a model developed by the now-defunct Auckland Regional Council. Projections from the model published in 2009 suggested total employment growth of 41,000 jobs between 2006 and 2011, a 6.8% gain (for a projected city total of 642,800). In fact, Statistics New Zealand’s Business Directory show just 12,500 jobs gained (from 616,230 to 628,780 – based on the new Auckland City boundaries). 

In other words, the projection published just two years earlier overshot actual growth to 2011 by over 300%!  How can we have confidence in this model, especially when in its latest incarnation the 2011 estimate is 682,000, or 53,700 (7.9%) more than the actual Business Directory count.

 

Forecasting future employment – or simply wishful thinking?

The 2031 projection on which the case for the CRL is based requires  an annual increment of 12,500 jobs a year: in the five years to 2012 the equivalent figure was just 2,600.  True, it was much higher over the preceding five years (19,000 a year) but the questions that need exploration today are (1) are we are faced with a ground shift in the economy as a result of the GFC, a complete restructuring for which the outcome remains a mystery and, if not, (2) when  might we expect the return to business as usual implicit in the model.  Because the later that happens the further astray the model projections will be and the greater the regret from overinvesting in rail infrastructure.  

In fact, there are still too many risks on the international economic horizon to have confidence that an early correction might offset the current shortfall in actual compared with projected employment.  Why risk funding a marginal increase in Auckland’s public transport capacity and patronage based on what are demonstrably over-optimistic employment growth assumptions? 

(And it is a marginal increase: according to the study, 45% of commuters into Auckland already use public transport - 8% rail.  Boosting that high level of public transport dependence, especially if at the same time we are pushing cycling, walking, and inner city dwelling as responses over-dependence on the private car is a tough challenge.  How much do we need to spend just to get a slightly bigger rail share and not, at the same time, cannibalise an effective bus system? Executive Summary, p45).

 

Where will business – and employment -- grow?

The case for the CRL depends heavily on assumptions about business growth and location.

According to the study employment in the city centre was 90,940 in 2006 (Supporting Report p.22). It projects this to reach 147,000 by 2041 (1,600 more jobs per year).  This  62% growth contrasts with  51% projected for the rest of the City. It bears little resemblance to what has gone before.

 

Between 2000 and 2012 employment in the CBD grew by 25% (660 per year) and in the rest of the City by 24% (9,460 per year).  So where is the analysis or logic to support the fundamental shift assumed, especially if it contributes, as the report suggests, to increasing congestion?  The likelihood is a return to declining CBD employment share (the long-term trend) in the interim as more firms opt for localities elsewhere. 

Or is the plan simply to reduce the location choices available to business?  Because it won't work.  If it gets too hard to locate where they want to go, or the cost of favoured land -- and rates -- get too high, then businesses may exercise their choice to leave Auckland altogether, relocating some or all of their functions elsewhere in New Zealand or overseas.  Why adopt spending policies to accelerate this process?

Back to the assumptions: when the city fringe is added, inner city employment is projected in the report to reach 203,100 in 2041.  This is 25% of an already optimistic forecast for the entire City .  This substantial gain in inner city employment share is based primarily on the CBD growing from 12% to 18% of the total – another overdose of optimism on the part of the proponents of the CRL.

So what’s the starting point?

How these figures are derived is difficult to follow in the published reports.  However, a quick analysis of whether different parts of the city are gaining or losing employment share illustrates why we should be wary of assumptions about a substantial increase in centralisation.

Between 2000 and 2012 the CBD, CBD fringe, and inner suburbs (Rest of Isthmus) all lost share to other parts of Auckland in manufacturing, retailing and wholesaling (see table, below). Production, distribution, and lower-order business services are decentralising, especially into the southern corridor. Retailing and hospitality services – considered drivers of CBD growth– have also been decentralising.  The CBD is losing share in health and social services and professional and scientific services, although some of these are still gaining on the fringe and inner suburbs. 

Changes in Shares of Auckland City's Jobs by area, 2000-2012
(Source: Business Directory, Statistics New Zealand)

Some sectors are becoming both dispersed and centralised at the same time.  Logistics, information services, and financial services gained share in the CBD and further out in the city, perhaps hiding emerging sub-sector specialisations.   Others certainly favour the CBD.  Various business services and education stand out, but these, and arts and recreation services, have not necessarily been the big movers in  the past decade and there are no strong grounds for expecting them to be so in the future. 

A self-defeating case?

The fact that the proposed CRL does not stack up  on economic grounds makes reliance on the ill-founded projections of central city employment on which it is based all the more worrying. 

If we narrow our "recent history" to just the last two years there is some evidence of a gain in CBD jobs relative to the rest of the city.  But such  centralisation is simply an outcome of recession, the geographic expression of companies consolidating in difficult times, and the rate of growth slowing slightly faster outside the CBD.  However, projecting this state of affairs forward raises interesting questions about  how far we  expect the New Zealand economy to stagnate – and what the long-term consequences will be for Auckland of it doing so.  The conditions favouring centralisation may also be the conditions that undermine the city's growth. Equally, healthy growth across the city is a precondition to a healthy CBD.

At this time of  uncertainty it is manifestly unwise to  promote substantial capital expenditure that may well lower capital productivity and incur the ongoing taxpayer and ratepayer liability  this imposes when it is more important to promote sustainable growth .  If nothing else, addressing economic and employment growth by overspending on a project of dubious merit will guarantee that the exaggerated demand projected to justify the CRL does not come about.