Updated: Green Dividend


Updated 8/20/07

Discussed in the Oregonian today, with an emphasis on the fact that the savings stay in the local economy.

Updated 7/23/07

You can hear Joe discuss the “Green Dividend” on this week’s Smart City podcast.

Original Post 7/18/07

I’m late to the party writing about this one, it’s been bouncing around Portland for a couple of days, but I can’t let it go by.

Local economist Joe Cortright (a past guest contributor here) has published a report for CEOs for Cities (PDF, 186K) that quantifies Portland’s “Green Dividend”, the economic benefit (not hardship) created by our greener choices here.

For example, on average each of us here in the region travels about 4 miles less per car than the average American. This saves us $1.1B per year just in gasoline, and the time we save not being in our cars has an economic value of about $1.5B annually.

Green and smart!


26 responses to “Updated: Green Dividend”

  1. I can actually agree with that.

    I should tally the literal costs I save by note using a car, to see if it validates my obsessively expensive sport/racing car costs. :o

  2. The media decided thirty years ago that there was a “trade off” between economic prosperity and the environment. In reality, most of the time it is a trade off between a small group’s narrow economic interests and the broader economic benefit of protecting the environment.

  3. Lets take a closer look:

    From the original paper:
    (The original report is at: http://www.ceosforcities.org/internal/files/PGD%20FINAL.pdf )
    Four miles per day may not seem like much, but do the math. The Portland metro area has roughly 2 million residents. If Portlanders traveled as much as the typical U.S. metro resident, that would produce 8 million more vehicle miles per day or about 2.9 billion more miles per year. A conservative estimate of the cost of driving is about 40 cents per mile. (At $3 a gallon, 15 cents of this is just the cost of fuel, figured at a fleet average of 20 miles per gallon, which is a generous number for city driving.) All told, the out-of-pocket savings work out to $1.1 billion dollars per year. This works out to about 1.5 percent of all personal income earned in the region in 2005.

    My response:

    First he is into big numbers to impress us. Instead, lets just look at facts:
    A person allegedly drive 4 miles less per day. That is about a dollar saved, at $0.25 per passenger mile (the 40 cents sounds like the number that the AAA puts out based in ITS MEMBERSHIP’s driving/buying habits) see: http://www.DebunkingPortland.com/Transit/Cost-Cars-Transit(2005).htm

    $1 per day is $30 per month.
    Lets see, we save $30 per month, but to save that we aren’t allowed to have a back yard, we have to suffer horrible traffic congestion (or get to watch drug deals riding MAX) and take money from schools to give to developers. And pay far more than $30/month more in taxes and even more in higher rents and house payments due to the higher cost of density. See americandreamcoalition.org/penalty.html

    Thanks
    JK

  4. Jim: Everytime you post here, people point out flaws in your numbers. And then you don’t fix them nor say why you think they are correct, you just post them again anyways. Your source is the definition of, “not peer reviewed.” And the AAA doesn’t say 40 cents, they 52.2. But that is besides the point, the IRS says 48.5, and they tell you how they get it: http://www.irs.gov/pub/irs-drop/rp-06-49.pdf

  5. I have to wonder whether Portland’s compactness really has to do with transportation options, or whether it’s simple geography.

    Look at Seattle, for example. 35 miles south of Seattle is Tacoma. It’s a major port city. 35 miles north is Everett, a major Naval base and another harbor. You can’t go too far east before being in the thick of the Cascades, so your development is basically up and down the east shore of Puget Sound. There’s Bremerton, but only so many people can endure a 45 minute ride on a ferry each day, twice a day.

    Vancouver, BC. Well you can’t go west (there’s a big body of water there), north (lots of mountains), and south (the U.S. border tends to discourage commuters.) But Vancouver has been busy adding a lot of suburbs to the east and has constructed both freeways and Commuter Rail to serve those ‘burbs. (Chilliwack, BC, a “suburb” of Vancouver, is located over 53 miles east from downtown Vancouver, BC – as the crow flies. Abbotsford is over 40 miles. Imagine your commute to Portland from Hood River, or from Albany.)

    San Francisco. The Peninsula has been taken over, Oakland has spread out along the bay – because the land is there, not on the Peninsula.

    Portland. 30 miles west is the Coast Range. 30 miles east is the Cascades. 30 miles north is well into Washington, and at that point the foothills come pretty close to the Columbia and there is a lot of low-lying wetlands (not very suitable to build homes on). Oregon’s land-use laws have limited growth to the south into Marion County. But Portland is still growing west and east, into rural Washington and Clackamas Counties.

    This pattern has been going on for decades – long before MAX was even a planner’s dream. Beaverton exploded in the 1960s and 1970s. Hillsboro slightly later. Tualatin was nothing more than a wide spot in the road in 1960; today it’s approaching 30,000 residents. Canby is sprouting up new homes and ODOT is hard-pressed keeping up with safety improvements on 99E.

    It also helps that Washington County is growing many more jobs (and homes) and therefore Intel engineers and Nike designers don’t have to drive from Gresham to get to work.

    Despite Portland’s growth pattern and it’s lack of a single, easy to understand traffic pattern – investments in public transit have not kept up with the demands of the public. MAX still takes people downtown, when Beaverton residents want to go to Washington Square (in Tigard). If you live in Oregon City and need to get to Tualatin your option is I-205 or the backroad – there is no public transit.

    About the only “alternative” (to driving) investment that Portland has done exceedingly well at (apologies to Mr. Parker) is investments in bike paths, and we can thank the long-departed Portland Traction Company (yup, an old trolley line) and Interstate 205 for that. A bike can get from nearly anywhere in the Metro area, to anywhere in the Metro area, all from the comforts of at least a well-marked bike lane, if not a dedicated bike path, and without being forced to go somewhere they do not want to go. It is a shame that the region cannot apply that same logic to public transportation planning; instead focusing few dollars to invest in small projects instead of projects that will benefit the region as a whole.

  6. But if you compare the rate at which Portland is growing east and west compared to comparable cities, we’re chewing up that farmland FAR more slowly (see Cascadia Scorecard as one source).

  7. Chris that farmland we are chewing up is primarily used to grow lawn oranaments for the muidle and upper class. A whole lot of that is shipped elsewhere using up a lot of fossil fuels. Meanwhile the lower class does without adequate housing and we import much of our food from elsewhere as in tomatoes and peppers from Canada where they are grown in green houses.

    Makes me wonder if the intelligencia around here ever got an education.

    MW

  8. farmers grow different crops year to year. the idea is to protect farmland for many generations. what they grow today has little bearing on the issue.

    you claim there is a link between portland land use policy and the lower class doing without good housing options? can you support that claim?

    it would contradict a lot of studies out there…

  9. george writes: “farmers grow different crops year to year. the idea is to protect farmland for many generations. what they grow today has little bearing on the issue.

    you claim there is a link between portland land use policy and the lower class doing without good housing options? can you support that claim?”

    Sorry george the variation in farmer crops is not nearly as great as you are suggesting from year to year. And yes I can support that comment.

    MW

  10. Michael, Whether or not there is year to year variation in a farmer’s crops is irrelevent. George’s point is that what is grown today, may not be what will be grown tomorrow as economies and markets continually evolve. A lot of people don’t realize that thanks to Missoula floods, the Willamette valley is among the most fertile in the world. Once this fertile land is developed, it’s gone forever.

    Aside from this feel good statement about the superiority of our soil, let’s take a look at some stats;

    Taken in it’s entirety, 150,000 jobs are related to agriculture in Oregon, representing 2.5 billion dollars in wages and 4.5 billion dollars worth of product. Agriculture ranks number 1 in volume of Oregon exports and #3 in value; or about 3.8 billion dollars worth of exported goods. In just our local region alone (Washington, Clackamas, and Multnomah Counties), there was 795 million dollars worth of agricultural product sold in 2006.

    Why anyone would support the permanent destruction of such a vital way of life and important source of revenue for Oregon and our local economy is something I simply cannot comprehend.

  11. you claim there is a link between portland land use policy and the lower class doing without good housing options?

    There is a link. But it actually operates to the benefit of “the lower class”. Anyone who has seen what has happened to property values in low income communities around the country understands what the real impact of suburbanization has been on the “lower classes”. The homes that were their primary asset fell in value. By contrast, homeowners in North and Northeast Portland and southeast Portland neighborhoods have seen their home values raise while even in places like Rockwood home values are at least stable if not increasing at the same rates as more desirable neighborhoods.

    Those increases are often portrayed as negative. It appears some people want to create affordable housing by making the houses other people own more “affordable”.

    If by “lower class” you mean renters then again you will find that, while the central city has become less affordable, suburban development with decent transit service provides alternatives that would be far more difficult if they were in the typical auto-dependent suburb.

    The real challenge is providing a mix of housing in specific neighborhoods. There is a need for low income housing so that young people moving out have the option of living in the neighborhood where they were raised. So that seniors who no longer can maintain a house have appropriate affordable options. That is as true of many suburbs as it is the inner city neighborhoods.

  12. The real challenge is providing a mix of housing in specific neighborhoods. There is a need for low income housing so that young people moving out have the option of living in the neighborhood where they were raised. So that seniors who no longer can maintain a house have appropriate affordable options.

    Accessory units (granny flats, guest cottages, garage apartments) can do a lot in this respect: provide a source of revenue for homeowners to help with taxes and/or mortgage, while putting more low-cost rental options on the market.

  13. Matthew Jim: Everytime you post here, people point out flaws in your numbers. And then you don’t fix them nor say why you think they are correct, you just post them again anyways
    JK: Care to name a flaw?
    Otherwise you are just engaging in the endless string of ad hominems coming out of Portland’s planning community because they cannot deal with real facts. It just gets too tiresome correcting the same planner drivel over and over again.

    Matthew Your source is the definition of, “not peer reviewed.”
    JK: Neither is yours, but at least mine is easily traceable to source documents from Trimet, AAA and the Feds.

    Matthew And the AAA doesn’t say 40 cents, they 52.2.
    JK: Please pay attention. The AAA says 52.2 per vehicle mile. The article is about passenger miles. Do the division: 1.30. That is within the range of numbers for vehicle occupancy. My statement stands: 40 cents per passenger mile “sounds like” (important qualification – please pay attention this time) the AAA data (52.2 per vehicle mile.)

    Matthew But that is besides the point, the IRS says 48.5, and they tell you how they get it: irs.gov/pub/irs-drop/rp-06-49.pdf
    JK: Forgive me for not reading your 29 page link, but I didn’t see any list of costs added up to the total 48.5 on the first page. If that document really has the derivation of the cost, please point it out. (I have previously responded to this subject, and, found that the IRS number comes from the AAA and shares the same bias towards upper income people.)

    Lets review reality:
    There are usually a Varity ways of collecting and presenting data, depending on the on the intended use. For instance the AAA collects cost data that applies to their subscribers, not to the general public. The difference includes the fact that AAA members have newer cars which are a major cost of car ownership. If you had bothered to look at DebunkingPortland.com/Transit/Cost-Cars-Transit-Details(2005).htm you would find two versions of car costs, where they came from, a link to the Federal data, a link to the AAA book and my looking at the details line by line. You have a lot to learn, I suggest starting there.

    Thanks
    JK

  14. Care to name a flaw?

    We’ve been over this many times before, JK, but here are a few flaws:

    I’ve been over the figures on your web site in detail. Here are a few issues you have yet to address:

    1. Your $0.25 per passenger mile figure comes from dividing the results of two different values published by two different agencies. You divide the BEA (Bureau of Economic Analysis) User-operated transportation cost by the FHA (Federal Highway Administration) Person Miles of Travel and then by ODOT figures for Portland-area cities’ rates of passenger occupancy. (I do acknowledge that you are now using the ODOT figures, which is an improvement over past errors.) There is NO indication as to why it is appropriate to divide these two figures to get your result, and to what underlying data may be omitted or duplicative or unresolved. I’ve done a fair number of Google searches trying to find any serious article or study (peer-reviewed or otherwise) that uses those two values like you have, and I can’t find one.

    2. A serious flaw: You are using the FHA value of 2,989,807e6 vehicle miles as your denominator. That is the total miles of “All Motor Vehicles”, including “PASSENGER CARS MOTOR- CYCLES BUSES OTHER 2-AXLE 4-TIRE VEHICLES 2/ SINGLE-UNIT 2-AXLE 6-TIRE OR MORE TRUCKS 3/ COMBINATION TRUCKS” — this is not reflective of a comparison between cars and transit. There is also no proof that this large total including all motor vehicle types in any way relates to the BEA cost figures that you use as your numerator.

    3. Your figures represent all types of miles travelled, including both Urban and Rural. Rural mileage tends to have higher vehicle occupancies and lower costs per vehicle mile. You can’t take a total figure with all mileage types like that and then simply divide it by the Portland Metro area’s vehicle occupancy and get a true reflection of the type of driving done here.

    4. Somewhat related to the above: Most transit miles are urban miles. You cannot compare totals which include a significant number of rural miles directly to transit, which is inherently urban/suburban nature.

    5. TriMet’s transit trips in this region are on average 5.42 miles per originating ride. Short trips like this are inherently higher-cost for autos, because the starting and warm-up wear and tear are spread over fewer miles. They are also lower MPG and higher pollution. Even highly-tuned, highly efficient cars like the Toyota Prius get their worst MPG (sometimes 25% or more below average) in the first 5 minutes of travel due to high idle and emissions warm-up, time spent in the driveway, etc.

    So your figures, while representing an interesting starting point for discussion, need a lot more adjustment and supporting evidence.

    To quote yourself from above, “You have a lot to learn”, but there’s always hope.

    – Bob R.

  15. dan, thanks for backing my point!

    i married into a farming family, and having sat through a number of holidays, i know from experience that there is some degree of year to year crop variation and WHOLE LOT of variation in what is grown when you look out to a 10 year plus window.

    farmland is a very valuable resource, and just because a decorative hedge is grown on farmland today, doesn’t mean that we should put a subdivision there, or that it lacks long term value.

    oh and ross, in general i’ll agree with you that there are quite a number of “winners” when inner cities revitalize/gentrify/whatever you wanna call it. however, i am still not convinced that our UGB has much to do with it. inner cities are changing in nearly every healthy city in the USA, UGB or no…

  16. Bob R. Says: 1. Your $0.25 per passenger mile figure comes from dividing the results of two different values published by two different agencies.
    JK: Do you know of a better source for the data? How much do you believe the result will change?

    Bob R. Says: 2. A serious flaw: You are using the FHA value of 2,989,807e6 vehicle miles as your denominator.
    JK: Do you know of a better source for the data? How much do you believe the result will change?

    Bob R. Says: 3. Your figures represent all types of miles travelled, including both Urban and Rural.
    JK: Do you know of a better source for the data? How much do you believe the result will change?

    Bob R. Says: 4. Somewhat related to the above: Most transit miles are urban miles. You cannot compare totals which include a significant number of rural miles directly to transit, which is inherently urban/suburban nature.
    JK: Do you know of a better source for the data? How much do you believe the result will change?

    Bob R. Says: 5. TriMet’s transit trips in this region are on average 5.42 miles per originating ride. Short trips like this are inherently higher-cost for autos, …
    JK: Do you know of a better source for the data? How much do you believe the result will change?

    Thanks
    JK

  17. JK asks, five times in a row: “Do you know of a better source for the data? How much do you believe the result will change?”

    JK, you are the one who has been frequently asserting your cost figure as though it carries great authority… it is up to you, the one making the original assertion, to make corrections or provide supporting evidence when obvious and inherent flaws are brought to your attention.

    – Bob R.

  18. Bob R.: JK, you are the one who has been frequently asserting your cost figure as though it carries great authority…
    JK: Come on Bob, you know all data has inherent limits, flaws and varies in completeness. I am just trying to get good data and nothing you said changes the validity of the data I found. I repeat: if you know of better data, let me know.

    As to cost figures, my data actually gives transit a big advantage because the car numbers include ALL auto expenses INCLUDING the 18% of gas tax pilfered for transit. Further, as far as I know, Trimet does not pay for its usage of streets like cars do, eventhough Trimet buses are a major destructor of Portland’s roads.

    Bob R.: it is up to you, the one making the original assertion, to make corrections or provide supporting evidence
    JK: I have provided the best data that I know of. If it has any real flaws that affect the bottom line, you sure haven’t pointed them out. I presume that is because you have run out of nits to pick.

    Bob R.: when obvious and inherent flaws are brought to your attention.
    JK: Feel free to point out some “obvious and inherent flaws” which actually affect the validity of the conclusions. Instead of nits.

    BTW you also have to point out that better data exists, or we are stuck using the best data available – as far as I know that is what I have used.

    No more time to play today – I have things to get done.

    Thanks
    JK

  19. however, i am still not convinced that our UGB has much to do with it. inner cities are changing in nearly every healthy city in the USA, UGB or no…

    I think you will find that many cities have had revivals of some inner-city neighborhoods without a UGB. But I think Portland is unique when you start to look at places like Rockwood and some of the older parts of Beaverton. Those inner ring suburbs don’t have the older housing stock that makes some inner city neighborhoods fashionable. Yet the housing values there have held up.

    And to be clear, I don’t think it is just the UGB, but the compact development and transportation alternatives that the UGB encourages.

  20. I know of a better source for the average occupancy data: The census. They say 1.09. I’ve seen Mel Zucker use that number. And no, there is a big difference between 1.3 and 1.09, given that no cars have 0 people, (and 48.5/25 isn’t 1.3, it is 1.94.) If you compare the most optimistic numbers for your argument to the most pessimistic numbers for the other side, you can prove anything. For instance, I’ve seen proof that coal is cleaner than Natural Gas. (If the Coal is from Powder River, which is running out, and not from most of the rest of our country which has considerably higher carbon/btu, and the Natural Gas is from Quatar, shipped by ship…)

    And your argument that “the IRS calculation is too long,” isn’t doing much for me. Most things in life that are worth knowing are complicated. Everything can’t be boiled down to one page.

  21. Feel free to point out some “obvious and inherent flaws” which actually affect the validity of the conclusions. Instead of nits.

    The aren’t “nits”, JK, they are fundamental.

    If you exclude “SINGLE-UNIT 2-AXLE 6-TIRE OR MORE AND COMBINATION TRUCKS”, that increases the cost per passenger mile by 8 to 9%, and still included within the remaining total are buses, which (according to your own table) have an average occupancy of 21 passengers.

    In other words, you are using totals WHICH INCLUDE TRANSIT FIGURES to arrive at a cost figure which you then use to argue against transit. That’s double-counting.

    On the other side of the equation, the BEA numbers you reference explicitly do NOT include the purchase of buses, trucks, etc. So the BEA figure is low-balled compared to the FHA mileage you are using.

    If you are so certain of your numbers, why can’t you produce a report from a single agency, university, or peer-reviewed journal that divides the figures as you do? Frankly your analysis wouldn’t make it out of a freshman economics class.

    Finally, and this is not a “nit”, if you want to make comparisons to transit, you must do so for the kinds of trips transit serves. I don’t run around comparing a light rail trip from Sunset Transit Center to a trip from, say, Eugene to Ashland, but you are using numbers that include those kinds of trips in the total.

    – Bob R.

  22. BTW you also have to point out that better data exists, or we are stuck using the best data available – as far as I know that is what I have used.

    I suggest you check out the extensive study of transportation costs (focusing on a variety of modes, not just autos) done by the Victoria Transport Policy Institute.

    In the study, they go to great effort to identify various cost factors, fixed, variable, and external, and apply them to all modes. Further, they separate out Urban Peak miles from Urban Off-Peak and Rural miles.

    You can see a lot of the cost conclusions in Chapter 6.

    Now, your figures don’t include external costs, so I’ll show the study’s costs both excluding and including external costs for a more direct comparison…

    I believe these figures are in 1996 US dollars.

    They show that average Urban Peak car costs per passenger mile are in the 60+ cent range (close to $1.20 including external costs), while Rural costs per passenger mile are closer to 40+ cents (50+ cents with external costs.)

    Transit, by the way, doesn’t receive glowing cost treatment… they include all subsidies as external costs, so the average passenger-mile cost of transit is very close to automobile. (Although I don’t see if this compares to average miles or urban miles at first glance.)

    – Bob R.

  23. Dan writes: “Aside from this feel good statement about the superiority of our soil, let’s take a look at some stats;

    Taken in it’s entirety, 150,000 jobs are related to agriculture in Oregon, representing 2.5 billion dollars in wages and 4.5 billion dollars worth of product. Agriculture ranks number 1 in volume of Oregon exports and #3 in value; or about 3.8 billion dollars worth of exported goods. In just our local region alone (Washington, Clackamas, and Multnomah Counties), there was 795 million dollars worth of agricultural product sold in 2006.

    Why anyone would support the permanent destruction of such a vital way of life and important source of revenue for Oregon and our local economy is something I simply cannot comprehend.”

    And how much of those wages stay in the local markets? Most of the farm workers are migrants who send a good portion of their pay back home.

    Add to that is the income received from the federal government that is some form of subsidy. Should that go away or change significantly it may have a profound impact on farming. For many of these farmers they could more correctly be called “Tax Farmers” than anything else. You might wish to check the EWG.org website to see what the amount is for various counties in the state.

    And then there is the pollution from pesticides, herbicides and whatever else these guys use, not to mention the field burning and plowing with the dust blowing high into the atmosphere. Of course the herbicides and pesticides are produced elsewhere along with much of the other supplies and equipment they use so I have to question how much of a real value it is to the state.

    All of this is for some to grow sod, grass seed, Christmas trees and good ol’ nursery stock.
    As I mentioned we still import tomatoes and peppers from Canada. I might feel a bit different if I saw green houses where local produce was growing, but I don’t and I doubt I ever will.

    MW

  24. Michael –

    Do you have access to figures for how many Willamette Valley acres are in what form of production?

    Personally I have relatives who have been farming filberts (hazel nuts), wheat, and other crops for decades, and their farm is over a century old.
    (I’m not sure what their specific opinions are on UGB issues, but I do know they have expressed a disdain for sprawling subdivisions… They prefer to have agriculturally-oriented neighbors who don’t complain about noise, dust, etc.)

    – Bob R.

  25. Most of the farm workers are migrants who send a good portion of their pay back home.

    I don’t think either of those statements are true if you are talking about agricultural employment. There may be a lot of field workers who that stereotype fits, but they represent a small amount of that employment and the worst paid. And they still spend most of the money they make locally.

    And then there is the pollution from pesticides, herbicides and whatever else these guys use

    Not that anyone uses such things on suburban lawns…

Leave a Reply

Your email address will not be published. Required fields are marked *