Editor’s Note: There are dozens of major infrastructure investments that would yield positive economic returns to Californians. Spending over $100 billion on high-speed rail is definitely not one of them. But as Kevin Dayton explains in this article, even the environmental benefits of high speed rail are questionable, if not a complete fabrication. This isn’t Dayton’s first expose of the high speed rail disaster; for more withering details, read “Unions Virtually Alone in Love with California High-Speed Rail,” and “California High-Speed Rail Business Plan Misrepresents Project Labor Agreement.” California’s so-called “bullet train” is a textbook case of crony capitalists and corrupt politicians hiding behind environmentalist rhetoric to justify an epic waste of taxpayers money. And with all the construction projects California really could benefit from, the unions pushing high-speed rail should be ashamed of themselves (ref. “Construction Unions Should Fight for Infrastructure that Helps the Economy.”)
Earth Day 2014 deserves a detailed report on the environmental achievements of California High-Speed Rail, the spine of the mass transit connectivity system that will one day transport you between your own home transit village and another transit village.
And yes, you WILL ride, because artificial government cost barriers will discourage you from driving and flying. A governor and legislators who today are merely students protesting at a University of California campus somewhere will enact such policies between 2028 and 2041.
Trees-for-Shade and Other Schemes for “Net Zero Emissions”
The California High-Speed Rail Authority claims it will achieve “net zero emissions” when it builds its “First Construction Segment” from Madera to Bakersfield by 2017. This program will allegedly allow the Authority to avoid adding to the state’s carbon footprint already imprinted by the lifestyles of Hollywood celebrities and other top Democratic Party campaign contributors.
Net zero emissions means lots of free and discounted stuff to the San Joaquin Valley. The Authority plans to plant 5,000 trees, buy new school buses for school districts, and buy new irrigation pumps and tractors for farmers. (If you’re a farmer in the San Joaquin Valley now forced to buy a pump to extract water from a new deeper well, save your receipts.)
The Authority will also require certain emissions standards for construction equipment, require contractors to recycle 100 percent of concrete and steel from construction and demolition activities, and divert 75 percent of non-hazardous waste from landfills as a way to reduce greenhouse gases. The guy in Pixley with one excavator from the old family business will NOT be working on this project.
Global sea levels are already falling in anticipation of the tree planting program. As required as a condition of 2012 state legislative appropriations, the California High-Speed Rail Authority produced a report in June 2013 entitled “Contribution of the High-Speed Rail Program to Reducing California’s Greenhouse Gas Emission Levels.” Here’s an excerpt:
The Authority is committed to achieving zero net greenhouse gas emissions related to construction activities. While construction activities will generate greenhouse gas emissions, when coupled with the Authority’s strategy, the result is zero net direct construction greenhouse gas emissions. For example, the estimated greenhouse gas emissions associated with construction activities, materials deliveries, and worker travel for Construction Package 1, the first 29-mile construction segment of the high speed-rail system from Madera to Fresno, of 30,107 metric tons of CO2e, from 2013 to 2018, would be offset at the start of construction through a tree planting program that the Authority is developing. This multi-faceted forestry program will introduce enough trees into the region where construction is taking place to honor the Authority’s commitment to offset the direct greenhouse gas emissions associated with construction. The program is planned to include urban forestry and tree planting, through regional tree foundations, which compounds greenhouse gas emissions reductions by providing shade and other amenities with tangible local economic benefits. The program could also include providing shade trees to interested home owners
These will be big leafy trees – not tall skinny palm trees like the ones now shunned in the City of Los Angeles Million Trees LA program because palm trees don’t provide enough shade. Already state and local legislators are angling for trees in their districts. (They don’t seem to be thinking about the public costs of irrigating and maintaining those trees, though.)
Some people think this tree-planting program is farcical. Why not just plant 100,000 trees as an emissions offset and skip building the $68 billion high-speed rail line between San Francisco and Los Angeles? And why borrow money via bond sales, use it to buy trees for interested home owners, and then pay the money back with interest over 35 years? Using borrowed money from bond sales to buy iPads might be a better investment.
As another example of offsetting greenhouse gas emissions, the California High-Speed Rail Authority report also touts “an agreement with the California Department of Conservation (DOC) and the Madera and Merced County Farm Bureaus to assist in obtaining farmland conservation easements from willing sellers located near the high-speed rail alignment between Merced and Bakersfield.” This agreement is the result of a 2013 settlement of an environmental lawsuit against the California High-Speed Rail Authority. Less than a month after the California High-Speed Rail Authority released its report citing this agreement, an article in the Fresno Bee reported that the California High-Speed Rail Authority had failed to make the $5 million payment required in the settlement to establish the program.
Everyone Wants Some Cap-and-Trade Money
Everyone loves a windfall, whether it’s the Peace Dividend, the Tobacco Settlement, Facebook IPO tax revenue, or First 5 California. There’s now a new, exciting one in California: Cap-and-Trade auction proceeds, sometimes called “allowances” but more accurately called “taxes.”
Governor Brown has proposed spending $250 million of planet-saving Cap-and-Trade auction proceeds on California High-Speed Rail in his fiscal year 2014-15 state budget and 33% of proceeds in future years. State Senate pro Tem Darrell Steinberg will reportedly counter with a proposed budget that designates about 20% of proceeds for the high-speed train program. Some environmental groups – in particular the Sierra Club – oppose spending Cap and Trade auction proceeds on California High-Speed Rail at this time. Some Democrats agree and think other programs are more worthy.
Everyone wants this money taken from the polluters. At budget subcommittee hearings about spending Cap-and-Trade funds, lobbyists line up to advocate for their organizations and causes to get money or more money from it. Politics will play a role in how much goes to the train.
For the California High-Speed Rail Authority, Cap-and-Trade revenue may be essential to preserve the program. A court has blocked the state from selling Proposition 1A bonds, thereby also jeopardizing the expenditure of federal matching grants for the program. Governor Brown and the California High-Speed Rail Authority have been forced to seek this funding now to keep the high-speed train program moving into its first construction contract.
Is California High-Speed Rail Authority Justified in Getting Cap-and-Trade Money?
In its February 2014 report “The 2014-15 Budget: Cap-and-Trade Auction Revenue Expenditure Plan,” the California Legislative Analyst’s Office (LAO) described Governor Brown’s $250 million Cap-and-Trade proposal for California High-Speed Rail. The report was lukewarm about using Cap-and-Trade auction proceeds for High-Speed Rail:
“Some Outcomes Would Depend on Changes in Behavior. In addition, the amount of greenhouse gas reductions for some proposed programs would depend on changes in behavior that are difficult to predict. For example, the administration assumes that the high-speed rail…proposals would result in some individuals shifting their mode of transportation, resulting in a net reduction in vehicle miles traveled in cars. While such changes might very well occur and could result in net greenhouse gas emission reductions, it would be difficult to predict with precision the likely marginal net greenhouse gas reduction due to these efforts. This uncertainty increases the risk that the administration’s plan would not achieve its maximum potential emission reductions.
Some Reductions Would Likely Occur Beyond 2020. We also find that some proposed activities would not contribute significant greenhouse gas reductions before 2020, which as mentioned above, is the statutory target for reaching 1990 emissions levels. For example, plans for the high-speed rail system indicate that the first phase of the project will not be operational until 2022. Moreover, the construction of the project would actually generate greenhouse gas emissions of 30,000 metric tons over the next several years. The High-Speed Rail Authority plans to offset these emissions with an urban forestry program that proposes to plant thousands of trees in the Central Valley. We also note that High-Speed Rail Authority’s greenhouse gas emission estimates for construction do not include emissions associated with the production of construction materials, which suggests that the amount of emissions requiring mitigation could be much higher than currently planned. Therefore, it is possible that the construction of the Initial Operating Segment may result in a net increase in greenhouse gas emissions, even when accounting for proposed offsets.”
The report also listed several implementation problems of the Governor’s proposed plan to spend Cap-and-Trade auction proceeds.
Will California High-Speed Rail Actually Reduce Greenhouse Gas Emissions?
Don’t abandon construction of that giant sea wall yet, City of Santa Cruz. The hype about California High-Speed Rail saving the planet is compromised when one considers boring things, such as cement production for civil construction and the accuracy of ridership prediction models.
In the fall of 2010, two experts in Civil and Environmental Engineering at the University of California, Berkeley published a report entitled “Life-Cycle Environmental Assessment of California High Speed Rail.” This report suggested that claims of major reductions in greenhouse gas emissions because of California High-Speed Rail might be unfounded.
“Taking life-cycle and ridership uncertainty into account can yield drastically different estimates about the energy efficiency of different transportation modes…The life-cycle inventory for high-speed rail shows that accounting for infrastructure construction and electricity production adds 40 percent to the energy consumed by the trains’ operations alone…Greenhouse gas emissions increase by about 15 percent, primarily because of the concrete used in construction – half a kilogram of CO2 is emitted for every kilogram of cement produced. Infrastructure construction will emit roughly 490 million metric tons of greenhouse gases, which are approximately 2 percent of California’s current annual emissions. As was the case with the life-cycle inventory of conventional modes, the majority of emissions are released not from the electricity needed to propel the high-speed trains, but from the indirect and supply-chain components.
We can estimate the energy payback period for high-speed rail by comparing the energy used in its construction with the resulting energy savings in its operation, but only by making assumptions about ridership. The payback period evaluates the upfront energy or emission investment in deploying high-speed rail infrastructure against the potential reductions over time. The California High-Speed Rail Authority provides a ridership estimate, but as we noted above, ridership is uncertain, and for an entirely new mode it is very uncertain. Thus California high-speed rail warrants ridership evaluation for both high- and low-ridership scenarios. We consider high ridership as strong adoption of high-speed rail at the expense of auto and air travel, mid-level ridership as moderate adoption of high-speed rail, and low ridership as poor adoption of high-speed rail where travelers favor auto and air. For high ridership scenarios, the energy payback period on the initial investment is eight years, for mid-level ridership 30 years, and never for low ridership (when under-used high-speed rail is coupled with increased utilization of auto and air travel). For greenhouse gas emissions the payback period for rail is six years for high ridership, 70 years for mid-level ridership, and never for low ridership…Thus the California high-speed rail system can reduce greenhouse gas emissions, but may do so only over a very long period, and will do so in exchange for other air emissions.”
Such thinking was never presented in your 4th grade ecology class. Why do things have to be so complicated?
It Could All Be Moot: Cap-and-Trade May Not Survive Lawsuits Anyway
In April 2013, businesses and organizations filed lawsuits (Morning Star Packing Co., et al. v. California Air Resources Board, et al., Case No. 34-2013-80001464 and California Chamber of Commerce, et al. v. California Air Resources Board, et al., Case No. 34-2012-80001313) in Sacramento County Superior Court contending that the revenue-generating auction provisions of the California Air Resources Board Cap and Trade regulations are unconstitutional, not authorized under state law, and illegal taxes under Proposition 13 and Proposition 26.
On August 28, 2013, Sacramento County Superior Court judge Timothy M. Frawley sided with the California Air Resources Board. However, he noted that “On balance, the court agrees that the charges are more like traditional regulatory fees than taxes, but it is a close question. Contrary to what [the California Air Resources Board] argues, the charges have some traditional attributes of a tax.”
He also ruled that “Although AB 32 does not explicitly authorize the sale of allowances, it specifically delegates to [the California Air Resources Board]the discretion to adopt a cap-and-trade program and to “design” a system of distribution of emissions could be freely distributed to covered entities or to non-regulated entities, who could then convert the value of the allowances into cash by selling them in the allowance market.”
The plaintiffs have appealed the decision, and the cases are likely to end up at the California Supreme Court. Don’t pay the bills with Cap-and-Trade just yet.
About the Author: Kevin Dayton is the President & CEO of Labor Issues Solutions, LLC, and is the author of frequent postings about generally unreported California state and local policy issues at www.laborissuessolutions.com.