The United States is the second biggest contributor to greenhouse gas emissions in absolute terms, with China being the first (Friedrich et al., 2017). The transportation sector in the United States generates the largest share of greenhouse gas emissions, at roughly 30.5% (Rhodium Group, 2019). These emissions largely come from transport modes with internal combustion engines that use fossil fuels (EIA, 2017). Thus green transportation infrastructure, such as urban, regional and commuter rail, which can be electric powered from clean energy sources, is needed to reduce carbon emissions and transform the nation’s dependence away from oil (Feldman, 2014).
A Case Study of High-Speed Rail in California and the U.S.
Green transportation infrastructure development is critical for ecological security purposes (Monbiot, 2006; Feldman, 2014). High-speed rail has the competitive advantage over other transport modes, such as auto and aviation, due its speed, flexibility, congestion relief, and ability to be powered by renewable energy, which makes its development important for densely populated areas in order to connect congested metropolitan regions and help reduce carbon emissions (APTA; Perl, 2002). Therefore, this paper seeks to address the following research question: "What are the structural barriers to the development of green transportation in the U.S., particularly the development of California’s high speed railway?"
In order to approach the research question, the theoretical section identifies factors that are considered to affect the development of high-speed rail in the United States, which include: the legitimacy of rail technology, political influences, and the institutional capacity for implementation. The methodology of this paper consists of a comparative case study of the high-speed rail project in California and Northeast Corridor’s high-speed rail. The purpose of this research is to formulate potential policy solutions in order to overcome structural barriers to the development of green transportation in the United States.
Despite the multi-various benefits that green transportation infrastructure, provides, such as the creation of green jobs, the United States has ultimately failed to invest in public transit infrastructure, creating ecological problems, mobility issues, high levels of traffic congestion in urban cities, and negative economic impacts (APTA, 2012; 2018). Several countries, such as Japan, China and several European countries, have high-speed rail systems (Cohen and Kamga, 2013). The United States is lagging behind, with only one high-speed train called the Acela Express, which is operated by Amtrak and located in the Northeast Corridor connecting Washington, D.C to Boston (ibid). The travel time between New York and Washington D.C. is under 3 hours, covering 225 miles (362 km) with an average speed of 82.2 mph (132.2 km/h) (Amtrak, 2018). And the travel time between New York and Boston is under 3.5 hours, covering 229 miles (369 km) with an averages speed of 66 mph (106km/h) (ibid). The trains can reach up to 150 miles per hour in a few sections (ibid, 2018). The High Speed Ground Transportation Act of 1965 introduced the Metroliner, which was later replaced by Acela (Perl, 2002).
Since then there have been several initiatives to build high-speed rail in other parts of the nation, such as in Ohio, Florida and Texas (Perl, 2012). However, none have successfully been implemented (ibid). As a part of the stimulus program, the American Recovery and Reinvestment Act, $8 billion dollars provided as grants to states for intercity rail projects, with priority to high-speed rail projects in strategic areas, in 2009 (ibid). This was the first policy development recognizing the need for high-speed rail in America since 1965 (ibid). California received about $3.5 billion from the stimulus package in 2009 (CHSRA, 2018). California’s high-speed rail project started constructing the initial operating segment, from Madera to Bakersfield, which is called the Central Valley Segment in 2012 (ibid). The project was proposed to link the major cities in the state through the Central Valley (ibid, 2018). First, by linking San Francisco to the Los Angeles, about 520 miles (840 km), and later, expanding to include Sacramento and San Diego, which is about 800 miles (1,300 km) (ibid). The entire project has an estimated completion by 2033, with an estimated travel time of 2 hours and 40 minutes from San Francisco to Los Angeles (Nagourney, 2018). However, the project has been facing a number of challenges including, significant political opposition, problems with funding, cost overruns, project delays and legal battles (ibid). The project’s cost is one of the most fundamental concerns with projections suggesting that it will cost over $77 billion to complete (Fuller et al., 2019).
The Legitimacy of Rail Technology
Rail technology suffers from a loss of legitimacy, which is a significant variable affecting the development of green transportation infrastructure. The status quo in the United States holds the perception that rail technology for passenger travel is obsolescent (Perl, 2002). Auto and aviation are the dominant modes of transport, and historically, its infrastructure has been viewed as instrumental for economic growth due to the speed and flexibility required to access American sprawling suburban development (U.S. Department of Transportation, 2016; Perl, 2012). After World War II, passenger rail travel significantly declined in the face of increasing competition from auto and aviation transport (Cohen, 2009; 2010). This was a result of various political and economic forces, such as the state’s failure to protect the passenger rail industry and the decline in consumer demand (ibid). These structural changes contributed to the nation’s fossil fuel-dependence, high economic valuation of automotive and air passenger travel, and to the nation’s relatively weak mass-transit infrastructure system. As a consequence, the benefits of passenger rail are heavily politicized, making it difficult for advocates of rail technology to establish any legitimacy for rail infrastructure development in the political arena (Perl, 2002). Opponents of renewed passenger rail in the United States, consist of competing industries, such as the oil industry, fiscal conservatives, pro-market institutions, and a number of Republican politicians (APTA, 2012; Perl, 2002; Nagourney; 2018). Their opposition is grounded in arguments that uphold the current fossil fuel-dependent system (APTA, 2012). Passenger rail infrastructure and efforts to decarbonize the economy are viewed as an economic burden rather than stimulant of economic growth (APTA, 2012; Newell and Paterson, 1998).
Seymor Melman (1975) argues that technological development is not a natural force with an autonomous momentum that shapes society, but rather, it is “applied in accordance with specific social criteria wielded by those with economic decision power in the society”. Economic reconstuctionists, including Seymour Melman, Barry Commoner, and Paul Goodman, argue that society has the power to change the dominant technological configuration and production system by envisioning an ecological production system that uses alternative green energy sources in order to stop the nation’s dependence on fossil fuel energy (Feldman, 2016). Investment in alternative energy systems, green transportations systems, and ecological spatial planning is considered to be essential for shifting the demand away from oil (Commoner, 1997; 1990; Goodman, 1962). This would lead to opportunities for establishing a domestic production system that provides sustainable growth and green jobs (Feldman, 2009). Indeed, high-speed rail provides the opportunity to not only minimize the nation’s carbon footprint, but also, effectively compete with the speed of airplanes and flexibility of automobiles (APTA, 2018). The development and maintenance of high-speed rail, and the manufacturing of rail cars, have the potential to create green jobs by revitalizing the domestic rail industries (ibid). Advocates of high-speed rail technology have the capability to re-establish its legitimacy as a key component of the nation’s economy and societal welfare.
The development of green transportation is impeded by the state’s inaction to address climate change and protect the passenger rail industry. In America’s market-based economy, political processes are influenced by the power of economic capital, where policies can be shaped by private interest, limiting the state’s ability to address issues concerning public interest. (Newell and Paterson, 1998). For instance, fossil fuel companies are able to secure their interests in state politics due to “the structural power of capital, deriving from the role of the state within capitalist societies” to maintain conditions for capital accumulation, which limits opportunities to deal with global warming (ibid). The oil industry and related fossil fuel-dependent industrial complexes are able secure their private interests due to the state’s dependence on oil for capital accumulation (ibid). The state relies on the assumption that “growth in energy production and consumption is fundamental to economic growth” resulting in the belief that there is a trade-off between economic growth and energy consumption reduction (ibid). Thus industries and policies that aim to lower energy consumption are often viewed as a threat to the state’s source of capital for accumulation (ibid). The idea of investing public funds into infrastructure that would minimize fossil fuel energy becomes politicized as a high risk investment with enormous cost and minimal economic return or social benefit (APTA, 2012).
Political forces have helped shape the historical development of the rail industry, which has led up to its current structure that is characterized by policy stagnation and political conflict. During the Great Depression, the passenger rail industry lost its source of external private capital and was left unprotected by state intervention from growing automotive competition (Cohen, 2009; 2010). The government failed to intervene in the transport sector, allowing private corporate interests, rather than public interest, plan the structure of the American transportation system (ibid). Private financial institutions divested from rail, largely as a result of the creation of the public financial intermediary, the Reconstruction Finance Corporation (ibid). The RFC was built to relieve the private bank balance sheets of illiquid and devalued rail securities, but this also removed private investors from rail capital markets—which had formally been the rail industry’s primary source of external capital (ibid). This structural change combined with the government’s failure to rationalize the rail industry when it became vulnerable to the growth of highway traffic, led to the dominance of the automotive industry by the 1950s (ibid).
Continually, passenger rail became emancipated from freight rail operations to save them from the burden of passenger travel decline in 1958 (Perl, 2002). The Interstate Commerce Commission promoted the argument that rail technology was obsolete for passenger travel, an idea shared by railroads (ibid). The solution was to allow the private railroads exit passenger rail and continue with their freight operations, granting private interests the benefit of becoming economically unburdened by passenger rail operations, and the costs to be borne by workers, passengers and communities (ibid). This development invigorated “major political tensions regarding the role of private railroads in meeting public interest responsibilities” and resulted in the loss of “incentive to create a passenger train renewal strategy” (ibid). Despite freight rail’s exit from passenger rail the freight rail industry declined in the mid 1960s from rising competition, proving that competition from auto and air was in fact affecting the entire rail industry (ibid).
Political opposition from passenger rail advocates continued and resulted in the creation of Amtrak in 1970 (Perl, 2002). Amtrak is a quasi-public enterprise with a “for-profit” mandate and limited structure (ibid). The institution represents a political compromise to satisfy opposing political demands, that failed to effectively address the structural issues of passenger rail (ibid). Amtrak was created with the intention of avoiding the problem of passenger rail by constructing the idea that passenger train renewal was possible without burdening the federal budget. Moreover, it was made to block future rail passenger policy development and to shift the blame of further passenger rail decline onto Amtrak (ibid). Proponents of the current regime of capital accumulation from pro-market institutions, such as the Cato Institute and Reason Foundation, use Amtrak’s failure to create a profit and the subsidization it receives, as political rhetoric against publicly funded passenger rail infrastructure projects, such as high-speed rail (ibid). These structural changes compound rail technology’s inability to regain legitimacy for long-term government investment, by allowing proponents of the status quo regime of capital accumulation to place blame of passenger rail’s failure to turn a profit onto Amtrak for its leadership and/or rail technology’s obsolesce rather than the government’s actions. And thereby, negating any constructive efforts to transform the transportation sector into a green transportation sector as passenger rail is argued to be an economic burden.
Mechanisms for Funding and Institutional Capacity
The most fundamental challenges to the development of high-speed rail in the United states States are: the lack of institutional capacity, both administrative and technical, to implement passenger rail infrastructure projects, and a lack of committed public funding and access to private capital (Dunn, Jr., and Perl 1996). Various factors contribute to the lack of funding and financing mechanisms. First, the shift from private to public financing and operations of passenger rail created implications for private capital investment in passenger rail infrastructure (Cohen and Kamga, 2013). Private financing for high-speed rail projects requires strong financial commitment from the government in the form of public grants, loans and credit guarantees, to attract private sector participation (ibid). Moreover, the current regime of capital accumulation affects the government’s prioritization of budget allocation. The massive defense budget, for example, is considered vital for the current regime based on fossil fuel energy (Christopher, 2018). Any disruption in the nation’s oil supply is viewed as a threat to national security, resulting in recourse resource wars, which are justified as a means to protect the economy (Klare, 2009). This leads to the crowding out of the federal budget, such as the transportation budget. For instance, in 2018, defense spending amounted to $700 billion, whereas passenger rail received $2.8 billion (Myer, 2018; RPA, 2018). Furthermore, the political conflict over the legitimacy of passenger rail and Amtrak’s operations, affects the government’s transportation budget decisions. The federal budget for the transportation sector has consistently favored other transportation modes over passenger rail (Perl, 2002). Aviation and highway infrastructure have benefited from long-term federal funding for investment whereas rail has received negligible amounts of federal capital in comparison (ibid). For instance, Amtrak has been isolated from trust funds, a source of revenue that supports various forms of infrastructure, such as airport and air traffic control infrastructure, since the corporation was supposed to be a for-profit enterprise (ibid).
Finally, the absence of the institutional capacity to implement Obama’s agenda for high-speed rail in America further fuels political conflict over rail technology’s legitimacy creating arguments over the costs of launching new projects (Perl, 2012). In 2009, Obama added $8 billion dollars to the fiscal stimulus program for investment into high-speed rail as a part of the American Recovery and Reinvestment Act and created the High-Speed Intercity Passenger Rail Program (ibid). This program included another $1 billion per year for the next five years for further investment (ibid). However, there were new constraints that coincided with the program (ibid). The Federal Railroad Association outlined the strategy for the renewal of passenger rail with high-speed rail, but neglected to assign human resources with technical knowledge of passenger train, such as Amtrak, to meet the goals of high-speed train development (ibid). The political conflict surrounding Amtrak was most likely the reason why it was not given leadership (ibid). Instead, state governments, with the least amount of technical resources for passenger train development, have been left up to the task of managing potential projects with Amtrak and freight railroads (ibid).
Moreover, there is an absence of an industrial complex for the manufacturing of passenger trains in the United States, which is a constraint on the institutional capacity of the nation to reinvent its passenger rail infrastructure (Perl, 2012). Currently, passenger train equipment is designed and manufactured by Canadian and European manufacturers and assembled from kits sent to the United States (ibid). The proposal neglected to plan and develop a strategy that would overcome this aspect. Especially taking into consideration the “Buy America” restrictive mandate imposed within the ARRA, a contingency that theoretically would help stimulate the American economy, if a manufacturing industry for passenger train existed or a strategy to organize human resources and funds to revamp the sector were initiated (ibid). For example, the military industrial complex could be converted into a civilian one in order to reallocate the military budget for the funding of research, development, and manufacturing of clean energy technology and green transportation technology in America (Feldman, 1991).
Rail technology has struggled to reclaim its legitimacy as a driver of economic growth and provider of social benefits since its decline in the mid-20th century. Advocates argue that it is an important component for decarbonizing the economy and stimulating sustainable growth. While proponents with vested interests in the current regime of capital accumulation dispute its benefits arguing that passenger rail, including high-speed rail is an unnecessary economic burden on the state and taxpayer. A series of policy changes have shaped the historical development of the rail industry, which has led up to its current structure characterized by policy stagnation and political conflict. The federal government’s lack of committed prioritization to the rail transportation sector for resource allocation, such as funding and technical expertise, further deepens the structural issues that passenger rail faces.
Figure 2.1 Diagram of Theoretical Framework
The purpose of this research is to understand what is impeding the development of green transportation infrastructure in the United States. This research aims to answer the following questions: What are the structural barriers to the development of green transportation in the U.S., particularly the development of California’s high speed railway? To answer these questions a comparative case study of The California High-Speed rail and the Northeast Corridor’s high speed train is used as the methodology. A case study helps to understand how key factors seem to influence an outcome (Gerring, 2004). Moreover, comparative case studies allows for the ability to compare and contrast the extent to which factors appear to have affected the outcome in each case (Eisenhart, 1989). The cases were selected based on the recognition by previous research identifying that the political and institutional obstacles for passenger rail transportation policy development are specific to North America (Dunn, Jr. and Perl, 1996). Therefore, the selection focused on cases within the United States. The Northeast’s high speed rail was selected because it is the single success story in the United States and the high-speed rail in California is the only other high-speed rail project in the country that has began construction.
Data Collection and Operationalization
The data collected for this research includes sources in the form of official reports, government documents, newspaper articles, research articles, and scholarly books. The process of collecting data consisted of a search for sources that were related to the independent variables corresponding to each case study. The California High-Speed Rail case refers mostly to data from primary sources as the project is currently under development. Whereas the Northeast’s high-speed train refers mostly to secondary data since it has been historically documented and previously researched.
As shown in below in Figure 4.1, the theory section of this paper identifies three independent variables, the legitimacy of rail technology, political influences, and mechanisms of funding and institutional capacity, which are considered to affect the dependent variable, the development of high-speed rail in the United States. The operationalization questions, shown in the final row of Figure 4.1, are questions that link the theoretical framework to the empirical data. Thus the operationalization questions function as qualitative mechanisms for measurement in order to understand how each independent variable affects the development of high-speed rail in each case.
Figure 3.1 Implementation Model
Northeast Acela Express
The Legitimacy of Rail Technology
Senator Claiborne Pell from Rhode Island sparked the discourse for passenger rail renewal using new technology (Perl, 2012). Pell was one of the few public officials in the 1960s that believed it could “boost the productivity and augment the social capital of communities along America’s northeast seaboard” (ibid, 2012). Pell argued against the idea that railroad technology was obsolete. It was rather a matter of ‘“technological retardation’retardation”, which could be overcome with innovation (ibid, 2012). He identified that America’s Northeast Megaregion could benefit enormously from renewed railroad infrastructure development between Boston, New York, and Washington to meet the region’s unique mobility needs due its dense population and lack of physical space for new infrastructure, such as airports and highways (Perl, 2002).
In 1965, the High Speed Ground Transportation Act was initiated to direct the first federal funding for intercity passenger train infrastructure with the aim of determining “whether high-speed intercity transportation can take passengers and vehicles off of highways” (The New York Times, 1965). It was approved under the Johnson administration as a part of the Great Society program, which aimed to address transportation infrastructure, poverty, urban renewal and education (Perl, 2002). In fact, the bill counteracted the prior policy agenda that aimed to help exit passenger train transport due to competition from auto and aviation (Perl, 2012).
Mechanisms for Funding and Institutional Capacity
The Office of High-Speed Ground Transportation (OHSGT), which became of a part of the US Department of Transportation in 1967, was responsible for organising the partnerships with rail industry partners, and the private sector partners were responsible for project implementation (Perl, 2012). OHSGT was given a budget of “$90 million, equivalent to $622 million in 2010 dollars” (ibid). OHSGT created a partnership with Pennsylvania Railroad (PRR) to create an electric train that would connect New York City and Washington, DC in under three hours at an average speed of 120 miles per hour (ibid). PRR helped build and design the Metroliner, and matched the $11 million in federal funds with $44.5 million in private capital (ibid). Moreover, the railroad manufacturers, The Budd companyCompany, General Elective and Westinghouse, partnered in the PRR’s $21 million Metroliner rolling stock contract (Perl, 2002). The rail industry partners contributed a significant amount of private capital, technical knowledge and experience to the project (Perl, 2012). New rail infrastructure was not required to be built because PRR already had electric rail infrastructure (ibid). Therefore, the project took only four years (Perl, 2002). This helped prevent any delays from environmental impact assessment reviews and opposition from local citizens (ibid). However, there were issues with the compatibility of the electric high-speed trains and the existing infrastructure since it was not intended to accommodate high-speed trains (ibid). It also shared the tracks with freight, intercity passenger, and commuter trains (ibid). Thus the trains only reached 120 mph instead of the projected 160 mph (ibid). The travel time from New York to Washington, DC was 3 hours and was not as competitive against other modes of transport as hoped (ibid). Overall, the Metroliner was able to cover its costs and generated an operating profit (ibid).
Due to the industrial crisis and Penn Central’s subsequent bankruptcy, Amtrak became responsible for the passenger operations in the Northeast Corridor (Perl, 2012). Amtrak sought after federal funding between the years 1996 and 2003 to reattempt the pursuit of high-speed rail for the megaregion (ibid). Amtrak received $3.2 billion for electrifying the tracks between Boston and New Haven and ordering 20 new electric train sets (ibid). However, the private partnerships that enabled the Metroliner’s existence and success no longer existed (ibid). As a result, the new Acela trains were not optimal as they were extremely heavy. This was due to the Federal Railroad Administration’s safety regulations and the fact that the Acela trains were not made by domestic manufacturers (Perl, 2002). Therefore, there was minimal development of safety regulations as there was not any pressure to do so (ibid). Development and testing was also rushed to meet the production schedule (ibid). Thus it was recognized by the Government’s Accountability Office that the project’s implementation reflected Amtrak’s lack of technical and administrative knowledge (ibid). This represents Amtrak’s constrained institutional capacity to develop and implement new passenger train technology and the lack of a domestic industrial complex to help to support America’s passenger rail development. Nonetheless, Acela express, and predecessor Metroliner, are considered successful attempts to prove high-speed rail’s legitimacy. In fact, the Acela has been able to capture 75 percent of the air/rail market share between Washington and New York and 54 percent of the air/rail market share between New York and Boston (Nixon, 2012).
California High-Speed Rail
The Legitimacy of Rail Technology
The discourse that structures the political debate over the California High-Speed rail project is contingent on whether or not climate change is recognized as an existential threat and high-speed rail technology is recognized as necessary component to decarbonize the economy. Advocates, including, labor unions, transportation agencies and grass-roots coalitions, argue that the project, despite its high cost, is essential for sustaining the population growth in California, ecological security purposes, creating green jobs, and sustainable economic growth (CA4HSR; Zbur, 2014).
According to the president of California League of Conservation Voters, “California’s population is projected to grow to 50 million over the next several decades. It is estimated that the cost of meeting the transportation requirements of California’s growing population by building more freeways and airport runways – if this could be done at all – would be at least $150 billion, more than double the cost of building the high-speed rail system from Los Angeles to San Francisco” (Zbur, 2014). Moreover, the California Labor Federation states that, “we have the opportunity to develop the HSR sector, providing technology, training and expertise for the nation and the world and increasing demand for skilled workers [..] High-speed rail is California’s ticket to economic recovery and to putting workers back to work”.
Opponents of California’s high speed rail project, which include fiscal conservatives, and pro-market institutions, criticize the project based on notions of American exceptionalism i.e. it will not work due to the nation’s geography and culture, the high cost of high-speed rail, the lack of political and popular support, the notion that rail corridors are built to nowhere, the idea of high-speed rail subsidization, the assumption that intercity and high-speed passenger rail is obsolete, and the argument that its benefits, including its environmental benefits, are overstated by proponents (APTA, 2012). The discourse is largely driven by pro-market think tanks that are financially backed by the oil industry, including the Cato Institute, Americans for Prosperity, Heritage Institute and the Reason Foundation, that aim to spread misinformation through grass-roots efforts, blog articles, and reports (Tabuchi, 2018). For instance, the 2008 report by the Reason Foundation called The California High Speed Rail Proposal: A Due Diligence Report and its 2013 updated version of the same report, disputed the California High-Speed Rail Authority’s business plans, calling them “inaccurate” and “misleading”. Opponents also consist of local farmers fighting against the land acquisition required for the project and local residents near to the project who do not want it in their backyard (Koseff, 2019). Furthermore, the project’s challenges, including cost overruns, project mismanagement and project delays, are intensifying the debate over the project’s future and the capability of California to build high-speed rail (Davis, 2019).
There are political obstacles that the project has been facing. The rising costs have resulted in a loss of political support, including California’s governor, Gavin Newsom, and President Donald Trump (Fuller et al., 2018; Nagourney, 2018). In the backdrop of the project’s struggles and waning political support, the oil industry has an enormous amount of economic capital to influence public policy through lobbying, financing political campaigns, and funding various think tanks to influence public opinion and the media (Tabuchi, 2018). For instance, the oil industry spent over $124 million in lobbying efforts in 2018, and the competing transport industries, auto and air, spent over $67 and $91 million on lobbying (CPR, 2018). In contrast, the California High Speed Rail Authority spent $79.9 thousand dollars on lobbying in 2018 (ibid). The intense political conflict over the project and conservative lobbying efforts have turned the project into a partisan issue, one that used to be supported by both Democratic and Republican leaders in California (Adams, 2012; Turner, 2014; Nagourney, 2018). However, in more recent years Californian Republicans refer to the project as a waste of money (Vartabedian, 2017).
The former governors of California, Jerry Brown, a Democrat, and Arnold Schwarzenegger, a Republican, loyally supported California’s high-speed rail project (Nagourney, 2018). However, in February 2019, the newly elected Democratic governor of California, Gavin Newsom, announced that the project would be significantly scaled back due to the costs: “The current project, as planned, would cost too much and respectfully take too long. There’s been too little oversight and not enough transparency […] Right now, there simply isn’t a path to get from Sacramento to San Diego, let alone from San Francisco to L.A. I wish there were” (Willon and Luna, 2019). Newsom stated that California would only build the operating segment between Merced and Bakersfield in the Central Valley for now, a section that has funding, while the rest of the project will be reassessed as there is not enough funding for it (Nelson and Mozingo, 2019). This sparked the Trump administration to initiate efforts to try to cancel $929 million in grant funds, and The Transportation Department declared it would try to get an additional $2.5 billion grant back that had been allocated to California (Karni and Medina, 2019). CHSRA stated that this action would be “unwarranted, unprecedented and harmful to the people and the economy of the Central Valley, California and the nation” (Davis, 2019).
Mechanisms for Funding and Institutional Capacity
California has been trying to build high-speed rail for decades (Cohen and Kamra, 2013). First in 1981, but it was quickly abandoned by 1984, due to issues with raising public capital, political opposition and strict environmental regulations (ibid). In 1996, the California Intercity High Speed Rail Authority (CHSRA) was created as a state-run organisationorganization with the responsibility of creating a financial plan and organizing private partnerships for construction and operations (ibid). The authority’s plans led to the public funding ballot initiative called Proposition 1A, which California voters approved of for issuing $9.95 billion dollars in bonds (CHSRA, 2018). The project was supported by grants provided by the American Recovery and Reinvestment Act in 2009, and subsequent annual federal grants amounting to $3.5 billion (ibid). However, this is only enough to begin the initial construction segment of 130 miles in the Central Valley, which is currently under construction (ibid). Additionally, the authority received $650 million as a one-time funding and 25 percent continuous funding from Cap-and-Trade proceeds as the result of legislature passed in 2017 (ibid). The CHSRA has released a series of different financial plans over the years, all of which have included escalating costs (Cohen and KamraKarma, 2013). The total costs of the project have doubled since 2008, with an estimation now reaching $77.3 billion (CHSRA, 2018). As of 2018, the authority has $12.7 billion in secured funding, which is enough to cover the $10.6 billion cost of the Central Valley segment, $15.6 billion in unsecured future funding, which is just short of enough to cover the remaining cost of $18.9 billion for the Valley-to-Valley segment connecting San Francisco to Bakersfield, and zero funding to cover the remaining cost of $47.8 billion for Phase 1 connecting San Francisco to Anaheim (Howle, 2018).
The rising costs and other issues concerning the project have fuelledfueled political conflict over the years, thus it is important to focus on why they have arisen. First, the project has not received enough funding and financing to support the project (Nagourey, 2018). On the one hand, the authority relied too heavily on potential legislature that would increase public funding for the project and the authority over estimated the amount of private capital that would be attracted for investment (Davis, 2019; Cohen and Kamga, 2013). On the other hand, more federal legislation is actually needed to get sufficient long-term public funding for the rest of the project and other similar projects (Nagourey, 2018). This would open up attraction for investors to participate as their financial risk would be minimized (Cohen and Kamgra, 2013). Additionally, a long-term source of funding is needed in order to finance future cash flows (CHSRA, 2018). For instance, the federal government can open up access to public funding that is commonplace for other modes of transport: “highway funding has historically been built into state and federal budgets, but transit funding usually requires a vote to raise taxes, creating what experts call a systematic bias toward cars over trains and buses” (Dunn, Jr. and Perl, 1996). Highway and aviation have trust funds, which are proceeds from federal fuel taxes and fees to fund the infrastructure, and yet, high-speed rail has no such long-term federal funding mechanism (ibid).
Additionally, the funding that it has received was coupled with new constraints that have resulted in cost overruns and project delays (Davis, 2019). The law enacted by Prop 1A constrained the project as it was incredibly detailed with specific project outlines, such as the route and minimum speed (ibid). It also included a requirement that it would not require local, state, or federal operating subsidies once the project was finished. (ibid). This contributed to the project’s delays brought on by lawsuits (ibid). Additionally, the $9 billion in bonds was a fixed amount that would not adjust with inflation (ibid). Furthermore, the portion of the federal grant money that California was awarded from the 2009 stimulus program was stipulated with deadlines that were unrealistic for the project, since it was not ready for construction and the technology was new to America (ibid). The federal funding was allocated to the construction of the project before the environmental analysis was complete, contrary to how the mass transit new starts program, which requires all environmental analysis to be complete before funding is requested (ibid). Moreover, the funding was granted for the construction of the Central Valley segment that was deemed as an independent utility, which means it is not connected to any other operating segments, rather than the minimum standard that is applied to mass transit program, which requires it to be a stand-alone project (ibid). Thus, the money was allocated to the project without any guarantee that it would connect to anything else, and before there a budget was allocated for the purchasing of trains for the segment (ibid).
Third, cost overruns and ridership underestimation are common characteristics of infrastructure projects worldwide, especially in the case of rail, due to institutional and political factors (Flyvberg, 2007; Flyvberg et al., 2002). There is a political fight over the competition of scarce resources in the transportation sector (ibid). Cost and ridership estimations are used in the conventional cost-benefit analysis for infrastructure decision-making (ibid). However, research has found that there tends to be a bias to create optimistic estimates for the purpose of competing for federal dollars and getting projects approved (Flyvberg et al. 2003). Thus, there is a need for “institutional checks and balances”, which must include independent studies with an empirical analysis that adequately assesses risk as a supplement to the conventional cost-benefit analysis as the main means for documenting and deciding on urban rail projects (Flyvbjerg, 2007). In fact, the audit report for California’s high-speed rail project identified that the cost estimate for the entire project was not independent, only the initial segment was independently reviewed (Howle, 2018). This practice would have significantly reduced bias and provided more realistic cost estimates from the beginning (ibid).
Despite the nation’s political structure and the state’s tendency to emphasise auto and air transport over rail, Senator Pell was able to create a discourse that legitimisedlegitimized the need for federal investment in new passenger rail technology. Pell’s actions and support from the Johnson administration placed high-speed rail on the policy agenda. The project had complete institutional capacity, including fiscal, administrative, technical and operational expertise, due sufficient federal funding, the creation of federal agency, and a partnership with a private railroad and private domestic railroad manufacturers. Amtrak’s attempt at high-speed train revitalisationrevitalization with the new Acela Express and expansion of electric tracks, was not as successful as the Metroliner. Amtrak had a limited institutional capacity to manage the project as it did not have a partnership from domestic rail manufacturers that would provide the technical expertise.
In the case of California’s high-speed rail, the discourse is divided between advocates, who consider the long-term benefits of sustainable growth and ecological security to outweigh the cost, and opponents, who argue that passenger rail is an economic burden, especially considering the rising costs of California’s high-speed rail. The political conflict is fuelled by political opposition with vested interests in the oil industry. Moreover, the California High Speed Rail Authority’s mismanagement of the project, which has resulted in cost overruns and project delays, reflects the authority’s lack of institutional capacity, such as technical expertise. The consequences of this contribute to the political conflict over the legitimacy of continued spending of the project. Sporadic investments from the federal government have not been enough to support the project, and in multiple ways has contributed to the authority’s limited capacity. The research has shown that the authority’s capacity for project implementation has been limited due several structural barriers, including political conflict, lack of federal commitment for long-term funding, lack of support for technical expertise, and insufficient regulation.
To overcome these structural barriers, high-speed rail, and other green transportation infrastructure projects, need long-term financial support from the federal budget, similar to other modes of transportation infrastructure, such as highways. Moreover, there is a need to substantially downsize the military budget in order to support green conversion efforts by investing in the research and development of alternative energy systems and green transportation technologies (see Feldman, 1991). Additionally, to help establish financing mechanisms for large infrastructure projects, an independent National Infrastructure Bank (NIB) could be created. President Obama tried to establish a national infrastructure bank in 2009, however, it did not receive Congressional approval (Davis, 2016). Such an institution “would allow [the U.S.] to attract private investment for public purposes, and it would ensure that projects are funded on the basis of economic and social benefit, not political gain” (Galston and Davis, 2012). The institutional capacity to implement high-speed rail projects is contingent on support provided by technical expertise. This support could come from a combination of a domestic revival of rail manufacturing, and Amtrak, which could be supplemented by foreign expertise. Additionally, there is a need for consistent regulatory practisespractices overseeing management practisespractices, such as independent studies that would prevent bias in the cost and ridership estimations. Furthermore, high-speed rail and other mass-transit infrastructure development need to become a priority for the policy agenda. The proposed Green New Deal represents some support growing in the political arena (Irfran, 2019). However, there needs to be more political discourse that supports rail technology’s legitimacy as a source of sustainable economic growth. Part of the problem is that fossil-fuel industry uses their economic buying power to influence government policy and public opinion. To counteract this, a large coalition between environmentalists, advocates of green transportation, peace groups, and labourlabor unions could be built. There are several relevant coalitions in California and others spread out across the country, which could build an alliance.
This research study concludes that the structural barriers to the United States’ development of green transportation infrastructure, in particular high-speed rail, include the lack of federal prioritization for modes of green transportation. This includes long-term commitments for funding green transportation infrastructure and establishing a domestic mass-transit production system. This limits the institutional capacity to implement infrastructure projects, which creates a negative feedback loop that fuels political conflict over the legitimacy of rail technology.
This research paper was written by Evelina Jonsson, a Global Political Economy Master's student at the department of Economic History and International Relations at Stockholm University, for a course on Energy & Security.
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