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Moving Forward in Hamilton:Transportation, Sprawl and Environmental Pricing ReformHamilton Transportation Summit 2011March 9, 2011

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Sp dt moving_forward_in_hamilton_-_transportation_sprawl_and_epr[1]

  1. 1. Moving Forward in Hamilton: Transportation, Sprawl and Environmental Pricing ReformHamilton Transportation Summit 2011 March 9, 2011 David Thompson Director, Sustainable Communities Sustainable Prosperity www.sustainableprosperity.ca
  2. 2. Overview• Context and challenges• Environmental Pricing Reform - EPR• EPR tools for local governments• Transportation, Sprawl and EPR• Challenges• Conclusions Making markets work for the environment 2
  3. 3. Context• Employment lag behind economic recovery• Green goals vs. results – gap widening• Local financing challenges to get worse? – New downloading (unfunded) – Reduced transfers and grants• Age of cheap energy has passed• Crisis? – Not yet - danger and opportunity Making markets work for the environment 3
  4. 4. Transportation problems• Traffic-caused smog in Toronto – kills 440 people / yr. – Costs $2.2B / yr.• Collisions cost Hamilton $300M to $500M / yr. – Future congestion with increased volume (TMP) – Add all other costs, total ten times higher.• Road legacy costs: infrastructure maintenance, policing, EMS, repair and replacement Making markets work for the environment 4
  5. 5. Closely related: sprawl problems• Eats up farmland• Hollows out established neighbourhoods• Locks in automobile dependency• Makes transit less feasible• Health – heart disease, diabetes, cancers, etc• End of cheap oil = homeowner financial risks• Legacy costs higher with sprawl – Lancaster,California: $5,500 vs $10,800 – Calgary: Plan It 33% cheaper than status quo Making markets work for the environment 5
  6. 6. Traditional policy tools• Transportation planning and infrastructure – Emphasis on active transport > transit > car (e.g. TMP)• Land use planning and bylaws – mixed use, compact devo, urban boundary, brownfield devo. [e.g. GRIDS]• Public education and exhortation• Etc.• Have they succeeded? Enough? Making markets work for the environment 6
  7. 7. What are the actual causes?• Consider “Home X” – Nice, 3 BR, 2 bath, 1800 sq. ft., finished bsmt• Two location options: – Westdale – Suburban greenfield• Neighbourhoods are different – amenities, community, access to town, etc.• Another difference? Making markets work for the environment 7
  8. 8. The elephant in the room: prices• Price is a major influence on decisions• For individuals & firms, homebuyers & developers• Can “urge” infill, provide public education, create targets for downtown development• But if sprawl cheaper, what will happen?• Organic produce vs. regular produce?• Bullfrog electricity vs. regular electricity? Making markets work for the environment 8
  9. 9. Environmental Pricing Reform (EPR)• EPR: adjusting market prices to reflect environmental costs and benefits• A response to problems – Nobody wants problems; no ‘bad guys’ – Current set of incentives creates problems• Approach: change the incentives – Align financial incentives with environmental goals – “Tax bads, not goods” – We do it already: RRSPs, tobacco taxes…• Outcomes – environment, economy, jobs, revenue diversification, etc. Making markets work for the environment 9
  10. 10. EPR toolsIssues and tools:• Buildings and energy efficiency – On-bill financing: pay back with savings• Solid waste – Pay-as-you-throw to subsidize recycling• Water – Inclined block billing – Stormwater Making markets work for the environment 10
  11. 11. Adjusting which prices?• Three examples: – Transportation prices (brief – later presentation) – Development cost charges – Property taxes – Stormwater (not cover – later presentation) Making markets work for the environment 11
  12. 12. Transportation pricing (brief)• Road pricing – Remove subsidy, examples worldwide (RHC, Linc?)• Parking pricing – Free parking isn’t free – taxes, wages, prices – Parking stall fee: level playing field - centre & fringe• Vehicle registration – Feebates, PAYD• Affordable or even free transit? – E.g. Calgary downtown Making markets work for the environment 12
  13. 13. Development cost charges• Development entails costs for a city – E.g. roads, facilities, policing, libraries, etc. – Costs vary depending on location• DCCs: charges on development to help pay costs• Hamilton DCCs: mixed bag – Zero rate downtown core, brownfield credits – Could scale to distance from centres – Could reduce DCCs near transit Making markets work for the environment 13
  14. 14. Property Taxes• Taxes = value x rate (encourages sprawl) – Land is cheaper at fringes, so taxes are lower – Rate are lower in smaller communities, so taxes lower – Change: reduce rates at centers, raise at fringes• Proximity to transit – Rates are lower where no transit, or poor service – To encourage density near transit, reverse it• Yes, there is history and rationale – But also there is the future to consider Making markets work for the environment 14
  15. 15. Challenges, and overcoming themCan arise from… • Equity and fairness o Smart instrument design • Vested interests o Change the incentives of those interests • Fiscal impact o Not just subsidies – include revenues Making markets work for the environment 15
  16. 16. Another challenge? Politics Making markets work for the environment 16
  17. 17. Politics• Alberta: home of anti-tax, anti-gov’t hysteria?• Calgary IPSOS Reid 2010 Making markets work for the environment 17
  18. 18. Conclusions• General principle: get root causes of problems – Often root cause is price • A powerful opponent • A powerful ally• EPR can address many issues – environment, economy, jobs, revenue diversification• Diverse challenges. Solutions: – Policy design, communications, stakeholder work, etc.• Tailored process needed – Goals, research, design, consultations, etc. Making markets work for the environment 18
  19. 19. ReferencesHealth impacts of sprawl:• Alberta Health Services, “Urban Sprawl and Health” (April 2009) http://www.albertahealthservices.ca/poph/hi-poph-hpp-info-urban-sprawl.pdf• Johnson and Marko, “Designing healthy places: Land use planning and public health” (Capital Health, 2007) http://www.capitalhealth.ca/NR/rdonlyres/eh4qelt76mejjmxogexsmbh5qrs32flyyiknqr3z6jn6xcfgyj qbeqpip3xrsztvr27joqqj2bd2pyr7myh74cnflib/DesigningHealthyPlaceslandusePublication.pdf.• More: Bray, Vakil, Elliott, “Report on Public Health and Urban Sprawl in Ontario – a Review of the Pertinant Literature” (Ont College of Family Physicians, Jan 2005) http://www.ocfp.on.ca/local/files/Communications/Current%20Issues/Urban%20Sprawl-Jan-05.pdfEnvironmental Pricing Reform• Thompson and Bevan, “Smart Budget Toolkit: Environmental Pricing Reform for Municipalities” (Sustainable Prosperity, 2010) http://www.sustainableprosperity.ca/article172.• Thompson, “The Power of Prices and the Failure of Markets: Addressing Edmonton’s Environmental and Fiscal Challenges” (City of Edmonton, June 2010). http://www.edmonton.ca/city_government/documents/Discussion_Paper_17_Power_of_Prices_a nd_Failure_of_Markets.pdf Making markets work for the environment 19
  20. 20. David ThompsonDirector, Sustainable CommunitiesSustainable Prosperitydthompson@plrc.cawww.sustainableprosperity.ca Making markets work for the environment 20