There was a very competent young woman in an organization I did some work for whose appearance could only be described as stunning. She was one of those people whose entrance into an office brought all work to a halt, at least temporarily.
She was always very professional and pleasant to me, and, as far as I could see, to others as well. When I mentioned that to a young colleague who carpooled to work with her each day, though, he said, “You wouldn’t say that if you knew her better.”
That was the end of the conversation, for he didn’t offer any clarifying information. Exactly what she did during those morning and evening automobile rides to earn his disdain, then, remains a mystery. A good guess, though, is that it wasn’t much. Based on anecdotal evidence, it takes very little to irritate people within the confines of a carpool.
That is just one of the reasons why most Americans – 77 percent of us at last count by the U.S. Census Bureau – drive to work alone.
Consumer preferences regarding carpooling are expressed quite clearly and can be observed easily on any freeway during rush hour. There are very few passengers. Most cars contain only their drivers, who, like bears in the wild, prefer their solitude.
Whether they will continue to hold on to this preference in the face of rising gasoline prices remains to be seen. The initial evidence, though, indicates that consumers would choose to downsize their cars before they would carpool.
There’s a lot not to like about carpooling – at least if you believe the stories that people recount. For some reason, carpooling doesn’t seem to bring out the best in people.
From an economics standpoint, though, carpooling is undoubtedly the most efficient action we could take on the energy front. It would have a significant effect on both energy consumption and pollution, and would reduce the indirect costs of traffic congestion. It is essentially free of any direct operating or investment costs, public or private.
But while carpooling can slow the rate of growth in imported oil, it is not an acceptable substitute for an energy policy.
A real energy policy must address three separate but related issues in the energy picture: energy conservation, energy independence and environmental considerations. Each of these is deeply affected by the microeconomics of consumer choice and also by the macroeconomics of the U.S. and world output and trade.
The raw facts of energy economics are daunting. Our markets are dependent on foreign suppliers for 60 percent of our consumption. The rapid economic growth of China and India has raised the global demand for oil, with consequent rises in price. Moreover, an increasing amount of the world’s production is controlled by governments that are unstable or are actively hostile to the United States, raising the potential cost of our energy dependence.
Eighty-five percent of the energy consumed in the U.S. is produced from fossil fuels: oil, coal and natural gas. Although coal is domestically produced and plentiful, both coal burning and coal mining have been resistant to solutions to the environmental and health issues they raise.
Automobiles are a major source of energy consumption and pollution, so the substitution of plug-in rechargeable electric cars is attractive, even though it is based on uncertain economics and environmental effects. But while they help with air pollution, plug-in cars do not buy us much in terms of energy consumption or independence, since electric power production is also dependent on imports of oil and gas.
Ethanol offers some hope of reducing our energy dependence on imports, but the economics of its production and distribution are still being sorted out. It is already competing with food production for farm acreage, though, which is affecting consumer food prices. And short term growth in its usage will probably be fueled partly by imports from Brazil, which enjoys a comparative advantage in production costs.
Nuclear power offers a clear improvement in terms of energy consumption and dependence, but its investment costs are brutal and its waste products present unsolved economic and environmental questions.
Clearly, what is needed is a national energy policy for the long run that will sort out the plusses and minuses of these and other energy options and steer a course to get us out of the fix we’re in. In the short run, though, over the next few years we are very likely facing sharply rising oil prices because forecasted production will be inadequate to meet demand growth.
In the short run, carpooling may not be the answer we like, but it is an answer. Maybe we can all get along, at least for the drive to work and back.
James McCusker is a Bothell economist, educator and consultant. He also writes “Business 101” monthly for the Snohomish County Business Journal.
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