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FOR IMMEDIATE RELEASE:
DATE: June 20, 2002
CONTACT: Craig Cheslog (510-444-3041)

TRANSPORTATION CONGESTION STUDY EXPOSES ONE OF DRIVING'S HIDDEN COSTS

OAKLAND, Calif.—The 2002 Urban Mobility Study released today by the Texas Transportation Institute reveals a market price failure permitting drivers to avoid paying the full costs of their automobile use.

The study analyzed traffic in 75 U.S. cities. It found that the total congestion bill, in wasted time and fuel, for these cities "came to $67.5 billion."

"While consumers love to complain about supposedly high gasoline prices, the price drivers pay at the pump is actually misleadingly cheap," said Redefining Progress Executive Director Michel Gelobter. "Every time we drive, we create economic and environmental costs for which we are not responsible. This must change. It is time for drivers to pay their own way."

The congestion costs outlined by the 2002 Urban Mobility Study (http://mobility.tamu.edu/ums/) are an example an "external cost," or those costs not borne directly by the people causing them. There are other external costs in driving, including air pollution, greenhouse gas emissions, noise pollution, and the sheer infrastructure devoted to vehicles.

Prices should convey information to consumers about the scarcity of the resources used in providing or making a product or service. If prices fail to reflect that scarcity, people will overconsume those products or services.

Redefining Progress believes that there are a variety of ways to reduce the implicit subsidy drivers receive from society. Congestion pricing would charge drivers more for using roads and bridges when they are crowded. Pay-at-the-pump or pay-as-you-drive automobile insurance would better assign insurance costs to drivers according to their accident risk. Higher gasoline taxes could account for driving's other environmental and social costs.

For additional information, please see the following reports available at www.RedefiningProgress.org:

Redefining Progress is a nonpartisan organization that creates policies and tools to encourage accurate market prices, protect our common assets, and foster social and economic sustainability.

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