Walls, Nelson, Safirova
Telecommuting and Environmental Policy
allowances have ranged between $0.50 and $2.50 per ton, and comparable prices have been seen in
Canada’s trading programs, GERT and PERT (Zaborowski and Reamer 2004). To give some
perspective, a price of $25 per ton of carbon translates into about an additional 6 cents per gallon of
gasoline.
The strongest argument for promoting telework may be the benefits for traffic congestion. In a
recent review of studies on the social costs of driving, a Federal Highway Administration (2000b) report
presents a figure of 7.7 cents per mile (2000 dollars) in external congestion costs from auto travel in
urban areas. The same report places external air pollution costs in urban areas at 1.33 cents. In other
words, a 10-mile automobile trip in an average urban area will generate 77 cents in external congestion
costs and only 13 cents in external pollution costs. Along specific corridors, external congestion costs
can be much higher. A recent study estimates that marginal congestion costs on the most crowded roads
in the Washington, D.C., area are well over $1 a mile (Safirova and Gillingham 2004).
Looking ahead, while cars are projected to get cleaner, all estimates show traffic congestion
worsening. Vehicle miles traveled will continue to rise thanks to demographic factors, such as
population growth, rising incomes, and a larger share of licensed drivers in the population. Many
metropolitan areas are dealing with tight budgets and an inability to fund new road and transit
infrastructure to keep pace with travel demand. Recent construction cost data suggest that average costs
for providing additional peak-period capacity on urban freeways can run as much as $10 million per
lane mile (Federal Highway Administration 2000b). State transportation agencies have a strong interest
in delaying or averting costly road construction, and strategies like telecommuting may lessen the
pressure for the investments by reducing vehicle trips. Therefore, transportation agencies and
metropolitan planning agencies are likely to continue to pursue telecommuting, as one strategy among
many, to reduce both traffic congestion and air pollution.
References
National Environmental Policy Institute (NEPI). 2000. The National Air Quality and Telecommuting Act (as Part
of HR 2084): Final Report. NEPI: Washington, DC (July 31).
Available at http://www.nepi.org/pubs/summary.pdf.
NuStats, Inc. 2003. 2002 Telework Study, Draft Final Report. Austin, TX: NuStats (May 14).
U.S. Bureau of Labor Statistics. 2004. http ://www.bls.gov/sae/home.htm.
U.S. Federal Highway Administration. 2003. Our Nation’s Highways 2000: Selected Facts and Figures. U.S.
FHWA Office of Highway Policy Information, Report No. FHWA-PL-01-1012.
Available at http ://www.fhwa.dot.gov/ohim/onh00/onh2p3 .htm (Feb. 14).
Air Daily. 2003. “Burbank Uses NOx Credits to Settle Clean Air Act Lawsuit.” Vol. 10, No. 064. April 4.
Australian Bureau of Transport and Communications Economics. 1998. “Tradable Permits in Transport?”
Working Paper 37.
Burtraw, D., and K. Palmer. 2003. “The Paparazzi Take a Look at a Living Legend: The SO2 Cap-and-Trade
Program for Power Plants in the United States.” RFF Discussion Paper 03-15. Washington, DC: Resources
for the Future.
Choo, Sangho, Patricia Mokhtarian, and Ilan Salomon. 2003. “Does Telecommuting Reduce Vehicle-Miles-
Traveled? An Aggregate Time Series Analysis for the U.S.,” Paper presented at Transportation Research
Board annual meeting, January.
Clean Air Action Corporation. 2002. “US Experience with Emissions Trading. Prepared for the Domestic
Emissions Trading Working Group”, Natural Resources Canada.
Coase, R. 1960.”The Problem of Social Cost”. The Journal ofLaw and Economics, 3:1-44
Collantes Gustavo O. and Patricia Mokhtarian. 2003. “Telecommuting and Residential Location: Relationships
with Commute Distance Traveled for State of California Workers,” Institute of Transportation Studies
Working Paper UCD-ITS-RR-03-16 (Davis, CA: University of California-Davis).
Crocker, T.D. 1966.” The Structuring of Atmospheric Pollution Control Systems.” The Economics of Air
Pollution. New York, W.W.Norton & Co.: 61-86
Dales. 1968, J.H. 1968. Pollution, Property and Prices. Toronto, University of Toronto Press.
26