[Noah Smith] High-speed rail is going nowhere fast in US

Some leaders in the US are intent on reviving the old dream of high-speed rail. Sen. Bernie Sanders is proposing $607 billion for a new high-speed train network as part of his Green New Deal. Representative Alexandria Ocasio-Cortez included it in her own plan earlier this year. On Twitter, Sanders’s political allies sing the praises of high-speed rail systems such as China’s.

High-speed rail puts an optimistic, futuristic face on an economic agenda that might otherwise seem mainly about sacrifice and belt-tightening. It’s high-tech, beautiful and iconic. It would be a substitute for regional air travel and road trips, and reduce carbon emissions. And it’s an area where the US genuinely lags other countries. Anyone who has experienced the speed and convenience of traveling from city to city by bullet train in Japan or France will understand the appeal.

But although this is a good long-term goal, any actual plan for building bullet trains must reckon with why high-speed rail has consistently failed in the US. The Barack Obama administration also was a fan of the idea, and requested more than $50 billion for high-speed rail projects. Much less ended up being approved, and even less was spent, thanks to state-level and congressional opposition; most of it went to upgrading existing commuter rail lines.

The one major high-speed rail project was in California, with plans for a train between Los Angeles and San Francisco. But costs ballooned; originally, the project was slated to cost about $40 billion, but the estimate has now at least doubled. The date for the end of the first phase of construction has been delayed from 2029 to 2033. Governor Gavin Newsom has indicated that the project will be scaled back.

California’s bullet train has thus fallen victim to the same problem that plagues most US transit and infrastructure projects -- inflated costs. Unless the source of those costs can be identified and dealt with, states are likely to balk at the prospect of committing to big-ticket projects that they know will likely go way over budget.

Reducing those costs is even more crucial because even under the best of conditions high-speed rail typically struggles to support itself. Japan’s famous Shinkansen system lost so much money in the 1970s and 1980s that it was broken up, privatized and subjected to ruthless cost-cutting measures. Most of China’s high-speed rail lines also operate in the red, as do many in Europe.

Now, that doesn’t mean high-speed rail isn’t worth it. Transit systems don’t have to fully pay for themselves in order to benefit society because they have spillover effects that power regional economic growth. Highways, trains and buses facilitate networks of economic interactions whose value can’t be captured by tolls and user fees.

But the spillovers from high-speed rail are likely to be smaller than for other infrastructure projects. Unlike roads, bullet trains don’t carry freight, only people (the US already has an excellent freight rail network). They could generate some increased tourism, but not much, because most people can already take road trips for a similar price.

Research from China suggests that one important kind of economic activity bullet trains will stimulate is interaction among high-skilled workers, such as business executives, researchers and so on. That’s more than nothing, but it isn’t the kind of boost that highways and freight trains deliver. It also means that the biggest beneficiaries of high-speed rail would be corporations and high earners. And in the US, which already has well-established regional air travel and freeways, the increased benefit from more business trips will likely be smaller than in a developing country such as China.

Other factors specific to the US make high-speed rail less attractive than in Europe or Asia. Sprawling US cities tend to be built around cars and roads, meaning that many high-speed rail passengers who arrive at their destination would have to either rent a car or use expensive ride-hailing services. That increases the incentive to just drive all the way. It also means that trains linking city centers would generate less economic activity in the US than in more densely populated countries. In addition, the US is likely to be more concerned about terrorism than other countries, because bullet trains are an obvious high-profile target. Security would add to the cost of rail systems.

So although high-speed rail is a good long-term project for carbon-emissions reduction, the US would probably get more bang for the buck by focusing on local trains -- fast commuter rail linking suburbs to city centers, subways and light rail to let people get around cities without cars and buses that utilize the existing road systems. These projects aren’t as grand and beautiful as bullet trains, but they would do more for economic activity and livability -- and they would be a lot more cost-effective.


Noah Smith
Noah Smith is a Bloomberg Opinion columnist. -- Ed.

(Bloomberg)