This weekend was the Engineering Exposition at the University and was the first event in 3 years. This was also the first time the Wisconsin High Speed Transportation Group participated (we were supposed to be part of the 2020 Expo, but we all know how that ended).

On Friday, several hundred grade school and middle children toured the Expo, and we figured that 7th grade was the average age of those school kids. So let's talk about what we learned from a 7th grader about the SC Maglev:

Floating Train, not super conducting train - 7th graders were more fascinate about the train floating than the speed.
Maglev's can be scary - When asked if they would like to travel 300 mph in a train, many students said they would get sick.

Fall in love with the nose - 7th graders were fascinated with the nose of the maglev, even more than magnets.
Fast Trains are bumpy (uncomfortable) - Believe the train would bounce you around and they need seatbelts. They had a hard time believing it was as smooth as a fast elevator ride.
Is this technology real? - Yes it is and in 2028 you will be able to buy a ticket on it to get from Tokyo to Nagoya
7th graders love magnetism (and a few college engineers too). - More importantly they understood how electromagnets worked (and 1 student got into a deep discussion how how fast magnets can switch polarization based upon the speed of an electron).
Coast to Coast in Maglev - Many times were asked if we could build a train from New York to Los Angeles, and how long would that take? (sorry, its still faster to fly)
Hyperloop is dead - Most 7th graders had no idea what a Hyperloop is, which is bad news for those Hyperloop companies.

The funny thing is that the adults were more skeptical about the maglev technology and it being built. Even then, with adults there were those that have ridden high speed rail around the world an absolutely loved it. But then there are other adults who don't believe the people will ever vote to build high speed rail in the US, but those adults admitted that they had not ridden a high speed train in Asia or Europe. So it really is the case of needing to experience the technology to believe it!

Looking back, we were one of the more popular tables. The challenge is to make Amercan's aware of the technology they are missing out on. Of course, we also learned that get a 7th graders really interested, we can just bribe them with candy. But that might be the reason they are worried about being sick at 300 mph.

ETS, Carbon Tax, and What it all means for High Speed Rail

By Isaac Eskind

Before I get into detail, I want to share something. Carbon taxes are the Republican solution to climate change. Since the early 2000s, Republican economists and think tanks have supported this solution. Why? Because it is a market solution. This could be important in the future.

The best argument I’ve heard to persuade conservatives to support climate action goes like this: Republicans believe in free and competitive markets and keeping governments out of businesses and people’s lives, right? And we can agree that free and competitive markets are efficient only when the price of any good is reasonable and fair… Ok. So, do you believe that we are pricing goods fairly? Of course not! There is a huge negative externality in every good on the market right now. If the negative externality was priced into a commodity like coal, there would be no coal plants right now, and the phase-out of coal would have happened years and years ago.

Here is some classic negative externality environmental economics: Can you get the answer?

Alright, we are on our way to discussing carbon taxes and cap and trade. But first here is a note from the World Bank’s Carbon Pricing Dashboard about putting a price on carbon dioxide. “Carbon pricing is an instrument that captures the external costs of greenhouse gas (GHG) emissions—the costs of emissions that the public pays for, such as damage to crops, health care costs from heatwaves and droughts, and loss of property from flooding and sea-level rise—and ties them to their sources through a price, usually in the form of a price on the carbon dioxide (CO2) emitted. A price on carbon helps shift the burden for the damage from GHG emissions back to those who are responsible for it and who can avoid it. Instead of dictating who should reduce emissions where and how, a carbon price provides an economic signal to emitters and allows them to decide to either transform their activities and lower their emissions or continue emitting and paying for their emissions. In this way, the overall environmental goal is achieved in the most flexible and least-cost way for society."

OK, now on to the different ways to price carbon. First, we will discuss the carbon tax and then the emissions trading system (ETS), the same thing as cap and trade.

A carbon tax is exactly what it sounds like. You tax carbon dioxide emissions, forcing companies to pay based on the amount of CO2 they emit. (Think gas tax or tax on cigarettes - the government disincentivises harmful activities with a tax.) This forces companies to make a decision: is it better for their company to pay the tax or is it better for them to abate (to change their ways to no longer emit GHGs so they do not have to pay any tax.) However, when you think about it, a firm’s emissions aren’t all the same cost to abate. In other words, some emissions are really hard/costly, and some are easy/cheap. Q+A… For an airline company what do you think?

The graph below is how a tax looks in theory: t* is the tax price, MAC means marginal abatement curve, box A is Smith’s abatement, and box B is Jones’ abatement.

Again, from the Carbon Pricing Dashboard, here are all of the nations that have a carbon tax as of April 2021:

Ok, now onto ETS (cap and trade). On a basic level, an ETS sets a cap on environmental damages and has a flexible price that responds to the market. They can be implemented in a variety of ways, most commonly, ETS uses an auction or an allocation with tradable permits. If we are using an auction, each emitter must either buy the legal ability to emit GHGs at the auction or abate their emissions. Therefore, it is reasonable for any company to only buy the permit at a price that is less than what it costs for them to abate.

Jones		Smith
Pollution Unit	MAC ($)	Pollution Unit	MAC ($)
10	100	10	75
9	200	9	125
8	300	8	175
7	400	7	225
6	500	6	275
5	600	5	325
4	700	4	375
3	800	3	425
2	900	2	475
1	1000	1	525

Here is a map of nations that have implemented an ETS as of April 2021.

Ok. So what does this mean for High Speed Rail (HSR)? Well, if you look at the picture below, you can tell pricing carbon will be good for HSR.

But… we don’t yet know how good pricing carbon will be for high speed rail.

Effect on transportation companies:
1. With any type of carbon price, transportation companies will have incentives to make their modes emit less CO2. With electricity grids becoming cleaner and cleaner, electrical transportation becomes more valuable.
2. Right now, many airlines are talking about sustainable aviation fuel (SAF), which is definitely better than regular jet fuel but still not great. If you are interested in learning more about SAF, LanzaTech, a Chicago-based company, and their subsidiary LanzaJet will provide you with more info. (https://www.lanzajet.com) LanzaJet is on the forefront of SAF.
3. One of the most important things about carbon pricing is the way it is implemented. For example, you can have a transportation-specific carbon price, which has been effective in Sweden. It is conceivable that this specific sector tax would benefit high speed rail because, as the graph above shows, it is comparatively less emitting and would incur less of the tax.
Prices of tickets.
1. A carbon pricing measure would presumably increase the price tag of highly emitting modes of transportation, such as flying. When the price of a plane ticket includes the cost of a carbon tax, more people may be interested in rail. This could increase demand for train travel in the US. Interestingly, studies have shown that carbon tax elasticity is around 3-4x larger than the corresponding price elasticity! If consumers see a carbon tax added to the price of their ticket, they are likely to be bothered by it - even more so than a simple price increase - and seek other modes of transportation. Taxes are extremely effective as a disincentive.
Allocating government revenue from carbon taxes.
1. Prices on carbon create substantial new government revenue. How that new pool of money is allocated is highly variable and a topic of local political debate. Climate activists suggest the revenue fund solar, wind, or other greener practices. In this case, I can see governments funding HSR.

The Faster Badger is produced by students at the University of Wiscosin-Madison to help break through the misconceptions of high speed rail and high speed transportation. This blog is for educational purposes only and all opinions presented are of the students.

Catching a train (or Maglev)

Meeting Details:

Next meeting: April 25th: 8:00pm, Zoom:

Agenda:

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What we learned from a 7 grader

ETS, Carbon Tax, and What it all means for High Speed Rail

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