Archive | January 2017

“Prediction is very difficult, especially if it’s about the future”

In this second post about the work of the Commission on Travel Demand I will explore the challenges posed by the quote from the scientist Nils Bohr that headlines this article.

Lets start by looking at the state of practice in the UK. All major infrastructure schemes are subject to an economic appraisal with an appraisal period of 60 years (which is 30 years longer than it used to be a decade ago). We produce long term estimates of demand using the National Trip End Model and a suite of other tools such as the National Transport Model and the Passenger Demand Forecasting Handbook. However, the demand futures upon which decisions are based are largely determined by what are deemed to be ‘reasonable assumptions’. The case for HS2 for example includes the following acknowledgment: “Despite the economic downturn there is little evidence to suggest the recent strong growth in long distance rail travel is about to stop. We therefore assume further growth in long distance rail travel but on a conservative basis that growth will stop in 2043” (HS2 Ltd 2011)

It’s a truism that the only thing we will know about any forecast is that will be wrong but that is not particularly helpful. So what is our history on forecasting? Phil Goodwin has long established the tendency of forecasts from the days of Roads for Prosperity to tend to overestimate road traffic with, at best, demand following the low growth ‘option’ as shown in Figure 1.

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Figure 1: A history of forecasting difficulties for car traffic (Image courtesy of Phil Goodwin)

It is not that transport forecasters are bad at forecasting, it is just difficult to anticipate how the various variables in the models might move and which important variables that are not in the current approach will start to matter more. As an example, the National Infrastructure Commission is currently consulting on what the most likely population estimates will be. They review forecasting accuracy as shown in Figure 2. Look familiar? Clearly if the population forecasts are wrong then so will the travel forecasts be given the importance of population growth to total demand growth in our current approaches.

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Figure 2: Previous ONS projections versus actual population 1955-2014 (Source: National Infrastructure Commission, 2016)

So, how do we deal with uncertainty about the factors that have underpinned our approaches to demand forecasting such as oil prices, population, income changes. The Department for Transport has been developing the National Transport Model to try and consider those trends which might be important. It led in 2015 to the production of five ‘scenarios’ of travel demand futures. They are not scenarios in the true sense of the term, more sensitivity tests on oil price, economic growth and the extent to which declining trips rates might persist. These are shown in Figure 3.

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Figure 3: Range of potential demand futures from National Road Traffic Forecasts (DfT, 2015)

This shows us that there is a range in 2040 traffic levels between the highest and lowest projection of 100 billion vehicle miles. Yes, 100 billion vehicle miles. That is 40% of the miles on our roads today. How do we deal with this kind of range of uncertainty? Currently we don’t, we adopt a preferred ‘scenario’ and continue with our demand analysis on the basis that this is the future under which all projects should be assessed.

None of the above allows for the changes to mobility that will come from social change such as the radical reshaping of the retail sector or changing travel expectations for the over 65s. Nor does it consider the transport system changes such as the introduction of TNCs such as Uber and Lyft, vehicle automation or electrification of the fleet which are being aggressively promoted.

An alternative to simply adding more and more sensitivity lines that incorporate these factors is to try and develop scenarios which capture a plausible set of alternative futures under which decisions can be evaluated. Glenn Lyons and the New Zealand Department for Transportation underwent such an exercise producing a set of four scenarios (see Future Demand where Figure 4 is drawn from – well worth a read). The scenarios were then quantified and the headlines shown below.

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Figure 4: Different demand scenarios for New Zealand: Source Lyons et al, 2014

Here again however the range of possible futures goes from a growth in traffic of +10% to –62%.

So, one of the questions we need to ask is whether the relatively near future of 2040 is so uncertain that we have to present decision makers with a range of outcomes which are this wide? Are there not some aspects of everyday life which root some parts of travel demand and are harder or slower to change? Which aspects, which areas, which communities are most and less open to change? Buchanan was surely faced with uncertainty on a level that parallels that which we face today as Traffic in Towns was assembled  in the early 1960s. Many of the key insights were right or close approximations as to how demand might play out.

So, we must find a way forward which accepts that there are some demand uncertainties but which provides insight as to what and how much and equally importantly why? Some of these uncertainties are not somehow ‘out there’ waiting to happen but will be created by policy pathways we choose. Which aspects of future demand are most amenable to influence by transport policy and which will happen anyway? I hope the Commission will make progress through the call for evidence and our first three sessions on these questions so that we can move forward the debate on what this really means for decision-making.

Why we should worry about travel demand

Today marks the launch of a new Commission on Travel Demand which I am chairing. This is the first in a series of blog posts where I will explore the thinking behind the Commission and share insights from events, evidence and public meetings the Commission hosts during 2017.

I start by looking at why we should be interested in travel demand. There are certainly greater short run policy priorities out there such as job creation and promoting productivity and competitiveness in a post-Brexit world. In fact, talking about demand can be politically quite challenging as the idea of limiting growth in demand or managing demand in particular places or times of day can be contentious.

However, I would argue that we are in a period of significant change and uncertainty where there are numerous opportunities to shape the course of the future growth in travel demand. Many of these influences will also come from outside the transport sector. Some pathways will be more mobility intensive than others and that matters to the amount we will need to spend on infrastructure expansion and the extent to which we can meet our future environmental obligations.

Starting with environmental obligations reminds us that we may need to pick less mobility intensive pathways in order to meet our carbon obligations. The UK Committee on Climate Change in its 2016 annual report to Parliament noted that whilst the UK as a whole has achieved CO2 emissions reductions of 38% on 1990 levels this has almost entirely been achieved through the power sector. If it is to remain on track for the fourth and fifth carbon budget periods to 2032 it requires major action in other sectors.

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As the figures show, transport has shown comparatively little overall reduction and there is a very significant gap between what the Committee on Climate Change believes is a cost-effective reduction pathway and the set of transport policies we have in place today.

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Whilst new technologies such as electrification of vehicles and increased biofuels offer reductions in emissions, the scale and pace of the transition from where we are today to an entirely technology-led solution seems unrealistic. In transport terms therefore this could mean travelling less far or less often, more by non-motorised transport and by more shared forms of mobility. To do this though, whilst maintaining social and economic progress, requires thinking well beyond just the transport system but to how participation in society is changing. This will help to understand where transport interventions could shape those futures in less rather than more carbon intensive ways.

In the next article in this blog series I will be reporting on insights from the US Transportation Research Board Annual Meeting in Washington which begins on Sunday 8th January. I’ll be talking at TRB on what different demand futures mean for infrastructure planning and maintenance and on what the changing employment market might mean for youth mobility. There will also be lots of debate about shared mobility and increasingly autonomous futures.

If you are interested in what you have read here and would like to contribute to the work of the Commission then please submit to the call for evidence which is open until mid February.

Professor Greg Marsden