Tuesday, December 9, 2008

Infrastructure: Roads and The Smart Grid

From Marginal Revolution:

The first thing people think about when someone says "infrastructure" is roads and bridges. That's unfortunate because we already spend over $100 billion a year on transportation infrastructure and the truth is we don't need that much more. Peter Orzag, President-Elect Obama's choice for OMB estimated - when Director of the CBO - that an additional $20 billion in spending, mostly to maintain current transportation infrastructure, would achieve 83% of the net benefits to he had from more transportation infrastructure spending. Moreover, in many cases, congestion pricing would be both greener and more efficient than greater spending. A better program would be to follow Germany and several innovative state programs to get congestion pricing using GPS technology up and running, especially for trucks.

Even more valuable than transportation infrastructure would be grater investment in electricity infrastructure, a smart grid. Consider that in 2003 a massive, widespread, power outage threw 50 million people in the Northeastern states and Ontario, Canada out of power - disrupting lives and the economy. Why did this happen? Because of a failure to "trim trees" in Eastlake, Ohio - now that's a dumb grid. And remember that only a few years earlier, the most innovative, high-tech industries in the world were shut down by blackouts caused by our primitive electricity grid. Overall, blackouts cost the U.S. on the order of $100 billion a year....MORE