Strategic Issues Facing Transportation, Volume 6: The Effects of Socio-Demographics on Future Travel Demand (2014)

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30 5.1 Scenario Development and Assumption Testing Good scenarios are built on good data and contain alternative visions of how the data move forward. The process for developing and refining the research team’s scenarios and the assumptions underly- ing them began by organizing the key trends outlined in Chapter 3, as well as other factors, into a broad set of key drivers: (1) population size and growth, (2) geo-demographics of population size and growth, (3) population structure and composition, (4) household-based eco- nomic activity, (5) cultural and social diversity, (6) and external factors intertwined with socio-demographics—i.e., urban form, technology, and infrastructure investment. In each of the categories, the team iden- tified elements or factors that were predetermined and those that were uncertain. • Predetermined elements are outcomes that are considered to be highly likely over the time frame of the scenarios and will lead to outcomes that can be relied upon (i.e., percentage of people over age 65 at some future point in time). These elements describe the known future implications of something that has already happened. • Uncertainties are the potential changes that we are unsure about—the direction of change, the resulting outcome, or the pace of evolution. Uncertainties are outcomes that could resolve in any number of ways (i.e., direction of immigration policy reform). In scenarios, these were to be explored as various alternatives. The research team then used a specialized technique—Strategic Assumptions Surfacing and Testing (SAST)—to identify (surface) and extend (test) the assumptions underlying the key factors on which the broad scenarios were built. 5.1.1 SAST Methodology Introduced by Mason and Mitroff in 1981, SAST is a process for surfacing the underlying assumptions of a policy or plan and creating a map for exploring them and better understanding their effect. SAST incorporates the following principles: • Adversarial—Based on the premise that the best way to test the validity of an assumption is to fully understand the arguments that both support and oppose it. C H A P T E R 5 Future Scenarios: Process and Narratives Chapter 5 Takeaways Four scenarios were developed through a SAST methodology: • Momentum: gradual changes without radical shifts. • Technology Triumphs: technology solves problems. • Global Chaos: collapse in globalism and sustainability. • Gentle Footprint: widespread shift to low-impact living. “The best way to predict the future is to create it.” Peter Drucker, writer, management consultant

Future Scenarios: Process and Narratives 31 • Participative—Based on the premise that the knowledge and resources necessary to solve and implement the solution to a complex problem are distributed among a group of individuals that has been formed to represent alternative points of view. • Integrative—Based on the premise that a unified set of assumptions and action plans is needed to guide decision making, and that what comes out of the adversarial and participative ele- ments can, at some point, be unified. • Managerial Mind Supporting—Based on the premise that exposure to assumptions deepens the insight into a critical planning issue, either public or private. SAST was applied in a 1.5-day workshop that included members of the NCHRP oversight panel, members of the research team, and outside experts. Altogether, the 26 workshop par- ticipants represented the fields of socio-demographics, transportation policy and planning, and travel demand modeling (we acknowledge these individuals in the acknowledgments section). Vince Barabba, a member of the research team, who had previous experience with this meth- odology while at the U.S. Bureau of the Census and at General Motors Corporation, served as the facilitator for the planning and workshop process. The specific purpose of the workshop was to test whether the factors that had been identified as “significant driving forces” were in fact significant, and whether the assumptions linking these drivers to travel demand impacts were valid. In addition, to the degree possible in the short 1.5 days of the workshop, the importance and degree of certainty associated with each assumption were evaluated. Prior to the workshop, the research team had outlined four scenarios based on research in prior study tasks: • Momentum—Gradual changes without radical shifts. • Technology Triumphs—Technology solves all problems. • Global Chaos—Collapse in globalism and sustainability. • Gentle Footprint—Widespread shift to low-impact living. The framework is structured around the significant driving forces and the basic factors that were expected to be inputs to the SD model. These factors constitute the rows in Table 5-1, while the columns in Table 5-1 contain the scenarios. The Momentum scenario may be seen as the most linear, or “business-as-usual” case. The other three scenarios are distinct changes from that case. All scenarios were created to maximize the differences between them and to ensure that as many possibilities as possible were considered. Prior to the workshop, each participant was presented with the four scenarios, and was asked to select the scenario that he or she felt most capable of defending. At the workshop, participants were split into four small (4–6 people) working groups consisting of individuals who agreed, in principle, to support the scenario to which they had been assigned. In the workshop, the dif- ferences among scenarios (and concomitantly among groups) were reinforced by asking the members of each group to role play their particular scenario position—even when it sometimes required stating and supporting an underlying assumption with which a member of the group did not personally agree. To enhance each participant’s sense of involvement in the scenario, each group was asked to give itself a label that best expressed the spirit of its position: Momentum → Groundhog Day (Extreme Gradualism) Scenario of minimal change; continuing path we’re on; continuing service economy; less dis- posable income; very little happens to change debt; strong international competition; many ways of coping when things get bad, so change is not necessary; permanent cycles with “blips,” ebbs, and flows; adopting a history-repeats-itself theme.

Factor Momentum Technology Triumphs Global Chaos Gentle Footprint Economic Growth Personal income, employment rates. Generally modest economic growth. No growth in overall employment or average income. Technology economy fuels economic growth, employment is high, incomes rise for a few "elites." Frequent storms, floods, droughts, tsunamis, etc., lead to widespread casualty, famine, war, and general economic chaos. There is negative economic growth and high unemployment. Growing environmental ethos among each generation leads to drastic policies and investments to curb fuel use and emissions; new industries; new occupation mix with a diverse set of economic and employment effects. Immigration Policy Immigration rates, population growth, fertility trends. Number of legal and illegal immigrants continues to grow at recent rates, leading to 100 million+ total population growth. Increased legal immigration as new tech workers are needed to fill jobs. With high unemployment, scarcity, fear, there is a strict lockdown on borders. Cutbacks in energy use and economic activity initially lead to decreased immigration. Basic Demographic Trends Age distribution, gender roles, life expectancy, mortality rates, household size and structure. The aging of the population increases somewhat, although average life expectancy peaks due to complications from obesity. Average retirement age goes up somewhat. Gender gaps in employment and roles continue to disappear. Mortality rates decrease substantially. Life expectancy declines, starts to work against aging of the population. Unemployment is highest among males, uneducated. Reaction against working mothers—toward traditional roles. Environmental ethic to have fewer children per household. Shift to healthier lifestyles (more exercise and local foods) leads to higher life expectancy. Energy Supply and Demand Prices, fuel types, environmental attitudes. Energy prices continue to increase slowly overall, with periodic spikes followed by decreases. With new energy technologies, the price of energy eventually levels off and becomes stable or even declines. Energy demand and supply are both disrupted. Prices are unstable and generally rising. High carbon taxes and other market policies make energy more expensive. The shift to noncarbon fuels makes energy security less important. Technology Advances Information and communication technologies (ICTs), vehicle technologies. ICTs modify how and where people work and play. Slow shift toward hybrid and plug- in electric vehicles. Use of SUVs and pickup trucks remains strong. Intelligent vehicles make driving safer, but not automatic. Virtual living is a reality. Many high- level tasks in business and government are run by artificial intelligence systems. Robotic systems handle all transportation needs. Technology advances slowly or nearly halts. The shift toward smaller, more efficient vehicles and alternative fuels accelerates, as does investment in rail and other forms of transit. High-speed rail replaces a large fraction of the air market. Role of Government in Transportation Infrastructure Pricing, supply. Federal role decreases, with more power to the states. Very few new highway miles are added, and maintenance of existing miles remains a challenge. Fuel taxes and other pricing remain low compared with other nations, but much road infrastructure is tolled. Private (technology) sector directs transportation infrastructure investments. Very little investment in new capacity or maintenance, but slow economy leads to slowdown in demand, less congestion. Very little investment in public transportation or air network. Federal government role is strong. There is little investment in new road capacity, as priorities are toward transit, rail, and more efficient vehicles. Urbanization Land-use policies, open- space protection, regional shifts. Population continues to shift toward urban areas. Infill and transit-oriented development grow due to high demand. The entire country is wired. Economic activity diffuses from population centers. Technology enables people to locate where they wish to work and to recreate virtually. High food prices, disrupted agriculture sector, and high unemployment lead to more self-production of foods. Cheap land helps enable "back to the land," small farms, co-ops—low technology. Urban centers and inner suburbs revert to slums. Land-use policies strongly promote efficient infill development, with an emphasis on meeting most needs within walking distance. Even suburbs become denser. Table 5-1. Scenario framework: Key factors and indicators used in scenario development.

Future Scenarios: Process and Narratives 33 Technology Triumphs → Tech Nirvana Technology deals with goals and ramification of goals, ever-evolving, and solutions come quickly; if there is a problem, technology solves it; global tech race is healthy and competi- tive; role of government is to respond to technological issues; people will travel less and faster because of technology; do people want to be “there” in person or travel electronically? Global Chaos → Neo-Isolationism Largely negative scenario: economic–political breakdowns, borders tighten up, supply chain and international travel (flows into United States) break down, shrinking trade and travel patterns, United States takes care of its own first, state or regional divides could emerge, local- ism dominates. Root causes of collapse: climate change, collapse of energy systems, interrup- tion of world food systems, terrorism, disease, unstable financial growth. Gentle Footprint → Clean and Green Strong state government role; focus on urban design, walkable neighborhoods, move from big houses to small apartments; growth in energy sector, clean businesses, young entrepreneurs; consumerism decreases, simpler and healthier lifestyles; expect an increase in economic activ- ity; every house will have fuel cells, solar cells; more charging stations for cars, trend toward rechargeable hybrids, use less or no car. The basic purpose of the workshop at this time was not to decide which scenario was most likely, but rather to surface as much as possible the assumptions underlying each scenario. Assumption surfacing began with each group working independently to develop a list of stake- holders (people, organizations, and institutions) for decisions related to the position of the group’s scenario—that is, the stakeholder who would be affected by or could affect a final deci- sion. Next, assumptions were identified that had to be posited for a given scenario to result. The stakeholders and assumptions identified for each scenario are presented in Table 5-2. With a deeper understanding of the critical assumptions that would have to be true for one scenario to prevail, each group was ready to defend its position against those of the other groups. After the presentation of the assumptions, the groups met individually to determine which of the many assumptions presented, if true, would be most damaging to their own position: “If that were true, could we pull off this scenario?” A debate was conducted, with each group chal- lenging the most damaging assumptions to its own point of view, and the group for whom the assumption was critical defending the assumption. The content of this debate is presented in Table 5-3. For example, the damaging assumptions to the Momentum assumptions appear in the Momentum row under Technology Triumphs, Global Chaos, and Gentle Footprint. The significance of the “damaging assumptions” is that they indicate those assumptions in the scenario that most differentiate it from the other scenarios. Therefore, these assumptions are, in fact, the most important ones for that scenario. As a result of the discussion on damag- ing scenarios, four issues that continually surfaced during the debate were determined to be the most crucial to scenarios pertaining to the impact of socio-demographics on future travel demand: • Immigration • Labor force/jobs mix • Household composition • Household movement The SAST workshop was not intended to select or choose the “right” scenario, but was intended to formatively evaluate the utility of the scenarios in illustrating alternative futures.

34 The Effects of Socio-Demographics on Future Travel Demand Scenario Stakeholders Assumptions Momentum Working People Shifts in type of job/training, job mobility; strong voting block; middle class lives comfortably, American dream alive; incomes to stay at reasonable level, personal mobility affordable; accept user fees for roads. Government (County) Allows things to continue as is; encourages local economic development; car- oriented, sovereignty over land use. Organized Labor Controls on imports, immigration controls, prospects for education and training. Land Development/Home Builders Favorable treatment needs to remain strong; home starts is a leading economic indicator; need for continued immigration, immigration oscillates with little regard to policy; economy is main driver; mortgage assistance. Technology Triumphs Government (National) Demand-driven world; global free market; invests in public goods; protects intellectual property rights. Consumers Everyone has adequate buying power, sufficient skills to be part of workforce. Private Sector Capital sufficient to monetize emerging technology; technology brings positive results or finds solution; labor force exists to continuously produce innovation. Educators Stay ahead of technology; people willing to learn. Privacy Advocates Advances make it possible to protect privacy; agree to technology solutions. Intellectual Property Creators Intellectual property can be protected; replace resources with technology. Global Chaos Government Fear dominates decision making; self-preservation triumphs over globalism; society unsuccessfully addresses carbon fuel limits; supply chains break down. Employers American economy can do without immigrants; self-preservation triumphs over globalism and sustainability; society unsuccessfully addresses carbon fuel limits. Energy Suppliers Society unsuccessfully addresses carbon fuel limits. Consumers (Middle Class, Affluent) Fear dominates decision making; self-preservation triumphs over globalism and sustainability; “less” is acceptable—“satisficing” becomes the norm. Foreign Governments Collapse in global cooperation; supply chains break down. Gentle Footprint Politicians Needs to be a legal foundation for energy choices, land-use policies, health care policies. Existing Landowners Want to protect their land, move to a green society, keep farming. Citizens Consumers are environmentally aware, main drivers underneath scenario, spreading and building awareness of a green future. Developers Rules to facilitate environmentally friendly, built environments; they can make money regardless of how land is zoned. Utilities Need to face pressure and control to go green. Industries, Business Groups Majority of people are environmentally aware or opportunists who will take advantage of market demand to move into greener businesses; going green does not affect the economy. Table 5-2. Stakeholders and stakeholder assumptions for each scenario. The workshop discussion indicated that the initial four broad scenarios—Momentum, Tech- nology Triumphs, Global Chaos, and Gentle Footprint—worked well to describe four unique future alternatives that illustrate some extreme future cases. Workshop participants did not have to stretch to defend them; in fact, they embraced their scenarios, indicating that each resides in a realm of plausibility. In addition, the set of factors and indicators as presented in Table 5-2 represented an early, yet robust and efficient, framework for describing each scenario.

Future Scenarios: Process and Narratives 35 Scenario Assumptions Challenged Momentum Momentum Technology Triumphs Global Chaos Gentle Footprint N/A Demand-driven world. Global free market. Technology ensures adequate resources. Self-preservation triumphs over globalism and sustainability. Government imposes land-use (go green) values because of citizen demand. Technology Triumphs Immigration thrives. Cost of global shipping increases. N/A Less or “satisficing” is acceptable. Fear dominates decision making. Self- preservation triumphs over globalism and sustainability. U.S. economy can make do without immigrants. Government imposes land-use (go green) values because of citizen demand. There are economic losers (like industry and utilities). Global Chaos Immigration thrives. Income is stable. Housing is affordable. Everyone has adequate buying power. Demand- driven world. Global free market. Technology ensures adequate resources. N/A Healthy sustainable economy. Stable and successful leadership. Gentle Footprint Living the American dream is good and brings income stability. Personal mobility is affordable. Government will invest in public goods, which is necessary in the absence of market. All technology has good outcomes. Everyone has adequate buying power. Society will not successfully address carbon fuel limits. Fear of others dominates decision making. Self- preservation triumphs over global sustainability. N/A Table 5-3. Most “damaging” assumptions by scenario. 5.2 Scenario Descriptions After the workshop, the scenario framework was refined (that is, the significant sectors and factors), based on research for the SD model development. But the basic assumptions underlying the scenarios and their names changed very little. Appendix A provides full narrative descriptions of these scenarios, keeping with common practice in this field of writing the content from the future vantage point of 2050. Each scenario prioritizes certain driving forces in the future to create different interpretations of how present-day uncertainties will move to resolution. The Momentum scenario has been developed to represent the business-as-usual case. It is the most linear scenario and is based on demographic transitions over time by age, race/ethnicity, acculturation (if immigrant), and household type (e.g., married, children). The transitions include births, deaths, marriages, divorces, higher and lower household incomes, and labor force participation. The other three scenarios are distinct changes from the Momentum scenario. All scenarios were created to maximize their differences, with each representing very distinct and differenti- ated possible futures: • Momentum—The current state of the country in 2050 would still be recognizable to any transportation planner who had worked in 2010. Change has been incremental, based pri- marily on population dynamics, and we have not experienced any major shifts from prevail- ing demographic, economic, or technology trends. Nor have there been major policy shifts.

36 The Effects of Socio-Demographics on Future Travel Demand America has become “grayer” as the Baby Boom generation has aged and “browner” as the white population has grown slower than every other racial group. Likewise, the U.S. labor force has grown older and more diverse. Overall VMT has increased, but per capita VMT has declined. Baby Boomers have continued their reliance on the auto as their primary travel mode, but young adults have declining driver’s licensing rates, auto ownership, and auto usage. Young adults also rely more on technology to substitute for travel when possible, but telework is not prevalent due to the fact that most of them access the Internet via mobile devices. Road congestion has decreased only somewhat. Federal gas taxes have risen a few times, but not enough to keep up with the increases in fuel economy. As a result, with less federal funding, many states have had to increase their own funding streams if they want to maintain their existing road network. • Technology Triumphs—Technology has saved us from ourselves. While the United States faced some difficult challenges in the 2010s, many of these have been mitigated by inno- vations through 2050 that helped us live longer, reduce our carbon footprint, connect our world, and travel more easily and safely. Autonomous vehicles have changed how people travel, and data-intensive communications technology has significantly affected how much people travel. Commute travel has declined, since a high proportion of office workers now work from home with new types of mobile devices, and most schooling and health care are conducted online. Fewer people live near their jobs, since their physical presence is seldom required. Much socializing also takes place virtually, and many weekly necessities are deliv- ered to people’s doors. The travel that does take place tends to be faster, cheaper, and more convenient than ever. • Global Chaos—The past few decades have challenged Americans’ general optimism, and the world has become a far different and more difficult place in 2050. Several trends intersected to bring about a distressing “new normal”: growing financial instability at a global scale, a continuing great U.S. recession, the increasing and visible impact of climate change, and a reac- tionary sense of new isolationism. The results, which affect most of the world, are heightened insecurity (over jobs, food, and oil) and chronic conflicts (over jobs, food, and oil). Widespread unemployment means that far fewer people are on the roads and transit systems. With state and local governments collecting relatively little revenue, they have a hard time maintaining the existing infrastructure or responding to crises like returning travel to normal after a major storm. Walking and cycling are far more popular now, but generally out of necessity rather than choice, and people with cars often make extra money on the side as gypsy cabs. • Gentle Footprint—After droughts and “super storms” began plaguing the United States in the 2010s, both public consciousness and political will in the 2020s began shifting toward taking more serious action to slow climate change. While it was too late to curb the rise in carbon concentration in the atmosphere, the United States has made surprisingly good progress in adopting a variety of means to reduce energy consumption. Many lifestyle changes that may once have been considered radical are now mainstream, particularly since the generational divide between Baby Boomers and younger generations on energy and environmental priorities has narrowed over time. Federal, state, and local governments have responded by shifting their focus to investments that support alternative travel modes, rather than cars. Most cities and suburbs have good networks of bicycle lanes, and transit systems have expanded, while the size of the road network has barely budged in 20 years. High-speed rail has been built in a half-dozen corridors, and it captures a healthy percent- age of travel among those cities. Each scenario has its own set of final structuring assumptions and/or underlying theories about the future. These final assumptions are displayed in Table 5-4 in the structure of the con- ceptual framework that has been designed for these scenarios. These assumptions are explicitly noted in the scenario analysis tool, Impacts 2050, which is described in the next chapter.

Sectors Momentum Technology Triumphs Global Chaos Gentle Footprint Demographic Slow population growth. Population aging. Life expectancy not increasing. Fewer children per household Immigration slowing. Hispanic population growth from U.S. born. High population growth. Longer life span and better general health; birth rate increases. Delaying marriage with “virtual living.” More flexibility in living arrangements. Adult children forming new households. Increasing tech worker demand. Increasing international migration to and from U.S. Population declines. Shorter life span due to negative effects on health and poor environment. Fewer children per household due to poor economy. Larger, multigenerational households. Declining household incomes. Decreasing immigration with border controls and deportations. Slow population growth. Fewer children. Longer life span. Healthier lifestyles and better environment. Increasing immigration. Environmental tech business requiring workers; back-to-basics farming requiring migrant labor. Employment Total labor force growing due to population growth. Labor force participation rate declining due to population structure. Male and female participation rates narrowing. Labor force participation increasing due to booming economy. Later retirement with people working from home through technology. Benefits of technology not equally shared. Economic growth favoring educated. Higher income inequality. Low economic growth, less employment. Fewer job opportunities. Higher unemployment among women and young adults. Higher income inequality. High earners continuing to prosper. Poor economy affecting low earners. People delaying retirement due to financial necessity. Employment sectors shifting to low- impact jobs—technology and farming increasing. Healthier people staying in workforce longer. Greater economic equality as benefits of tech more equally shared. Land Use Baby Boomers aging in place, mainly suburbs. Younger adults moving to urbanized areas. Tech bringing ability to work from anywhere. Economic activity diffusing from population centers, lower densities. Less relocation activities, opportunities dwindling regardless of geographic location. Less value on undeveloped land. Greater density. Greater value placed on undeveloped land. Transportation Supply Federal and state transportation revenues and funding declining. Growing cost burden on states without increasing fuel tax. Little private investment. Increasing reliance on tolling. Strong economy encouraging private- sector investments in infrastructure. Increasing federal and state transportation budgets. Greater private and public investment in roads and transit. Little investment of new capacity of any kind. Carbon tax surplus funding infrastructure. Little investment in new road capacity. More investment in public transit. Travel Behavior Young people delaying auto ownership. Work travel declining. More older people driving. Technology substituting for some travel Fuel prices rising, vehicle efficiency keeping pace. Higher incomes leading to less car- sharing. Moving to suburbs/rural areas leads to higher car ownership. Technology leading to greater public transport efficiency. Self-driving vehicles leading to more auto VMT. Fuel prices increasing due to global instability. More car-sharing. Less car ownership. More walking and biking. Fewer work trips. Less discretionary travel. Increasing fuel prices encouraging alternative energy sources. Travel more expensive, VMT declining. More car-sharing. Car ownership declining due to better public transit systems. Higher-density, improved bicycle lanes. Table 5-4. Key assumptions by sector by scenario.