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We have established so far—using AAA data—that each mile driven by a car costs the owner $2-$3. And the “outrageous” California gas tax everybody is constantly crying about is just $0.03 of that. Basically, it’s a rather laughable 1% of the overall cost. And it’s an equally laughable idea that this 1% is paying for all the car-centric infrastructure out there
“Gas taxes and other fees paid by drivers now cover less than half of road construction and maintenance costs nationally” [Todd Litman]
In addition to the indirect costs a single owner/driver pays, there are another $1-$2 per mile called Externalities—these are the different cost factors dumped onto society by each driver.
Make America use CBA again!
Before doing any kind of project, established companies will often do a cost-benefit analysis (CBA) based on their particular circumstances. There must be business plans, budget plans, and project plans before ever starting anything bigger than an office birthday party. Even Silicon Valley start-ups need to show potential financial success if they want access to Venture Capital. This is different from local governments, especially in terms of transportation. No Redwood City transportation director has ever done a CBA for their projects. That becomes pretty clear when you look at how city hall has addressed the big topics of Woodside Interchange, Grand Boulevard Initiative, Ferry Service, Grade Separation or even just the little things like Safe-Routes-To-School and Safe-Routes-To-Transit. Each and every one of those project plans would look different if it were run through a professional CBA framework.
The U.S. once led the research on cost-benefit analysis (CBA). The U.S.-based research is often used and cited by many handsomely paid third-party consultants. But if local agencies don’t base decisions on research, it’s all a wasted effort. “Local Control” in Silicon Valley is very car-centric and does not like public or active transportation. You can see that in almost every single project. And few ‘local controllers’ show that more than our leaders at SamTrans, the Board of SMCTA, and, of course, our RWC council. Every single CBA would force them to put more transportation money into public and active transportation. Still, these leaders funnel bicycle and ADA funding into car-centric projects like “Vera Bike Boulevard” or “Roosevelt Traffic Calming.”
Nowadays, if you really want to see solid research, you need to travel to strange and far-away places like Canada, Europe or Burkina Faso.
More Research, More Money
The currently existing CBA frameworks contain all kinds of inaccuracies, which is to be expected. First, the researchers need to decide which externalities should be included and second, what cost factor should be attached to these externalities. It is sometimes easy to overfocus on one cost segment that is easily available while neglecting or undervaluing others that are not.
Another problem with CBAs is that they might be highly localized. Driving costs can vary due to taxes, fees, insurance, and societal costs. Somebody paying bridge tools might pay more than their fair share, while most San Mateo residents do not. Public Transportation is even harder to compare as schedules and pricing are very local. Walking and cycling, on the other hand, are more universal and compare very well across cities, regions, and countries.
However, despite its limitations, CBA is a commonly employed and accepted economic tool for making transportation infrastructure decisions—anywhere but here, of course.
“Highway expansion projects rarely deliver the time-saving benefits that policymakers promise. Adding more lanes generally leads to increased demand, more congestion, and higher emissions.” [SSTI 2024]
Just a few of the many research projects that go deeper into this topic of internal costs, external costs, societal benefit and health savings:
- Various researchers, such as Nelson (1995), Buis (2000), Wittink (2001), and Saelensminde (2002) and in places like Bogota, Delhi, Morogoro, the Netherlands, and Norway, concluded that cycling makes positive contributions to the economy.
- Meschik (2012), Rabl and de Nazelle (2012) assessed the cost of mode switch from driving to cycling.
- Stephan Goessling (Copenhagen) and Todd Litman with the Victoria Transportation Policy Institute (VTPI, Canada) conducted several studies.
- 2003: The European Environment Agency estimated that 8% of the EU’s (plus Norway and Switzerland) GDP went to external cost of transportation, of which 58% is linked to cars.
- 2004: VTPI (Canada) concluded that walking improves urban livability, accessibility, transport cost, health, external costs, efficient land use, economic development and equity.
- 2008: CE Delft, Infras and Fraunhofer ISI that negative transportation externalities amounted to €500B in EU27 (plus Norway and Switzerland)
- 2015: WHO quantified the cost of traffic deaths and injuries to around 3% of global GDP
- 2017: The Lancet Commission calculated air pollution to be responsible for 16% of deaths worldwide, incurring welfare losses of US$4.6 trillion or 6% of GDP
Quotes from the deep beyond
I read many of these research papers, so you don’t have to. Depending on who published the research, who did the research, and most importantly, who paid for the research, results might be more or less car-biased. However, even the most car-biased papers could not find real net benefits for driving private cars. Basically, if your driven miles aren’t reimbursed by the IRS, these are worthless miles. And thanks to many corporate loopholes, even many of the reimbursed IRS miles aren’t net-positive miles. Sure, they have perceived personal value, but we are discussing societal costs here.
“The cost to keep each car on the road is 30 times the cost of each bicycle.” [Portland]
A few findings of various papers and articles are worth sharing:
- By 2040, investments in the range of $138 to $605 million will result in health care cost savings of $388 to $594 million, fuel savings of $143 to $218 million, and savings in value of statistical lives of $7 to $12 billion. The benefit-cost ratios for health care and fuel savings are between 3.8 and 1.2 to 1, and an order of magnitude larger when the ‘value of statistical lives’ is used. [ Portland 2011 ]
- In 2011, state and local governments spent $58.7 billion on mass transit, $22.7 billion on air transportation facilities, $1.6 billion on parking facilities, and $5.2 billion on ports and water transportation, in turn raising $13.2 billion in mass transit fares, $18.8 billion in air transportation fees, $2.2 billion in parking fees and fines, and $4.2 billion in water transportation taxes and fees. No transportation mode was free of subsidy. [Taxfoundation 2014]
- bicycle cultures will only evolve when the concerns and expectations of cyclists regarding safety, speed, and comfort are taken into consideration [Aldred 2013]
- ‘walkable’ environments are defined as traversable, compact, physically enticing, and safe [Forsyth 2015]
- Yearly Internal Cost VW Golf = €403,179; Mercedes GLC = €679,167 [Germany 2019]
- Yearly Societal Cost VW Golf = €4,755; Mercedes GLC = €5,273 [Germany 2019]
- Danish levels of cycling would increase the mobility of England’s poorest by 25% (UK 2014]
- Danish levels of cycling would save the UK NHS 17B within 20 years [UK 2014]
- Bike parking takes up 8 times less space than a car [UK 2014]
- shifting just 10% of journeys from car to bike would save 400 productive life years [UK 2014]
- 5km commute is costing society when driving=$2.78, bus=$0.38, walking=-$1.08, bike=-0.75. So while driving and public transportation are heavily subsidized, active transportation is a net benefit [Vancouver 2015]
- For $1 of direct cost, society pays for walking=$0.01, biking=$0.08, bus=$1.50, car=$9.20 [Vancouver 2015]
- Revenues from gas taxes and other user fees this year are expected to come up $16 billion short of the level needed to maintain current federal transportation spending [U.S. PIRG 2015]
- Gas taxes and other fees drivers pay now cover less than 50% of road construction and maintenance costs nationally. [U.S. PIRG 2015]
- That number was at 70% in the 1960s.
- External Cost of Automobility: -€500B per year, Societal Benefit of Cycling: +€24B per year, Societal Benefit of Walking: +€66B per year [ EU 2018 ]
- Each KM driven has external cost: -€0.11; each KM of cycling has societal benefits: +€0.18; each KM of walking has external benefits: +€0.37 [ EU 2018 ]
Making sense of all these different numbers of different locations is almost impossible. One of the best quotes to summarize all of them:
“Gasoline Taxes and User Fees Pay for Only Half of State & Local Road Spending” [Taxfoundation 2014]
And that is still just the damage to visible infrastructure. It does not include all the damage and cost to society. Why does any jurisdiction justify highway widening and new car infrastructure in this day and age? It is outrageously bad governance. It can only be explained by the fact that two of the most corrupt industry sectors in America are now Housing Development and Transportation. It seems that council members all over the Bay Area keep following the wrong money.
More Information
- The Social Cost of Automobility, Cycling and Walking
- Portland 2011: Costs and benefits of bicycling investments in Portland
- UK 2014: Benefits of Investing in Cycling
- Goessling, Litman: The lifetime cost of driving a car
- Miner, Smith: Car harm: A global review of automobility’s harm to people
- U.S. PIRG 2015: Who pays for Roads?
- Taxfoundation 2014: Gasoline Taxes and User Fees
- SSTI 2024: Highway Costs outweigh Benefits
Editor’s Note: The views and opinions expressed in all blog posts are those of the authors and do not necessarily reflect those of the Redwood City Pulse or its staff.
