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Old 02-13-10, 02:59 PM   #1
Ngchen
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Cost/benefit analysis of cycling infrastructure followup

Based on feedback from the old thread more than a year ago and some new information, I crunched the numbers again for the cost/benefit analysis of improved cycling infrastructure. The numbers are surprising.

First, the costs of the car. Taking the US as a whole, people drove around 2 trillion (2 x 10^12) mi a year. Assuming a modest average 25 mi/gal, that means 80 billion gallons of gas were burnt to power said cars, which generated 776 million tons of carbon dioxide. The carbon dioxide's cost to the environment, if we accept the European Climate Exchange's pricing ($17.50/ton), is a total of $13.58 billion. (I got that number from slate.com's reference about the cash-for-clunkers program.)

The gas itself cost a total of $160 billion dollars, assuming $2/gal (since we can't count the taxes that fund the government to some degree).

Now generously assuming that each car lasts 200,000 mi, so each year 10 million cars would be "spent." Let's assume that the cars cost, including insurance, an average of $20,000 each. That would be $200 billion right there. (I am being generous here.)

So the net cost of cars in the USA per year is roughly $13.58 (carbon dioxide) + $160 (gasoline) + $200 (cars themselves) = $373.58 (all in billions). I find it interesting how money-wise, the carbon effects are a small percentage of the cost of the cars. Using the European carbon price, gas should have a $0.17/gal tax to pay for its negative environmental (carbon) effects.

That being said, the health-care costs attributed to obesity are around $140 billion/yr.

Now, let's talk infrastructure. If an additional 1% (my old 10% figure was shot down as WAY unrealistic) of miles traveled by car can be replaced by bike, and we get a 1% reduction in obesity, the money saved would be $5 billion/yr. The 1% obesity reduction does not have to come from the obese, paradoxically in that improved health in others that cause an equivalent cost reduction works too. With an assumption of a very high cost of $500,000/mi for cycling/walking infrastructure improvements and maintenance (complete the streets $$$), we can have 10,000 mi worth of infrastructure. Divide that among the 100 largest cities in the country, and we'll have 100 mi worth per town per year, which is very good.

Of course, there soon would reach a point where every place is built out and saturated, at which point we go into a strictly maintenance mode which costs much less. And it's not realistic to expect a crash infrastructure building boom, at least without causing massive economic disruption.

I'm assuming that bikes and extra food don't cost anything, which of course isn't true. But I would say that the costs of bikes are around 1% of that of a car, so it's probably negligible in this analysis. Next time opponents complain about the high costs of infrastructure, maybe pointing to an analysis similar to this one would show how it's not really so high.
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Old 02-14-10, 12:43 PM   #2
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At last years National Bike Summit the speaker from Denmark noted that they observe a 1:1 ratio of money spent on bike projects to reduced health care costs.
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Old 02-14-10, 02:46 PM   #3
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I believe the overall average is closer 21mpg than 25mpg

You also need to factor in the cost of accidents that kill and maim. I doubt cycling would be nearly as deadly nor as expensive to society. The best number I can find are ~40,000 deaths a year, 2.9 million injuries and a cost to society of around $169 billion usd. The number of fatalities and the number of accidents have been dropping, but I suspect the dollar figure is not due to inflation.

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Old 02-14-10, 03:18 PM   #4
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You should account for parking. I've heard estimates around 200 billion USD per year for opportunity cost and maintenance of parking lots.

I think you also ought to count green space requirements against cars too. Cities seem to be forcing builders to insert green spaces and space buildings out even more than the parking requires. This is more opportunity cost for land, more miles driven, more roads, and less ability to walk.

Then you've got to count the roads. Sure, bikes need roads. We don't need as many (that should be counted in the parking) as wide and I highly doubt we put on the wear but you'd probably have to ash the Dutch what bike path maintenance is like compared to road maintenance: I don't know that the US has any bike paths that would qualify as busy year round.


If you're counting fuel against the cars make sure you do so for the bikes too. I'd subtract out the calories that contribute to obesity (well, maybe half of them -- let's be realistic).
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Old 02-15-10, 01:12 PM   #5
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Even 1% is too optimistic. A better number would be 0.5%.

Forget the C02 arguments.
A- it's a red herring and will deflect from discussion on cycling
B- it's bad science as assumed CO2 is heating globe. See todays news from a leading scientist who was arguing for GW not saying the data is bad. The temps are changed by primarily 1- local changes from open environment to city environment and reflecting back heat from buildings, 2- local changes from now being near new heat sources, and 3- local changes from change in measuring equipment.
C- it's bad science that CO2 is bad. 2nd grade biology: humans need O2 and plants need CO2. Humans emit CO2, plants emit O2. A perfect symbotic relationship. Talk to anyone who deals with a small closed system, like an aquarium with plants and fish. They wil pump in MORE CO2 to improve the health of the tank.

It would be interesting to add to the cost/benefit mix cheap changes, ala
1- new roads include adequate width
2- repaved roads include more width
3- any work on electric traffic controls include cyclist's retrofits just as they have to include handicapped access retrofits
4- any roadwork more than 1 mi, including repaving, has upgraded signage about appropriate cycling on that segment.

That being said, I don't see how infrastructure improvements alone will improve cycling. Bad infrastructure is a dissatisfier, but even super duper infrastructure may not encourage many to join cycling hordes. There has to be more than infrastructure.
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Old 02-15-10, 02:17 PM   #6
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A reduction in the obesity rates does not automatically result in lower health care expenditures. People of a healthy weight might have lower per year health care costs, but because they live longer, their lifetime health care costs might be higher. Reducing obesity rates replaces treatments for heart disease and diabetes with treatments for cancer, joint replacement and other conditions associated with growing old a decade later.
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Old 02-15-10, 02:29 PM   #7
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Originally Posted by Zizka View Post
A reduction in the obesity rates does not automatically result in lower health care expenditures. People of a healthy weight might have lower per year health care costs, but because they live longer, their lifetime health care costs might be higher. Reducing obesity rates replaces treatments for heart disease and diabetes with treatments for cancer, joint replacement and other conditions associated with growing old a decade later.
that's an excellent point I think may be often overlooked.
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Old 02-15-10, 02:57 PM   #8
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At last years National Bike Summit the speaker from Denmark noted that they observe a 1:1 ratio of money spent on bike projects to reduced health care costs.
according to this source that uses information from Denmark, for every $1 invested in cycling infrastructure, the government saves $5 in other government services.

Last edited by closetbiker; 02-15-10 at 04:02 PM.
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Old 02-19-10, 03:15 PM   #9
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The effects from a reduction in obesity should ultimately lead to a reduction in costs, in spite of people living longer for two reasons. (1) Healthier, longer lived people tend to have lower total costs since they tend to be healthy til the end, and (2) they are more productive in life, so there is additional productivity to offset whatever additional costs their longevity entails.

As for my assertion (1), I believe it's borne out by the insurance industry, which routinely charge higher premiums to the obese.
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