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Transport Economics (Road Pricing): Who Pays?





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Table of Contents

What It Really Cost To Drive

The Real Cost of Transport

Sustainable Living Rebate

Costing the Benefits: The Value of Cycling

What It Really Cost To Drive

While bicyclists are often accused of being freeloaders, what is touted as the conventional wisdom on transport economics may not be true. A short readable report, 'The Going Rate: What It Really Costs To Drive' by the World Resources Institute concludes that motorized travel in the U.S. is heavily subsidized and that bicyclists do pay their way. In fact a large portion of the costs of driving cars are borne by the entire population, not directly paid by people who drive and not paid in proportion to how much they drive. The report finds that it is entirely possible that a committed bicyclist actually subsidizes motorized travel. Consider the following facts:

  • Gas taxes and other user fees covered only 60 percent of the US$33.3 billion governments spent on building, improving and repairing roads in 1989. The rest of the money came from taxpayers (property taxes -- also indirectly paid by renters through their rent) and other non-user sources.
  • An estimated US$68 billion not covered by user fees is spent each year on such services as highway patrols, traffic management, parking enforcement, traffic accident response teams, police work on auto accidents and thefts, and routine street maintenance.
  • The costs of vehicular air pollution are hard to pin down because they include such elusive damages as illness, premature death, and reduced crop yield; but even at the low estimate of US$10 billion a year, they are substantial -- and all of them are borne by society at large.
  • Since motorists use about half of the U.S.'s imported oil, up to half the cost of maintaining a U.S. military presence in the middle east -- or US$50 billion a year -- could be considered part of the cost of driving -- not paid for by user fees.

This summarizes only part of the highly convincing report. Copies can be ordered from the WRI Publications, 2200 Girard Ave., Baltimore, MD 21211, USA. (US$12.95)

The Real Cost of Transport

Todd Litman has published a 225 page, fully referenced, report which provides a framework for incorporating external costs into transport planning, and explores issues such as the economic efficiency, social equity and land use impacts of current transport pricing. The report summarizes current theory and practices of measuring roadway transport costs, including user, government, environmental and social costs. Twenty costs are defined and discussed, and existing estimates are summarized. "Best Guess" cost values are proposed for eleven travel modes in dollars per vehicle mile, under urban peak, urban off-peak, and rural travel conditions. Several case studies are used and recommendations are provided for reforming current transport decision making. It also discusses the issue of latent demand and generated traffic. Todd describes the failure to consider these as "a major failure of current transportation decision making." For a copy send US$25 or Cdn$34 to: Todd Litman, Victoria Transport Policy Institute, 1250 Rudlin St., Victoria BC V8V 3R7 CANADA. Tel/Fax: 250-360-1560. Email:[email protected]. Internet:

Sustainable Living Rebate

As we try to level the playing field between SOV's and alternative travel one tool that has been suggested is the "Sustainable Living Rebates". In most places property, sales and other general taxes are used to build, maintain or regulated the transport system. Those whose lifestyle has little impact on transport system congestion deserve a rebate. Criteria might be: proof of ten months of residency; an average of less than 1 motor vehicle registered at an address per adult; and one of the following, proof of full-time home-office employment with an average of less than two days per week of business related motor vehicle use, an affidavit of an average of at least three days per week of alternative mode commuting (i.e. bicycling, walking, van-pooling, carpooling), or purchase of monthly transit passes.

Costing the Benefits: The Value of Cycling

Detailed review of the health, environmental and economic costs and benefits associated with cycling in the UK, includes methodology, recommendations and references. Price: รพ10. CTC, 69 Meadrow, Godalming, Surrey GU7 3HS, ENGLAND. Tel: 44-483-417 217.

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