Transportation & Land Use

Energy 101: Does investment in biking and walking get us our money’s worth?

bike laneInvestment in the infrastructure needed for so-called “active transportation” (in other words, walking and biking) isn’t a huge fraction of government spending. If we’re talking slices of pie, bike/walk spending would be, at most, a crumb of crust.

Here’s how it breaks down: transportation spending makes up less than 2 percent of the federal budget, and biking and walking projects make up less than two percent of that two percent. This is despite the fact that walking and biking account for an estimated 11.9 percent of all trips in the United States and make up 13.6 percent of road fatalities.

Percent of road fatalities that are pedestrians and bicyclists Percent of total trips made by walking and biking Percent of federal transportation funding for walking and biking
13.6 percent (in 2008) 11.9 percent (in 2009) 1-2 percent percent (2000-2009)

Source: The National Bicycling and Walking Study 2010

Bike/walk “mode share” (the percentage of trips taken by bike or foot) has been gaining on automotive mode share for over a decade. Here in Minnesota the trend is especially dramatic: the number of people walking or biking to work increased by nearly 30 percent from 2001 to 2009, largely spurred by more investments to support safe walking and biking.

But never mind the voters. Government should be run like a business, right? In this view, governments should only fund projects that have a positive return on investment (or ROI). What are the benefits of investing in active transportation?

Start with avoided gasoline costs. Currently, walking and biking save 1.4 billion gallons of gas per year. A study showed that a modest increase in pedestrian and bike mode share would save the United States 3.8 billion gallons of gas per year.

Multiply that by the price at the pump, and then multiply it again by the lifespan of new infrastructure, and you’re starting to talk real savings. Throw in all of the external costs of gasoline use (trade deficit, national security implications, air pollution, carbon emissions) and this is a huge deal.

We can also quantify some of the health benefits of bike/walk investments. Regular exercise, like walking, can significantly reduce individual health-care costs, bringing down insurance rates for everyone. For example, residents of Portland, Oregon currently save over $10 million a year in avoided health-care costs thanks to that city’s smart investments in bike/walk infrastructure. Combined with fuel savings, the net benefit of this investment is set to grow to $1.2 billion by 2040—an ROI of over $8 for each dollar invested.

And what about jobs? Minnesota Business estimates that the Twin Cities bicycle industry adds $315 million to the local economy. The state’s growing bicycle sector now includes jobs in manufacturing bike parts and bike racks, local transportation of messages, coffee beans, local food, and Twins fans, and jobs tied to bike-related events.

And those are just the benefits that are easiest to quantify. Bike/walk investments also

  • reduce traffic injuries and fatalities, which helps reduce the cost of emergency and first-responder services (Mn/DOT estimates that a traffic fatality costs nearly $1.3 million and a traffic injury costs an average of nearly $35,000),
  • attract tourism (Minnesota’s trails tourism industry generates about $2.2 billion annually related to walking and biking and supports about 24,000 jobs around the state),
  • increase worker productivity (due to improved health), which increases economic output and benefits employers,
  • reduce air pollution, which improves everyone’s health and quality of life, further lowering health care costs,
  • allows more children to bike and walk to school, which reduces the costs of school district busing,
  • reduces wear and tear on roadways, which improves road quality (less potholes) and lowers maintenance costs,
  • reduces traffic congestion, which enables drivers to spend less time in traffic or looking for a parking space,
  • increases general mobility and street level activity, which benefits businesses, improves property values, and helps reduce crime,
  • reduces day-to-day dependency on cars, which helps insulates our communities and local economies from gas price spikes,
  • reduces global warming emissions, which reduces the costs of climate change to governments, businesses, and individuals, and
  • make our communities more attractive places to live and visit (a survey from the National Association of Realtors found that 58 percent of Americans think a walkable neighborhood is an important consideration), which attracts people, businesses, and tourism.

Added up, it’s reasonable to estimate that these stacking benefits outweigh bike/walk infrastructure costs by at least an order of magnitude.

Moreover, these benefits are widely dispersed. They accrue not only to individuals who walk and bike, but also to drivers, urban commuters, and rural school children. And they lower costs for taxpayers, insurance payers, businesses, and employers.

In other words, investing in biking and walking does help us tighten our belts—both metaphorically and literally.

What's the ROI on more pedal and foot power? You might be surprised at how fast it adds up.

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