Webinar recording: Cost benefit analysis of bicycles versus cars

On 23 September 2021, the Policy Learning Platform hosted the fifth webinar of the cycling cities webinar series, focused on cost benefit analysis of bicycles versus cars. 

Many cities and towns across Europe face difficulties in implementing clean and sustainable transport systems due limited financial resources. Nevertheless, local policy makers still have the responsibility to balance the benefits of alternative transport options against each other and take sound decisions in the interest of their communities by making the best possible use of public money. This can happen only if the decision-taking process is informed by a comparison of cost-benefit analysis (CBA) of possible alternatives, such as building a new cycling path as opposed to expanding an existing parking lot.

Around 100 participants attended this webinar to learn about direct and indirect costs associated with car and bicycle use as well as the negative and positive externalities of each transport mode. They also had the possibility to discover how certain methodologies for carrying our CBAs have been developed or implemented at the local level to inform decision-taking in favour of the bicycle. You can watch the recording below as well as access the presentations. 

Webinar recording

Webinar agenda overview

Navigate to the discussion topics of interest in the webinar agenda overview below. 

Moderation and concept by: Katharina Krell, Thematic Expert of low-carbon economy and Marco Citelli, Thematic Expert of environment and resource efficiency.

00:01:29 Introduction by Katharina Krell, Thematic Expert of Low-carbon economy to the topic and the Policy Learning Platform services. 

00:07:01 Keynote speech by Marie Kåstrup, Head of the Bicycle Program at the City of Copenhagen.

00:19:59 Q&A: How can we internalise the external costs and benefits of different transport modes to a higher degree?

00:21:59 Q&A: You mention that 2% of transport funding is dedicated to cycling in Denmark, is it really that low?  Is this a big change from past investment levels?

00:24:50 Q&A: Cycling needs more lobbying, what would you suggest to influence policymakers? 

00:27:43 Q&A: You mentioned some of the differences you noticed in the case study of the Netherlands vs Denmark, did you notice other patterns or differences? And you mentioned that sick leave could also be decreased, do you know about any programmes? 

00:31:36 Q&A: Do you have an estimate of all funding for cycling nationally as opposed to just state funding?

00:34:00 Keynote speech by Michael Meschik, Professor at the University of Natural Resources and Life Sciences Vienna, Institute of Transport Studies.

00:48:15 Q&A: The pandemic has further highlighted that public space is valuable and scarce asset that needs to be distributed in a more balanced way across modes. How could the spatial dimension be better considered in the cost-benefit analysis?

00:50:24 Q&A: Did you take into account the system level (e.g. space requirement of a tram should also include the unavoidable empty journeys of tramcars to and from depots)? 

00:52:39 Q&A: What advice would you give regions, cities, towns who have yet to undergo an assessment like you undertook in Vienna?  Where do we start?

00:58:04 Q&A: Should car-makers be 'punished' before the end-consumers?

Panel discussion

01:01:18 Q&A: Do you know other examples for the use of cost-benefit analysis for cycling in Europe and what could be the role of the EU and EU regional policy in promoting it?

01:15:13 Q&A: How did cost-benefit analysis influence the decision-making process in your respective cities? 

01:29:02 Wrap up and conclusions

Key Learnings

From this webinar, we can highlight some major insights for local and regional policymakers and urban mobility experts:

• Bicycles are less 'visible' than cars. Unlike the latter, they do not contribute to climate change, air pollution, noise and traffic congestions. They are also less involved in road accidents and their use is great for people’s health. But how to measure the economic and social effects of car versus bicycle use?
• To this end the city of Copenhagen commissioned a study that developed a methodology to evaluate the economic costs and benefits of cycle projects. This was key to assessing cycling on equal terms with other modes of transport and improving the foundation of any decisions concerning which transport infrastructure investment to prioritise.
• Such a methodology for economic CBAs of cycle initiatives in the form of unit prices was applied ex post to two projects, the ‘Bryggebroen’, a cycling and pedestrian bridge built in the Copenhagen inner harbour, and the ‘Gyldenløvsgade’ intersection, a road crossing that was redeveloped to solve conflicts among users and improve conditions for cyclists.
• CBAs revealed that both investments had a positive internal rate of return and generated safety and time saving benefits. The 550% growth recorded in the use of the cycling bridge between 2006 and 2019 (from 3,400 to 22,100 cyclists per day) can only corroborate the CBA findings.
• Cycling should also be valued by employers. Evidence gathered in 2018 by the Danish Industry Association indicates that a 10% increase of cycled kilometers in the Copenhagen Capital Region corresponded, among others, to 227,000 fewer annual sick days, public sector savings of EUR 3.8 million, congestion savings of EUR 25 million and a total cost-benefit health gain of EUR 63 million.  
• Measuring the external costs of all road transport modes is fundamental to understand the extent to which the user-pays and the polluter-pays principles are actually implemented and to design better policies to ensure greater compliance with these principles in cities and regions.
• In 2011 the BOKU University of Natural Resources and Life Sciences compared 2009 bicycle- and car-traffic levels in Vienna for calculating the internal and external costs of both as well as their overall effect on the economy per km cycled or driven by car.
• The analysis revealed that per km travelled, external costs (CO₂ emissions, noise, air pollution, accidents, health costs, infrastructure wear & tear, etc.) generated by car drivers were higher (-0,04 EUR) than those of cyclists, which actually amounted to a surplus (+0,81 EUR).
• Recent publications like the 2019 Handbook of the external costs of transport suggests that the external costs associated with private car usage would be even greater, i.e. three times those calculated in Vienna over a decade ago.
• Evidence of this kind indicates that rethinking car-dominated road transport based on cost-effectiveness considerations is all the more necessary. Transporting people and goods to and from urban destinations can be efficiently done in a way that minimizes costs, efforts and the appropriation of public spaces by resorting to bicycle instead of cars.
• Can towns and cities with limited budgets embark on CBAs to gauge cycling vs. car-centred projects and better assess their positive and negative externalities? The answer is yes! While no standardized methodology exist at EU level, local and regional authorities can refer to WHO guidance to quantify the gains and setbacks in terms of public health that would result from different policy choices.
• In particular, the Health Economic Assessment Tool (HEAT) developed by the WHO Regional Office for Europe can be easily used to carry out economic assessments of the health impacts of walking or cycling.
• Quantified public health gains are the most evident factor that should inform policymaking in favour of cycling. People with a good physical and mental health status thanks to regular cycling weight less on regional and national healthcare systems than people with a sedentary lifestyle. Evidence shows however that the benefits of cycling go beyond that. This active transport mode has also a great job creation potential and can improve the economic performance of various sectors.
• Among others, cycling and walking have a better effect on sales in the commercial sector than trips by car. Evidence from Copenhagen indicates that purchases by clients arriving by bike or on foot account for almost 50% of shops turnover (29% and 20%, respectively), while drivers account for 36% and public transport users for 15%.
• To make sure that a meaningful shift away from private car usage occurs, local and regional policymakers may reflect on the adoption of a wide array of complementary measures. These range from putting a price on the external costs of air pollution and CO₂ emissions from cars, by introducing taxes to this end, to supporting active transport modes, by introducing 30 km/h speed limits, setting up ultra-low emission zones, investing on cycling infrastructures and public transport.

Photo credits: Design for innovation.