Potential Changes in Emissions
Due to Improvements in Travel
Efficiency -
Supplemental Report:
Analysis of Potential Co-Benefits
SEPA
United States
Environmental Protection
Agency
Office of Transportation and Air Quality
EPA-420-R-11-014
September 2011
-------
Potential Changes in Emissions
Due to Improvements in Travel
Efficiency -
Supplemental Report:
Analysis of Potential Co-Benefits
Transportation and Climate Division
Office of Transportation and Air Quality
U.S. Environmental Protection Agency
Prepared for EPA by
ICF International
EPA Contract No. EP-C-06-094
Work Assignment No. 4-09
&EPA
United States
Environmental Protection
Agency
EPA-420-R-11-014
September 2011
-------
TABLE OF CONTENTS
1. INTRODUCTION 1
2. BACKGROUND/CONSIDERATION OF EXISTING RESEARCH 4
3. ANALYSIS METHODOLOGY 5
3.1. Benefit/Social Cost Measures Identified for Quantification 5
3.2. Resources for Data and Assumptions 7
3.3. Methodology for Calculating Co-Benefits 9
4. RESULTS AND CONCLUSION 11
4.1. Results from Analysis of Co-benefits 11
4.2. Indirect Benefits 13
4.3. Conclusion 13
REFERENCES 14
APPENDIX 16
LIST OF TABLES
Table 1. Summary of Co-Benefits from Implementing Scenarios 2
Table 2. Proposed TEAM Methodology for Measures Quantifiable in TRIMMS 6
Table 3. Assumptions Used in the Analysis of Co-Benefits 9
Table 4. Estimated Values for Fuel Prices and Fuel Economy Used in the Analysis, 2010-2050 9
Table 5. Co-Benefits Resulting from Reduction in Vehicle Miles Traveled (discounted @ 3%) 12
Table A-1. Methodology Used to Estimate Co-Benefits in TRIMMS 16
Table A-2. Co-Benefits Resulting from Reduction in Vehicle Miles Traveled (discounted @ 7%) 17
LIST OF FIGURES
Figure 1. Annual Vehicle Operating Cost Savings Resulting from Implementing Scenarios, 2010-2050,
compared to Business-as-Usual scenario 3
-------
IV
-------
*| '• , «, -I- - -.-:, ,*.{ . . ,--, -I- *', -.-:, ,.f
The EPA report, Potential Changes in Emissions Due to Improvements in Travel Efficiency -
Final Report, analyzed the impacts of combinations of travel demand management, land use,
transit, and road pricing strategies on trip making, vehicle miles traveled (VMT), and vehicle
emissions using the Travel Efficiency Assessment Method (TEAM).1 The analysis
demonstrated potential reductions in vehicle trips and trip lengths, shifting of trips from peak to
off-peak periods, and travelers' shift from single occupancy vehicles to transit, ridesharing, and
non-motorized modes. The analysis was done for urban areas; hence, the reductions in VMT
and emissions represent those occurring from changes in urban travel activity. Data collected
for the previous study was obtained from urban areas and the strategies analyzed are also most
applicable in urban areas facing issues such as peak period congestion and associated air
pollution and greenhouse gas emissions. Rural areas are not expected to be affected by these
strategies.
A primary benefit of the changes in travel activity occurring from the analyzed strategies is a
reduction in emissions due to reduced travel and reduced congestion, but there are several
other ancillary benefits. In this supplemental report, these ancillary benefits are referred to as
co-benefits because they are additional to the emissions benefits resulting from the
implementation of the travel efficiency strategies or combinations of strategies (referred to as
scenarios) described in the EPA report.
The co-benefits from implementation of these scenarios include a reduction in health impacts
associated with air pollution, reduced traffic congestion, reduced user costs for operating
vehicles, improved energy security through reduced energy costs and dependency on oil
imports, and reduction in vehicle crashes and accidents. When co-benefits are accounted for,
transportation strategies aimed at reducing emissions show additional positive impacts.
Therefore, it is important to carefully consider co-benefits in terms of their present value when
evaluating strategies or scenarios for implementation.
This supplemental report focuses on the potential co-benefits resulting from the seven scenarios
analyzed in the EPA report. Although there are several potential co-benefits, the national level
results for potential reductions in VMT and emissions from the previous analysis were used to
quantify two key co-benefits that are straightforward to quantify. As with the VMT and
emissions reduction, the annual co-benefits were quantified for each decade from 2010 out to
2050 for each scenario and discounted to their value in 2010 dollars. The White House Office of
Management and Budget (OMB) provides guidance on discount rates to assume,
recommending the use of 3% and 7%. The guidance states that when regulation primarily and
directly affects private consumption (e.g., through higher consumer prices for goods and
services) rather than the allocation of capital, the lower discount rate of 3 percent is appropriate.
The calculations are therefore, shown using a 3 percent discount rate. Nevertheless, following
OMB's overall guidance, the Appendix of this report (Table A-2) also includes co-benefits
calculated at the higher discount rate of 7%. The co-benefits estimated in this report are:
1) Vehicle operating cost savings - If vehicle owners make fewer trips and drive shorter
distances, their vehicle maintenance and operation costs can be reduced. In total, the
seven scenarios analyzed in the EPA report are expected to result in light duty vehicle
1 U.S. Environmental Protection Agency (EPA). (2011). Potential Changes in Emissions Due to
Improvements in Travel Efficiency - Final Report. EPA-420-R-11-003. March. Available at:
http://www.epa.gov/oms/stateresources/policy/420r11003.pdf
-------
operating cost savings ranging from about $8.5 million to over $282 million in 2050 in
2010 dollars, using a 3% discount rate.2
Savings in fuel costs - Less fuel consumed means travelers pay less at the pump. This
is a component of vehicle operating cost savings but is calculated separately because it
is of particular interest. Not only is it the component of operating costs that is typically
most directly observed by travelers, but there is often a lot of uncertainty surrounding
fuel costs in future years. This depends on a multitude of economic and political factors
out of the scope of this discussion. The seven scenarios are expected to result in fuel
cost savings for light duty vehicles ranging from $1.4 to $48 million in 2050 (2010
dollars, using 3% discount rate).
2) Gallons of fuel saved - Strategies aimed at reducing transportation emissions are also
likely to reduce fuel consumption, both from reduced VMT and from vehicles spending
less time in congested conditions (which leads to excess fuel consumption due to idling).
The seven scenarios are expected to result in fuel savings ranging from about 0.85 to 28
million gallons in 2050.
The summary results from the analysis of co-benefits for each scenario in 2030 and 2050 are
shown in Table 1. The baseline year for the previous analysis is 2010 and therefore, all co-
benefit values in this report are presented in 2010 dollars. The annual co-benefits of vehicle
fuel and operating cost savings were estimated for each future year and then discounted at the
rate of three percent to derive the net present value. Figure 1 shows the annual vehicle
operating cost savings resulting in each decade from implementation of each of the seven
scenarios, as compared to a business-as-usual baseline.
The analysis uses data widely available from public databases and literature and is based on
standard assumptions followed in cost-benefit analysis studies and existing research on the
analysis of co-benefits. The following sections of the report describe the data, assumptions,
methodologies, and results for the analysis of co-benefits based on the outputs of the TEAM
approach used to estimate travel activity and emission reductions in the previous EPA report,
Potential Changes in Emissions Due to Improvements in Travel Efficiency - Final Report.
2 White House Office of Management and Budget's Circular A-4 provides guidance on discount rates (pp
31-35), recommending the use of 3% and 7%; available at:
http://www.whitehouse.gov/sites/default/files/omb/assets/regulatory matters pdf7a-4.pdf
-------
Table 1. Summary of Co-Benefits from Implementing Scenarios
Scenario
1- Region-wide TDM
2 - TDM + land use changes
3 - TDM + land use changes +
transit fare reduction
4 - TDM + land use changes +
transit fare reduction + transit
service improvements
5 - TDM + land use changes +
transit fare reduction + transit
service improvements + parking
fees
6 - TDM + land use changes +
transit fare reduction + transit
service improvements + mileage
fees
7 - TDM + land use changes +
transit fare reduction + transit
service improvements + parking
fees + mileage fees
Co-Benefits
2030
Vehicle operating
cost savings
($ millions)*
$2.84
$29.38
$40.63
$42.25
$84.86
$56.65
$99.36
Fuel savings
(million gallons)
0.27
2.79
3.86
4.02
8.06
5.38
9.44
2050
Vehicle operating
cost savings
($ millions)*
$8.43
$94.75
$133.72
$139.23
$222.37
$202.57
$281.80
Fuel savings
(million gallons)
0.85
9.51
13.42
13.97
22.31
20.32
28.28
*AII values in 2010 dollars
Figure 1. Annual Vehicle Operating Cost Savings Resulting from Implementing Scenarios, 2010-2050, compared to
Business-as-Usual scenario
Scenario 7
Scenario 5
Scenario 6
Scenario 4
Scenario 3
Scenario 2
Scenario 1
2010
2020
2030
2040
2050
-------
2. , i< J* i ui" 11 "J i M' in HI !'*
The study began with a review of current national research on the co-benefits resulting from a
wide range of strategies aimed at reducing transportation emissions. The literature review
considered several major reports: Multi-pollutant Emissions Benefits of Transportation
Strategies (FHWA 2006), Growing Cooler (Ewing et al. 2008), Moving Cooler: An Analysis of
Transportation Strategies for Reducing Greenhouse Gas Emissions (Cambridge Systematics
2009), and NCHRP Report 462 Quantifying Air Quality and Other Benefits and Costs of
Transportation Control Measures (2001).
The literature review identified a range of benefits3 or cost savings estimated as part of studies
focusing on measures to reduce vehicle miles traveled (VMT) and/or emissions. Costs and
benefits can be experienced either by travelers themselves or can be imposed by travelers on
the rest of society. The latter are considered social costs/benefits, or externalities, because
they are external to the traveler's experience and are typically ignored by travelers when making
travel decisions. The benefits or cost savings most commonly estimated are listed below as well
as whether they perceived by the individual traveler or by society:
* Change in travel costs (time and out-of-pocket costs): traveler cost/benefit
• Change in fuel consumption costs: traveler cost/benefit
a Change in accident and crash costs: traveler and social cost/benefit
* Change in costs of congestion delays caused to others: social cost/benefit
* Change in health costs related to air pollution: social cost/benefit
• Change in costs of damages related to global climate change: social cost/benefit
a Change in noise costs: social cost/benefit
Other benefits that are not typically considered because they are either not applicable in all
cases or are difficult to quantify are the costs of land (e.g., for parking), economic costs/benefits
associated with changes in travel demand (e.g., change in property values, which results in
higher property tax revenue for jurisdictions), and the economic costs of fuel consumption and
imports (e.g., fuel cost subsidies to keep prices low and costs of maintaining the Strategic
Petroleum Reserve to cushion the economy in case of interruptions in fuel supply). A qualitative
discussion of some of these measures is included later in this report. EPA's final rule on Light
Duty Vehicle GHG Emissions Standards includes quantitative estimates of energy security
benefits from fuel savings that the reader can refer to for further analysis.4 Lifecycle costs and
benefits associated with the production and distribution of vehicles and fuels are typically not
considered in transportation demand analyses.
3 Savings in cost measures such as health costs or congestion costs are the same as benefits, i.e.
negative values for costs imply positive benefits of the same magnitude.
4 U.S. Environmental Protection Agency, 40 CFR Parts 85, 86, and 600; U.S. Department of
Transportation, National Highway Traffic Safety Administration, 49 CFR Parts 531, 533, 536, 537 and
538 [EPA-HQ-OAR-2009-0472; FRL-9134-6; NHTSA-2009-0059], "Light-Duty Vehicle Greenhouse
Gas Emission Standards and Corporate Average Fuel Economy Standards; Final Rule," published on
May 7, 2010, available at: http://edocket.access.gpo.gov/2010/pdf/2010-8159.pdf
-------
3
J, !•: .
This section describes the benefits identified for the analysis that could be quantified based on
the values of VMT and emissions reduction from each scenario estimated in the previous
analysis.5 The benefits for each decade from 2010 to 2050 are calculated and presented in
current (2010) dollars.
3.1. CO'-U: L3T
In the EPA report, the reductions in VMT were estimated using the TRIMMS (Trip Reduction
Impacts for Mobility Management Strategies) model.6 The analysis associated with the EPA
report used regional data as inputs to the TRIMMS model in order to test scenarios and
determine potential VMT reductions from each. In order to apply the results to a national-level
view, regional outcomes were applied to similar regions across the country and then aggregated
to illustrate national results.
Although TRIMMS can analyze co-benefits associated with calculated VMT and emissions
reductions in each region, these regional results from TRIMMS were not directly used for the
present national scale analysis. The TRIMMS model is designed for analysis at a project or
regional scale at the start of the analysis and the user must select a region from 85 regions
represented in TRIMMS. In calculating benefits and costs, the model uses region-specific data
on wage rates to determine values of time, data on average speeds to determine congestion
costs, and state-level data on fatality rates to calculate vehicle crash costs for each region.
TRIMMS also scales the costs to account for cost of living differentials between regions.
Although these underlying assumptions within TRIMMS make it inappropriate for the present
analysis, the methodology and data sources referenced provide some guidance for the
calculation of costs and benefits. This analysis relied on assumptions suited to a national
analysis, but users may follow the methodology described here with regional values for
assumptions such as fuel prices and auto operating costs.
Table 2 shows the full list of benefit/cost measures that can be estimated by the TRIMMS model
along with a brief description of each measure and the proposed methodology to support the
TEAM analysis. The methodology describes the calculations and data sources that may be
used to quantify each of the avoided costs, based on the VMT and emissions reductions already
calculated. While being guided by the methodology used in TRIMMS, this analysis used
updated cost values available from literature and various national databases to apply to the
national reductions in VMT and emissions previously calculated.7 The methodology used for
each measure in the TRIMMS model is shown in the Appendix.
Change in vehicle operating costs is the only direct user benefit in the list that accrues to
travelers themselves; all others are social benefits.
5 See EPA report, Potential Changes in Emissions Due to Improvements in Travel Efficiency - Final
Report, available at: http://www.epa.gov/oms/stateresources/policy/420r11003.pdf
6 At the time of publication, the newest version of TRIMMS was being prepared for release. The TRIMMS
model and related documentation (Center for Urban Transportation Research (CUTR) (2009) Quantifying
the Net Social Benefits of Vehicle Trip Reductions: Guidance for Customizing the TRIMMS© Model, prepared for
Florida DOT, Tampa, FL: CUTR at the University of South Florida) are available at: www.trimms.com
7 Note that while regional analyses using the TEAM approach could rely on TRIMMS, the TEAM approach
and the methodologies described here allow regions to use more up-to-date emissions, travel, and cost
data than is available in TRIMMS.
-------
Table 2. Proposed TEAM Methodology for Measures Quantifiable in TRIMMS
Measure
Description
Proposed TEAM Methodology
Savings in
Vehicle
Operating Costs
Costs of vehicle ownership,
operations, and maintenance
Auto operating cost savings from reduced VMT can be
calculated based on available values in $/mile for the
current year (2010 in this analysis).
Savings in Health
Damage Costs
Due to Air
Pollution
Costs of damage to human health,
visibility, materials, agriculture, and
forests from vehicle exhaust
emissions, including CO, VOCs,
and NOx
Emission factors from EPA's MOVES model can be
applied to the change in national VMT to calculate total
reduction in emissions for a range of pollutants.
Emissions damage costs in $/kg obtained from EPA
(2010) can be used to quantify benefits.8
Reduction in
Congestion
Delays
Costs associated with congestion
delay produced by motor vehicle
use, i.e., the added delay imposed
on all users when an additional
vehicle is introduced into the traffic
stream. These costs only pertain
to the costs of added delay to
others.
Marginal added hours of delay per thousands of
passenger-car equivalent (pee) VMT (assumed to be
61.26 hours of delay per 1,000 pee VMT in TRIMMS) x
change in VMT estimated x value of time ($/hour = 40%
of national average wage rate
Note: Can also be calculated using EPA's estimates of
external costs of congestion from EPA (2010).
Reduction in
Excess Fuel
Consumption
Costs of excess fuel consumed as
a result of added congestion
National average fuel economy data from EPA and
average fuel price available from the EIA can be used to
estimate the benefits from savings in fuel consumed
based on the calculated VMT reduction.
Reduction in
Impacts from
Global Climate
Change
Costs related to damages
associated with global climate
change
Emissions factors for C02, N20 and ChU from MOVES
can be applied to the change in national VMT.
Comprehensive GHG cost values in $/ton available
from EPA (2010) can be used to quantify benefits.
Reduction in
Costs Related to
Accident s and
Crashes
Costs associated with crashes,
such as property and personal
injury damages caused by
accidents
The change in comprehensive health and safety costs
is based on the change in the number of vehicle
crashes resulting from each scenario. This can be
calculated using NHTSA data on average national crash
rates by severity class per million VMT. NHTSA
guidance on cost factors for crashes in different severity
classes can be used to quantify benefits. Estimates for
external costs of accidents are also available from EPA
(2010).
Reduction in
Noise Pollution
Costs of damage imposed on
others through noise from engine
acceleration and vibration, from tire
contact on road surfaces, and from
brake and horn usage
Average noise costs for urban areas in $A/MT available
from EPA (2010) can be multiplied by total national
reduction in VMT to quantify benefits.
1 See EPA Rule "Light-Duty Vehicle Greenhouse Gas Emission Standards and Corporate Average Fuel
Economy Standards; Final Rule," published on May 7, 2010 (values available in Table II.F-2), available
at: http://edocket.access.gpo.gov/2010/pdf/2010-8159.pdf
-------
In this analysis, the following key co-benefits were estimated for each scenario:
1) Vehicle operating cost savings: A reduction in trip-making and VMT is likely to reduce
vehicle operating costs for ownership, operations, and maintenance, resulting in savings for
travelers. These costs encompass fuel costs, which were also separately calculated.
Savings in fuel costs: On average, about twenty percent of total auto operating costs are
attributable to fuel costs,9 therefore, a reduction in vehicle travel and VMT is likely to result
in fuel cost savings that are measured as a co-benefit. In projecting fuel costs in future
years, a greater or lower proportion of total costs may represent fuel. These cost savings
may be considered a component of the total savings in vehicle operating costs.
2) Gallons of fuel saved: Strategies aimed at reducing transportation emissions are also likely
to reduce fuel consumption resulting from vehicle operations overall and particularly when
vehicles are operated in congested conditions. These fuel savings are measured as a co-
benefit to society. The full range of benefits associated with reduced fuel consumption is not
quantified here, but some of the related indirect benefits are discussed qualitatively in the
results section. To quantify the energy security benefits related to fuel savings, the reader
may refer to EPA (2010) for estimates of the economic benefits from reducing oil imports.
The above two co-benefits were selected for analysis because they are straightforward to
calculate and because there is generally less uncertainty in estimating these co-benefits than
the others listed.
-'j- .-•• •• •- '
This section describes the resources that were used to analyze the above illustrative co-
benefits.
Vehicle operating and fuel costs. Three primary resources support the determination of
vehicle operating cost savings: (i) Standard Mileage Rate from the Internal Revenue Service
(IRS) set every year by the federal government and reflecting actual operating costs,10 (ii)
estimates of operating costs broken down by cost category from annual publication "Your
Driving Costs" published by the American Automobile Association (AAA) since 1950,11 and (iii)
growth rates in fuel prices based on projections in the U.S. Energy Information Administration
(EIA)'s Annual Energy Outlook (AEO) published annually.12
Either the IRS or AAA values may be used as the assumption of actual annual vehicle operating
costs. The advantage of the AAA resource is that the operating costs are broken down in detail
by cost category and ranges are provided for different types of vehicles (small, medium, and
large sedans, minivans and sport utility vehicles) along with average values. In addition, ranges
of costs are provided for different levels of mileage driven in a year (10,000 miles, 15,000 miles,
and 20,000 miles). This allows the user to identify particular cost categories they are interested
in for a detailed analysis. Similarly, for a regional analysis, the user may refer to the AAA
9 AAA (2010), "Your Driving Costs"; available at:
http://www.aaaexchange.com/Assets/Files/201048935480.Driving%20Costs%202010.pdf
10 IRS Standard Mileage Rate, 2010; http://www.irs.gov/newsroom/article/0,,id=216048,00.html
11 AAA (2010), "Your Driving Costs"; available at:
http://www.aaaexchange.com/Assets/Files/201048935480.Driving%20Costs%202010.pdf
AEO (2011) projections for motor fuel and diesel prices are available at:
http://www.eia.gov/forecasts/aeo/topic prices.cfm
-------
resource for national average values of ownership and maintenance costs, while substituting
actual fuel costs for their region.
The IRS mileage rate simply provides an average composite value that reflects the combined
fixed and variable costs of vehicle ownership, operation, maintenance, repair, depreciation, and
insurance. The most common use of this mileage rate is to reimburse employees for expenses
involving use of their own cars for business purposes. The reimbursement rate applies to the
broadly defined term "cars," which includes passenger vehicles, sports utility vehicles or SUVs,
vans, and pickup trucks. The rate is also provided separately for three categories: business
miles, medical/moving, and miles driven in the service of charitable organizations. The
business miles category is applicable in this analysis. The IRS revises the rate annually and
sometimes more than once per year if a particular component of the operating costs changes
significantly. In the year 2010, the IRS mileage rate was 50 cents per mile.
In this analysis, the IRS rate of 50 cents per mile in 2010 was selected since it is a widely used
value for vehicle operating costs. Prior to conducting this analysis, the AAA values were
compared with the IRS value. The costs reported by AAA in its 2010 publication range from
47.6 to 73.9 cents per mile depending on the vehicle type and annual mileage driven. The total
costs per mile for an average-sized sedan driven about 15,000 miles per year are estimated by
AAA to be 56.6 cents. Because the AAA rate is close to the IRS rate of 50 cents per mile, it
supports this reasonableness of the selected rate.
The AEO is primarily useful in projecting operating costs in future years as it provides fuel price
projections out to 2035. In this analysis, the 2009-2035 growth rate in fuel prices was used to
project fuel costs in 2040 and 2050.13 The non-fuel components of auto operating costs were
assumed to grow with inflation. The inflation rate for the period 2009-2035 was assumed to be
2.2. percent per year, based on the assumptions used in the AEO.
Fuel consumption. The analysis of fuel savings is based on data from the U.S. EPA on
average light duty vehicle fuel economy. Future year fuel savings are based on projections from
the AEO on how average light duty vehicle fuel economy is expected to grow. The annual
growth rate for vehicle fuel economy from the AEO projects improvements in fuel economy out
to 2035. Again, the growth rate from 2009 to 2035 was assumed to determine average fuel
economy in 2040 and 2050.
Table 3 shows the assumptions used in the analysis and Table 4 shows the estimated values
for fuel prices and fuel economy used for the analysis of co-benefits in future years.
13 AEO (2011) projections for motor fuel and diesel prices are available at:
http://www.eia.gov/forecasts/aeo/topic prices.cfm
-------
Table 3. Assumptions Used in the Analysis of Co-Benefits
Assumptions
Value
Unit
Source
Calculating change in vehicle operating and fuel costs
Auto operating costs including
ownership costs, 2011
Average annual inflation rate for
2001-2011
50.0
2.20%
cents/mile
per year
IRS Standard Mileage Rate, 2010
EIA, AEO 2011 Assumption
Calculating change in fuel consumption separately
Average light duty vehicle (LDV)
fuel economy in 2010
Average LDV fuel price in 2010
Growth rate in fuel economy
Growth rate in fuel price
22.4
$2.70
0.72%
1.80%
miles/gallon
per gallon
per year
per year
EPA, Light-Duty Automotive
Technology, Carbon Dioxide
Emissions, and Fuel Economy Trends:
1975 Through 2010
EIA, Average US gas price in 2010
EIA, AEO 2011 average fuel economy
growth rate for diesel and gasoline
light duty vehicles
EIA, AEO 2011 for motor fuel
Table 4. Estimated Values for Fuel Prices and Fuel Economy Used in the Analysis, 2010-2050
(in 2010 dollars)
Measure
Average fuel economy in miles per gallon
Average fuel price per gallon
Average fuel cost per mile
Average non-fuel costs (ownership, etc.) per mile
Total operating costs per mile
2010
22.40
$2.70
$0.12
$0.38
$0.50
2020
24.07
$3.23
$0.13
$0.47
$0.61
2030
25.86
$3.86
$0.15
$0.59
$0.74
2040
27.78
$4.61
$0.17
$0.73
$0.89
2050
29.85
$5.51
$0.18
$0.91
$1.09
3.3. Methodology for Calculating Co-Benefits
Based on the resources and assumptions described in the previous section, the illustrative co-
benefits were calculated using the following methodologies.
1) Vehicle operating cost savings:
In the analysis, light duty vehicle operating costs in 2010 were assumed to be 50 cents per
mile, based on the IRS rate.14 The VMT reduction for each scenario obtained from the
earlier TRIMMS analysis was multiplied by the total per-mile operating costs to estimate the
savings in vehicle operating costs resulting from each scenario. Vehicle operating costs
were assumed to grow in each year based on the expected growth in fuel prices in future
years and assuming that other costs (such as costs of ownership including licensing and
registration costs, depreciation, taxes, and insurance, as well as costs of tires and
maintenance) will increase with inflation. Using the cost components from AAA, fuel costs
represent roughly 20-25 percent of total auto operating costs, while insurance coverage,
14
IRS Standard Mileage Rate for 2010; http://www.irs.gov/newsroom/article/0,,id=216048,00.html
-------
licensing and registration taxes, depreciation, and finance charges cover the remaining 75-
80 percent. This analysis used the growth rate in fuel economy and expected growth rate in
fuel prices available from the U.S. Energy Information Administration (EIA)'s Annual Energy
Outlook (AEO) 2011.15 Total auto operating costs in future years were estimated using these
data and an average annual inflation rate of 2.2 percent for the non-fuel costs, based on
assumptions in the AEO.
Savings in fuel costs:
The baseline average gasoline price in the U.S. is assumed to be $2.70 in 2010 based on
data available from the Energy Information Administration (EIA).16 Prices for gasoline and
diesel are assumed to be the same to simplify the analysis.17 The AEO projects an average
annual growth rate of 1.8% in prices of both fuels for the period 2009-2035.18 This analysis
assumes the same growth rate out to 2050 to estimate fuel prices in miles per gallon for
each future decade. Savings in fuel cost were obtained by multiplying the fuel price by the
gallons of fuel saved calculated in the second co-benefit. These costs may be considered a
component of the total savings in vehicle operating costs calculated above.
2) Gallons of fuel saved
Data from the U.S. Environmental Protection Agency (EPA) show that the average light duty
vehicle fuel economy in the year 2010 was 22.4 miles per gallon.19 For the baseline year
(2010), the reduction in fuel consumption was calculated by dividing the reduction in VMT by
the fuel economy in that year. The 2011 AEO assumes that the fuel economy of light duty
vehicles will grow annually by 0.72% on average for diesel and gasoline-fueled vehicles.20
This growth rate was applied to estimate light duty vehicle fuel economy for all decades out
to 2050. As for the baseline year, gallons of fuel saved in all decades were calculated using
the reduction in VMT and fuel economy estimates.
15 U.S. EIA, Annual Energy Outlook (AEO) 2011, table titled "New Light-Duty Vehicle Fuel Economy,
Reference Case (miles per gallon)"
16 U.S. Energy Information Administration (EIA), Gasoline and Diesel Fuel update, 07/25/11; available at:
http://www.eia.gov/oog/info/gdu/gasdiesel.asp
17 The price of diesel is about 0.25 cents per gallon higher than gasoline; however, accounting for the
different prices of both fuels would require data on vehicle population fueled by each. This difference
between diesel and gasoline prices was ignored to simplify the analysis.
18 U.S. EIA, Annual Energy Outlook (AEO) 2011, table titled "Petroleum Product Prices in 2009 dollars
per gallon".
'U.S. EPA (2
Trends: 1975 Through 2010; available at: http://www.epa.gov/oms/fetrends.htmtfarchive
5 Averai
2011.
19 U.S. EPA (2010). Light-Duty Automotive Technology, Carbon Dioxide Emissions, and Fuel Economy
20 Average fuel economy growth rate for diesel and gasoline light duty vehicles is available from AEO,
10
-------
4,
4.1. Results from Analysis of Co-benefits
The intent of this supplemental report was to analyze and illustrate key co-benefits of
improvements in travel efficiency after the potential reductions in VMT and emissions have been
estimated using the TEAM approach. The analysis focused on estimating savings in vehicle
operating costs for travelers including savings in fuel costs, as well as savings in fuel
consumption resulting from the seven scenarios defined in the EPA report. These co-benefits
were analyzed for all decades from 2010 to 2050.
The key results are:
« In total, the seven scenarios are expected to result in annual light duty vehicle operating
cost savings ranging from about $8.4 million for the least aggressive scenario to $282
million for the most aggressive scenario in 2050 (in 2010 dollars), compared to the
business-as-usual scenario.
« In total, the seven scenarios are expected to result in annual fuel cost savings for light
duty vehicles ranging from $1.45 to $48.5 million in 2050 (in 2010 dollars), compared to
the business-as-usual scenario.
« Expected annual fuel savings for the seven scenarios range from 0.85 to 28 million
gallons in 2050, compared to the business-as-usual scenario.
Table 5 shows the results of this analysis in detail.
11
-------
Table 5. Co-Benefits Resulting from Reduction in Vehicle Miles Traveled (discounted @ 3%)
(in 2010 dollars)
1
2
3
4
5
6
7
Scenario
Baseline national urban VMT (business-as-usual),
in millions
Regionwide TDM
VMT Reduction from BALI baseline, in millions
Auto operating cost savings, in $millions
Savings in fuel costs only, in $millions
Gallons of fuel saved, in millions
Land use changes + TDM
VMT Reduction from BALI baseline, in millions
Auto operating cost savings, in $millions
Savings in fuel costs only, in $millions
Gallons of fuel saved, in millions
2010
5,118
0.00
$0.00
$0.00
0.00
0.00
$0.00
$0.00
0.00
Land use changes + Transit fare change + TDM
VMT Reduction from BALI baseline, in millions
Auto operating cost savings, in $millions
Savings in fuel costs only, in $millions
Gallons of fuel saved, in millions
0.00
$0.00
$0.00
0.00
2020
5,889
3.49
$1.57
$0.35
0.14
36.10
$16.27
$3.66
1.50
49.92
$22.49
$5.05
2.07
2030
7,130
6.98
$2.84
$0.59
0.27
72.20
$29.38
$6.05
2.79
99.84
$40.63
$8.37
3.86
Land use changes + Transit fare change + Transit service improvements + TDM
VMT Reduction from BALI baseline, in millions
Auto operating cost savings, in $millions
Savings in fuel costs only, in $millions
Gallons of fuel saved, in millions
0.00
$0.00
$0.00
0.00
51.91
$23.39
$5.26
2.16
103.81
$42.25
$8.70
4.02
2040
8,254
16.12
$5.94
$1.12
0.58
177.97
$65.55
$12.35
6.41
250.14
$92.13
$17.36
9.00
260.38
$95.90
$18.07
9.37
Land use changes + Transit fare change + Transit service improvements + Parking Fees + TDM
VMT Reduction from BALI baseline, in millions
Auto operating cost savings, in $millions
Savings in fuel costs only, in $millions
Gallons of fuel saved, in millions
0.00
$0.00
$0.00
0.00
104.26
$46.98
$10.56
4.33
208.52
$84.86
$17.48
8.06
437.22
$161.03
$30.34
15.74
Land use changes + Transit fare change + Transit service improvements + Mileage Fees + TDM
VMT Reduction from BALI baseline, in millions
Auto operating cost savings, in $millions
Savings in fuel costs only, in $millions
Gallons of fuel saved, in millions
0.00
$0.00
$0.00
0.00
69.60
$31.36
$7.05
2.89
139.19
$56.65
$11.67
5.38
372.90
$137.34
$25.88
13.42
2050
9,555
25.26
$8.43
$1.45
0.85
283.75
$94.75
$16.30
9.51
400.45
$133.72
$23.01
13.42
416.94
$139.23
$23.95
13.97
665.92
$222.37
$38.26
22.31
606.60
$202.57
$34.85
20.32
Land use changes + Transit fare change + Transit service improvements + Parking Fees + Mileage Fees + TDM
VMT Reduction from BALI baseline, in millions
Auto operating cost savings, in $millions
Savings in fuel costs only, in $millions
Gallons of fuel saved, in millions
0.00
$0.00
$0.00
0.00
122.07
$55.01
$12.36
5.07
244.15
$99.36
$20.47
9.44
544.01
$200.36
$37.75
19.58
843.88
$281.80
$48.48
28.28
12
-------
4.2. Indirect Benefits
The reduction of VMT and emissions from the analyzed travel efficiency strategies is likely to
have benefits beyond those listed in Tables 2 and 5. These may be termed as indirect benefits
because they are not directly related to the amount of travel reduced but could be indirectly
affected by implementation of the strategies. They are often not easily quantifiable since it is
difficult to attribute these benefits solely to the transportation strategies considered. Several
other external factors can have an influence, for instance, economic and political conditions
governing fuel trade.
Transit improvements constructed within a smart growth framework can lead to changes
in the use and value of properties located near transit or near new infill developments.
This increase in economic value is an indirect benefit of the transportation improvement.
Improvements in transit service and intelligent transportation solutions (ITS) strategies
could lead to greater reliability benefits for travelers, leading to enhanced productivity
and more time spent in desirable pursuits rather than waiting at transit stations or sitting
in congested traffic congestions. Tangible economic benefits can thus accrue from ITS
strategies that lead to improvements in traffic flow and reduction in delays.
Land use strategies like smart growth that involve compact development can increase
regional accessibility and reduce the need for new infrastructure to be built further out in
the region. These outcomes can lead to regional economic benefits from enhanced
accessibility to employment and reduced costs for infrastructure provision.
Shifting to non-motorized transportation modes like walking and cycling can lead to
additional health benefits associated with a physically active lifestyle and can reduce the
incidence of obesity, other illnesses, and the stress of being "stuck in traffic". The
savings in health costs arising from using these modes are difficult to estimate because
a traveler may choose to use these modes or not for other reasons, not directly related
to the adopted strategy.
Reducing fuel consumption by reducing VMT has the additional benefit to the U.S.
economy of lowering the economic costs that result from U.S. petroleum consumption
and imports. These external costs include subsidies on fuel prices, costs associated
with the disruption in the flow of oil imports, outlays to support U.S. military activities to
secure the flow of oil imports, and outlays to cushion the economy against possible
interruption in oil imports by maintaining the Strategic Petroleum Reserve.
4.3. Conclusion
The analysis of co-benefits is crucial to understanding the full impacts of strategies aimed at
reducing vehicle emissions and improving travel efficiency. It allows consideration of factors not
directly perceived by travelers but with important social and economic implications. Given that
transportation investment decisions frequently involve considerations beyond travel activity and
emissions, it is important to be able to account for these co-benefits. Knowledge of the co-
benefits allows transportation practitioners to evaluate projects and strategies in a more robust
way, leading to a better allocation of resources. This supplemental report provides quantitative
and qualitative information for evaluating key-co-benefits that can prove helpful in decision
making. The methodology used in this analysis may be applied to estimates of VMT reduction
from implementing transportation strategies obtained using the TEAM approach and other
methods.
13
-------
AAA (2010), "Your Driving Costs"; available at:
http://www.aaaexchange.com/Assets/Files/201048935480.Driving%20Costs%202010.pdf
Cambridge Systematics (2001), Quantifying Air Quality and Other Benefits and Costs of
Transportation Control Measures, NCHRP Report 462, Washington, DC: National Cooperative
Highway Research Program, TRB.
Cambridge Systematics (2009), Technical Appendices, Moving Cooler: An Analysis of
Transportation Strategies for Reducing Greenhouse Gas Emissions, prepared for Urban land
Institute, Washington, DC: Urban Land Institute.
Concas, Sisinnio and Philip L. Winters (2008), Estimating Societal Benefits and Costs of
Transportation Demand Management, paper presented at Transportation Research Board
Annual Conference, Washington, DC.
Concas, Sisinnio and Philip L. Winters (2009), Quantifying the Net Social Benefits of Vehicle
Trip Reductions: Guidance for Customizing the TRIMMS© Model, prepared for Florida DOT,
Tampa, FL: CUTR at the University of South Florida. Available at:
http://www.nctr.usf.edu/pdf/77805.pdf
Ewing, Reid, K. Bartholomew, S. Winkelman, J. Walters, and D. Chen (2008), Growing Cooler:
Evidence on Urban Development and Climate Change, prepared for Urban land Institute,
Washington, DC: Urban Land Institute.
Federal Highway Administration (FHWA) (2006), Multi-Pollutant Emissions Benefits of
Transportation Strategies, prepared by ICF International for FHWA, Washington, DC: Federal
Highway Administration. Available at:
http://www.fhwa.dot.gov/environment/conformity/mpe benefits/
IRS Standard Mileage Rate for 2010available at:
http://www.irs.gov/newsroom/article/0,,id=216048,00.html
U.S. Energy Information Administration (EIA), Gasoline and Diesel Fuel update, 07/25/11;
available at: http://www.eia.gov/oog/info/gdu/gasdiesel.asp
U.S. EIA, Annual Energy Outlook (AEO) 2011, table titled "New Light-Duty Vehicle Fuel
Economy, reference case (miles per gallon)"
U.S. EIA, Annual Energy Outlook (AEO) 2011, table titled "Petroleum Product Prices in 2009
dollars per gallon"
U.S. Environmental Protection Agency (EPA). (2011). Potential Changes in Emissions Due to
Improvements in Travel Efficiency - Final Report. EPA-420-R-11-003. March. Available at:
http://www.epa.gov/oms/stateresources/policy/420r11003.pdf
U.S. EPA (2010). Light-Duty Automotive Technology, Carbon Dioxide Emissions, and Fuel
Economy Trends: 1975 Through 2010; available at:
http://www.epa.gov/oms/fetrends.htmtfarchive
U.S. EPA, 40 CFR Parts 85, 86, and 600; U.S. Department of Transportation, National Highway
Traffic Safety Administration, 49 CFR Parts 531, 533, 536, 537 and 538 [EPA-HQ-OAR-2009-
14
-------
0472; FRL-9134-6; NHTSA-2009-0059], "Light-Duty Vehicle Greenhouse Gas Emission
Standards and Corporate Average Fuel Economy Standards; Final Rule," published on May 7,
2010, available at: http://edocket.access.gpo.gov/2010/pdf/2010-8159.pdf
White House Office of Management and Budget (2003). Circular A-4, "Regulatory Analysis,"
available at: http://www.whitehouse.gov/sites/default/files/omb/assets/regulatory matters pdf/a-
4.pdf
15
-------
Appendix
Information about the TRIMMS model
TRIMMS evaluates strategies that directly affect the cost of travel, like transit fare subsidies,
parking pricing, pay-as-you-go pricing initiatives and other financial incentives. TRIMMS also
evaluates the impact of strategies affecting access and travel times. The model allows the user
to account for employer-based program support strategies, such as flexible working hours,
teleworking, and guaranteed ride home programs. It allows the analyst to use local data or
defaults from national research findings. The VMT impacts of a given mix of strategies are
subsequently calculated.
TRIMMS is a sketch planning tool that can be used to analyze many types of strategies at a
regional or sub-area scale. However, strategies involving construction of new infrastructure
such as new HOV/HOT lanes, new transit lines, and new bicycle/pedestrian facilities, can be
analyzed most effectively using a regional travel demand model. In the TRIMMS model, such
strategies can be modeled using the change in travel times and travel costs that such strategies
represent. The TRIMMS model does not use trip tables. It requires average regional mode
shares, average trip lengths and travel time by mode, average vehicle occupancy, parking
costs, and trip costs as inputs. The user can change the price and travel time elasticity values.
The tool provides changes in mode shares, trips, and VMT as outputs.
Table A-1. Methodology Used to Estimate Co-Benefits in TRIMMS
Measure
Change in Air Pollution
Change in Congestion
Change in Excess Fuel
Consumption
Change in Impacts from
Global Climate Change
Change in Health and
Safety
Change in Noise
Pollution
TRIMMS Methodology
Use of emission factors from EPA MOBILES model for 85 geographic regions
represented in TRIMMS. Emissions damage costs in $/kg obtained from Delucchi
(2005), inflated to 2009 dollars, and scaled for different urban areas, based on regional
cost of living differences and population densities.
Marginal added hours of delay per thousands of passenger-car equivalent (pee) VIvTT
(assumed to be 61 .26 hours of delay per 1 ,000 pee VMT) x change in VMT estimated
by TRIMMS x value of time ($/hour = 40% of average wage rate by occupation type,
scaled to account for cost of living differences between regions).
Only pertains to the costs of added delay to others.
Uses data on average travel speeds for 85 urban areas from the Texas Transportation
Institute's Urban Mobility Report to determine average fuel economy, and data on fuel
prices in each urban area from the EIA.
Uses value of $50/metric ton of C02 emissions from literature x (change in VMT) x
C02 emissions factor from MOBILE6.
Considers damages associated with C02 only, following EPA guidance that other
GHGs (N20 and CH4) are more volatile and difficult to estimate.
Change in comprehensive health and safety costs is based on changes in the number
of vehicle crashes resulting from each scenario.
Changes in noise are calculated based on VMT ($/VMT) by mode type for urban areas.
The costs are scaled to account for cost of living differentials between national
averages and each regional area. Cost figures taken from Litman (2009).
16
-------
Table A-2. Co-Benefits Resulting from Reduction in Vehicle Miles Traveled (discounted @ 7%)
(in 2010 dollars)
1
2
3
4
5
6
7
Scenario
Baseline national urban VMT (business-as-usual),
in millions
Regionwide TDM
VMT Reduction from BAU baseline, in millions
Auto operating cost savings, in $millions
Savings in fuel costs only, in $millions
Gallons of fuel saved, in millions
Land use changes + TDM
VMT Reduction from BAU baseline, in millions
Auto operating cost savings, in $millions
Savings in fuel costs only, in $millions
Gallons of fuel saved, in millions
2010
5,118
0.00
$0.00
$0.00
0.00
0.00
$0.00
$0.00
0.00
Land use changes + Transit fare change + TDM
VMT Reduction from BAU baseline, in millions
Auto operating cost savings, in $millions
Savings in fuel costs only, in $millions
Gallons of fuel saved, in millions
0.00
$0.00
$0.00
0.00
2020
5,889
3.49
$1.07
$0.24
0.14
36.10
$11.11
$2.50
1.50
49.92
$15.37
$3.45
2.07
2030
7,130
6.98
$1.33
$0.27
0.27
72.20
$13.71
$2.82
2.79
99.84
$18.96
$3.91
3.86
Land use changes + Transit fare change + Transit service improvements + TDM
VMT Reduction from BAU baseline, in millions
Auto operating cost savings, in $millions
Savings in fuel costs only, in $millions
Gallons of fuel saved, in millions
0.00
$0.00
$0.00
0.00
51.91
$15.98
$3.59
2.16
103.81
$19.72
$4.06
4.02
2040
8,254
16.12
$1.89
$0.36
0.58
177.97
$20.90
$3.94
6.41
250.14
$29.38
$5.54
9.00
260.38
$30.58
$5.76
9.37
Land use changes + Transit fare change + Transit service improvements + Parking Fees + TDM
VMT Reduction from BAU baseline, in millions
Auto operating cost savings, in $millions
Savings in fuel costs only, in $millions
Gallons of fuel saved, in millions
0.00
$0.00
$0.00
0.00
104.26
$32.10
$7.21
4.33
208.52
$39.61
$8.16
8.06
437.22
$51.35
$9.67
15.74
Land use changes + Transit fare change + Transit service improvements + Mileage Fees + TDM
VMT Reduction from BAU baseline, in millions
Auto operating cost savings, in $millions
Savings in fuel costs only, in $millions
Gallons of fuel saved, in millions
0.00
$0.00
$0.00
0.00
69.60
$21.43
$4.81
2.89
139.19
$26.44
$5.45
5.38
372.90
$43.79
$8.25
13.42
2050
9,555
25.26
$1.84
$0.32
0.85
283.75
$20.64
$3.55
9.51
400.45
$29.13
$5.01
13.42
416.94
$30.33
$5.22
13.97
665.92
$48.44
$8.33
22.31
606.60
$44.13
$7.59
20.32
Land use changes + Transit fare change + Transit service improvements + Parking Fees + Mileage Fees + TDM
VMT Reduction from BAU baseline, in millions
Auto operating cost savings, in $millions
Savings in fuel costs only, in $millions
Gallons of fuel saved, in millions
0.00
$0.00
$0.00
0.00
122.07
$37.58
$8.45
5.07
244.15
$46.38
$9.55
9.44
544.01
$63.89
$12.04
19.58
843.88
$61.39
$10.56
28.28
17
------- |