[sustran] Smart Transportation Economic Stimulation - New VTPI Report

[Todd Alexander Litman]

"Smart Transportation Economic Stimulation: Infrastructure 
Investments That Support Strategic Planning Objectives Provide True 
Economic Development"
(www.vtpi.org/econ_stim.pdf )

Summary
This timely new report discusses factors to consider when evaluating 
transportation economic stimulation strategies. Transportation 
investments can have large long-term economic, social and 
environmental impacts. Expanding urban highways tends to stimulate 
motor vehicle travel and sprawl, exacerbating future transport 
problems and threatening future economic productivity. Improving 
alternative modes (walking and cycling conditions, and public transit 
service quality) tends to reduce total motor vehicle traffic and 
associated costs, providing additional long-term economic savings and 
benefits. Increasing transport system efficiency tends to create far 
more jobs than those created directly by infrastructure investments. 
Domestic automobile industry subsidies are ineffective at stimulating 
employment or economic development. Public policies intended to 
support domestic automobile sales could be economically harmful in 
the long-term.


Conclusions
Many types of public investments can stimulate short-term employment 
and economic activity but some are better overall because they also 
support other strategic goals. Smart economic stimulation responds to 
future demands and helps achieve various economic, social and 
environmental objectives. This study indicates that highway 
rehabilitation and safety programs are economically beneficial, but 
urban highway expansion tends to stimulate more driving and sprawl, 
exacerbating transportation problems. Demographic and economic trends 
reduce highway expansion benefits and increase demand for high 
quality alternatives. Investments that improve alternative modes tend 
to provide greater total benefits.

Increasing transport system efficiency is particularly important for 
long-term economic development. Vehicle and fuel purchases generate 
fewer domestic jobs and less economic activity than most other 
consumer expenditures. Each million dollar shifted from purchasing 
fuel to a typical bundle of consumer goods adds 4.5 U.S. jobs, and 
this is likely to increase significantly in the long run as 
international oil prices rise and domestic production declines. Each 
million shifted from general motor vehicle expenditures (purchase of 
vehicles, servicing, insurance, etc.) adds about 3.6 U.S. jobs. 
Public transit operations create a particularly large number of jobs.

A reasonable scenario of aggressive fuel economy targets, investments 
in alternative modes and supportive land use policies can reduce U.S. 
fuel consumption 20-40%, saving future consumers $150-350 billion 
annually in fuel and vehicle expenses, providing economic benefits 
from reduced fuel import costs of similar magnitude, producing 
additional economic, social and environmental benefits, and 
generating 1 to 2 million additional annual domestic jobs. This 
equals the total (not annual) jobs created by $30 to $60 billion of 
infrastructure expenditures and is five to ten times greater than the 
jobs provided by domestic vehicle manufactures.


Sincerely,
Todd Alexander Litman
Victoria Transport Policy Institute (www.vtpi.org)
litman at vtpi.org
Phone & Fax 250-360-1560
1250 Rudlin Street, Victoria, BC, V8V 3R7, CANADA
"Efficiency - Equity - Clarity"
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