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43 amend the rules of the organization to account for displaced Strategies that require large outlays of capital and/or emissions (3). APTA's methodology, which focuses on increases in operating costs. Strategies that expand reporting to The Climate Registry, should advance standard transit service are often among the most expen- procedures for calculating displaced emissions. sive because of large capital and operating costs. Expanding the coverage of fixed-route services can require millions or even billions of dollars per mile. COST ANALYSES Purchasing new vehicles is also costly. Even oper- ating existing vehicles for longer hours increases The cost of strategies that reduce GHG emissions is a key operating costs for fuel and wages; very few transit factor for agencies deciding which strategies to pursue. Tran- services can pay these costs using fares alone. Both sit agencies are heavily constrained by their annual budgets. route expansions and increases in service frequency Strategies that can reduce emissions at relatively low cost or can cost upwards of several thousand dollars per ton can even save money are of particular interest. Cost analyses of GHGs reduced. compare the fiscal impact of various strategies and aid in decision making. Various factors determine the cost-effectiveness of spe- cific strategies: Two general types of cost analysis applied to transit are cost-effectiveness and cost-benefit analysis (CBA). Cost- Strategies that increase vehicle passenger loads can be effectiveness measures the impact of a strategy on GHG relatively inexpensive, because they make use of exist- emissions in dollars per ton reduced ($/ton). A highly cost- ing transit capacity. Marketing campaigns and minor effective strategy has a low $/ton value; for example, a strat- improvements to vehicles, stops, and stations may be egy that costs $50/ton can reduce twice the GHG emissions relatively inexpensive. for the same dollar amount as a strategy that costs $100/ton. Strategies that promote compact development may Cost-effectiveness for some strategies also can be expressed require additional staff effort in planning and devel- as $/VMT reduced. Although analyses of cost-effectiveness opment functions, but typically do not require major typically consider only monetary cost and emissions impact, capital outlays by transit agencies. cost-benefit analyses tend to be much broader. CBA compares Use of alternative fuels may save money if the alterna- multiple impacts of strategies by converting each impact to tive fuel of choice is locally available at a lower price terms of dollars, and in doing so can account for other envi- than conventional fuels. For example, King County ronmental impacts of transit, such as reduced emissions of Metro has seen the cost-effectiveness of biodiesel fluc- criteria pollutants, and societal impacts such as time saved tuate between more than $100/ton and less than $0/ton and improved safety. CBA is more appropriate for evaluating (cost savings) as fuel prices have changed. However, transit strategies across multiple objectives, whereas cost- if new alternative fuel vehicles must be purchased at effectiveness is a simpler and more common framework for higher cost than conventional vehicles, the net cost of evaluating just the impact of strategies on GHG emissions, such strategies will be higher. Currently, a hybrid bus relative to cost. costs roughly $500,000 and trolley buses cost around $850,000, whereas a conventional diesel bus costs Although existing research on cost-effectiveness of strat- about $350,000 (56 ). egies provides few general conclusions, a few strategies The net cost of many strategies that reduce fuel con- stand out for their fiscal impacts: sumption in existing vehicles depends on the cost of new training programs, maintenance programs, and technol- Strategies that generally save money for agencies and ogy upgrades, as well as on the amount of fuel saved. also reduce GHG emissions. Strategies that reduce the use of electricity and fuel through either operational Cost-effectiveness of individual strategies can vary changes or relatively inexpensive upgrades to facilities widely. For example, BRT systems in Los Angeles, Califor- and equipment typically save money in the long term. nia, and Vancouver, British Columbia, are estimated to cost Switching to high-efficiency lighting is one example. $117 per ton and $3,238 per ton, respectively (57). Vanpool New lighting fixtures typically pay for themselves in services for agricultural workers in Kings County, California, energy savings within a relatively short period. Using cover their own operating costs with fares and save 413 tons recycled materials in construction also can save money of CO2 emissions per month. In addition, the Kings County for agencies. For example, TriMet saved millions of dol- Area Public Transportation Agency estimates that the service lars by using recycled materials in the construction of a produces indirect cost savings, such as savings for riders and new light-rail line (see Strategies to Reduce Emissions businesses in the area, of $59 million per year (30). from Construction and Maintenance in chapter four). These strategies produce cost savings for each ton of To analyze the cost-effectiveness of a strategy, agencies emissions reduced. must calculate both the cost and the emissions impact of the

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44 strategy. The most desirable transit strategy for cost-effec- While New York's study used a price of $149/ton, any tiveness reduces the most emissions for the least money. An price assigned to GHG emissions currently is largely specu- expensive strategy may be cost-effective in terms of $/ton lative. Estimated prices may be based on the costs of emis- if it reduces a large volume of emissions. Depending on the sion reduction strategies, economic forecasts, or results from purpose of the analysis, agencies may wish to consider only fledgling emissions markets. One agency surveyed, New internal costs and savings to the agency, or may consider Jersey Transit, has conducted cost analyses assuming that costs borne by and savings accrued to other stakeholders and the cost per ton of GHG will fall in the range of $4 to $50 the public as well. between now and 2020. These analyses will become part of the state's climate action plan. Assigning a cost to GHG emissions allows GHG impacts to be included in a CBA of strategies, in which all impacts Although more than a quarter of all agencies surveyed of a given strategy are monetized. A CBA analysis includ- reported that they have estimated or are estimating the cost- ing GHG emissions was conducted for conventional diesel, effectiveness of strategies in terms of $/VMT or $/ton, very hybrid diesel-electric, and CNG buses used by the New York few transit agencies have yet to undertake a comprehensive City Transportation Authority. For each bus technology, the analysis of cost-effectiveness for a range of GHG reduction analysis included capital expenditures, operations and main- strategies. BART is one of the first. In a recently released study, tenance expenditures, and environmental impacts, as well as BART compared the cost-effectiveness of measures that are several smaller categories of costs and benefits. The study fully within the control of BART (including those related to used a value of $149/ton of GHG. The analysis was conducted fares, access, and service) with measures that require coordi- during the period of operation of alternative bus types, when nation with other regional partners for broader land use and empirical data were available to inform the calculation. Eval- transportation changes (including transportation pricing and uating all cost components of a strategy is generally more land use policies). BART's analysis assessed only public sec- difficult before the strategy is implemented (58). tor costs, and not costs to individuals or businesses. FIGURE 19 Cost-effectiveness of BART strategies (Source : Nelson\Nygaard Consulting Associates, BART Actions to Reduce Greenhouse Gas Emissions: A Cost-Effectiveness Analysis, San Francisco Bay Area Rapid Transit District, San Francisco, Calif., Nov. 2008, p. 2).

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45 A summary of results from the study is provided in Figure There has not yet been a cost-effectiveness analysis of 19. The study found that the least cost-effective strategies for many transit strategies over a variety of contexts, which BART are those requiring significant new capital or opera- could provide some generalizable conclusions across transit tions spending, such as new parking facilities, increased ser- agencies. A forthcoming study from the Urban Land Insti- vice frequency, and system extensions. More cost-effective tute, Moving Cooler, will include national-level estimates strategies include fare incentives, marketing, and feeder of GHG cost-effectiveness for some broad types of transit shuttle service. The study found TOD strategies on BART strategies, as well as many other transportation GHG reduc- property to be net generators of revenue for BART, and also tion strategies. to have high potential to reduce GHG emissions (59). Analy- ses were based on empirical results from actual strategies Ideally, transit agencies would conduct their own cost- tested or implemented by BART and other transit agencies. effectiveness analyses of GHG reduction strategies. But little guidance is available for agencies desiring to conduct cost- SFMTA also compared the costs of some strategies that effectiveness evaluations. TCRP Report 93 does include a reduce GHG emissions in its recently published Climate suggested methodology to compare the cost-effectiveness Action Plan; however, the plan does not provide information of various alternative vehicle technologies to reduce GHG on the cost-effectiveness of strategies, in $/ton. emissions (6 ). In general, estimating the cost-effectiveness of technology-based strategies, for which the scope of cost Washington State explored methods to assess the cost-ef- and cost savings is largely limited to the transit agency and fectiveness of a proposed transit expansion (see Effectiveness from which there are few co-benefits, is simpler than estimat- of Transit Strategies in chapter four), although no methodol- ing cost-effectiveness for strategies with broader impacts on ogy was sanctioned for inclusion in the Climate Action Plan. transportation systems. Agencies can adapt cost-effective- Cost elements considered included increases in agencies' ness methodologies intended for other air pollutants to esti- operating, capital maintenance, and capital expansion costs. mate $/ton of GHG. Pinellas Suncoast Transit Authority in Cost savings included a reduction in the variable costs of St. Petersburg, Florida, is planning to adapt methodologies owning and operating a vehicle (for transit users), reduction prepared by the California Air Resources Board (CARB) for in congestion costs (for the traveling public), reduction in cost-effectiveness evaluation of criteria pollutants. (CARB's parking costs (for transit users), and reductions in vehicle guidance documents are available at crashes and air pollution costs (for the public). planning/tsaq/mvrfp/mvrfp.htm.) Agencies interested in conducting cost-effectiveness evaluations should see the Although agencies may find cost analyses conducted by Victoria Transportation Policy Institute's Evaluating Public other organizations informative, they should take care when Transit Benefits and Costs: Best Practices Guidebook (2008) applying findings to their own circumstances. Both costs for more background on types and amounts of cost and cost and GHG impacts of strategies can vary substantially based savings (60 ). on the specific design and context of strategies. In addition, different analytical scopes and methodologies can produce Agencies should also keep in mind that GHG cost-effec- widely varying results. The results of cost-effectiveness esti- tiveness is a limited metric for evaluation of strategies. Tran- mates depend heavily on the assumptions used, including sit service provides many co-benefits--including reducing factors such as energy prices, scale and aggressiveness of congestion, reducing emissions of criteria air pollutants, strategies, and the types of costs considered. Cost analyses and providing access to jobs and schools for disadvantaged can account for costs to transit agencies, other government communities--that are not accounted for in terms of $/ton of agencies, transit users, businesses, the public, or any sub- GHG reduced. Transit provides a relatively high level of co- set of these groups. Some strategies may appear relatively benefits when compared with other types of transportation cost-effective to reduce a few tons of GHG emissions, but GHG reduction strategies. Therefore, $/ton analyses across become less cost-effective as they are scaled up. Comparison different modes tend to disadvantage transit. A full CBA is of cost-effectiveness across different strategies and applica- more complicated, but it is better able to account for multiple tion of cost-effectiveness results from one context to another types of benefits. require particular caution.