Via @ccoletta & @thejoelepstein on Twitter: CEOs for Cities reports New York City’s $19B “Green Dividend”
When does a bike lane become an economic stimulus? When it’s part of an alternative transportation system that puts $19 billion into New York City’s economy each year.
Because New Yorkers drive substantially less than the average American, they realize a staggering $19 billion in savings each year — money that their counterparts in other large U.S. metro areas spend on auto-related expenses. This is the principal finding of New York City’s Green Dividend, a report by CEOs for Cities for the New York City Department of Transportation released on Earth Day 2010.
It’s a big number, and a great story. If only it held together better. As I read it, some 8.3 million New Yorkers drive an average of 9 miles per day, well below the national average of about 25 miles per day. Extend that 16 mpd savings over 365 days, at 40c/mile (probably low, but the figure used in the report), and you get $19.38 billion in savings. Excellent.
But that’s the gross saving. “About 75 percent of households report using transit on at least a weekly basis.” There’s a cost for that, and for the taxis that provide one of the key options to driving. (Walking is another, but that’s not tallied.)
The basic story — big savings from not needing to own or drive a car — still holds, and has multiple benefits:
New Yorkers who spend less on transportation have more money to spend in sectors of the economy that have much larger local multiplier effects. According to Internal Revenue Service data, about 73 percent of the retail price of gas (back when it was under $2.00 a gallon, by the way) and 86 percent of the retail price of cars is the “cost of goods sold,” which immediately leaves the local economy. The $19 billion New Yorkers save on car travel translate into more than $16 billion that are available to be spent in the local economy. Because this money tends to be re-spent in other sectors of the economy, it stimulates local businesses.
(And then there’s the beneficial impact on balance of payments, due to avoided oil imports, 23 million tons of carbon emissions avoided annually, and more. Including having some coin for more expensive housing. 😉
So is this a good thing? Absolutely. And brilliant to frame it as economic stimulus. But if we truly want to transform the global economy in our lifetimes — which is the task, kids, nothing less — even good guys gotta do the math. And know the difference between gross and net.